VEVO is one of the few smart moves the major record labels have done in the last decade. The video site, created in partnership with YouTube, is now the second biggest video site in the US, where it is available. It recently launched in the UK too.
At the same time, the VEVO YouTube channel is the most popular on Google's video site. But that might change as VEVO is apparently working on a deal with Facebook to host and stream the videos, leaving YouTube and Google out of the loop.
If such a deal would go through, YouTube would definitely feel the hit, music videos are by far the most popular videos on the site and, more importantly, they're also some of the most profitable.
What's more, Facebook would take the crown as the second biggest video site in the US. Not only that, it would keep more people on the site as well, ensuring bigger ad revenues.
It's a very appealing deal for Facebook, it would make more money, keep people more engaged and also give them less reasons to go anywhere else on the web. Most kids today listen to music on YouTube/VEVO almost exclusively. What's more, it would be hurting Google as well, always a plus for Facebook.
But there are a few hurdles to overtake. For one, the current contract between YouTube and VEVO still has one year to go. Under the current deal, YouTube provides the infrastructure and in return gets access to all the music videos from the three music labels that are part of VEVO, everyone except Warner Music Group which has a separate deal with YouTube.
The record labels get their own site to showcase their music and split the ad revenue from both VEVO.com and the VEVO YouTube channel with YouTube. It's unclear whether Facebook will be able to offer the same revenue, even if it agrees to better terms than YouTube.