14 DAY TRIAL // Vevo is a strange beast, part YouTube, part major record label-owned site. Given that YouTube/Google and the creative industry haven't exactly seen eye to eye on too many occasions, the partnership is peculiar.
But it's partnership of convenience and nothing more, the labels needed YouTube's infrastructure and audience, YouTube needed the music.
And, so far, it's been paying off, at least for the labels and the musicians. The site is said to have paid out $100 million, €76.6 million in royalties so far, since its launch in 2009, just two years ago.
The revenue comes only from the ads that run next to the music videos. While it may not seem like a huge chunk of money, especially spread over two years, that's $100 million more than the labels ever made from their videos which have always been given away for free as promotional tools.
That said, much like YouTube, Vevo is still not profitable. But the revenue numbers are growing and the site expects to start earning money sometime next year.
The problem, that YouTube is facing as well, is that hosting and streaming online video is expensive and that advertising, to date, doesn't pay for it. YouTube has been working on this problem for years and is getting better at extracting ad revenue from its videos. But the company still isn't revealing whether it is profitable.
In this respect, Vevo has advantages and disadvantages. On the one hand, since all of the content on the site comes from the record labels, or at the very least is from a trusted source, all videos get ads next to them.
On the other hand, many people go to Vevo and YouTube, put a music video on repeat and go on doing other things. Since they're not watching the page, they're not clicking on any ads either.