YouTube to Buy a Stake in the Music Label-Owned Vevo
Google is making another investment in content creators
YouTube's relationship with Vevo has always been tense, but it has always been a money maker as well. Music videos are, by far, the most popular type of videos on YouTube and the money labels make from Vevo is not insignificant, as their other revenues shrink.So, while the labels would like nothing more than for Google to simply disappear and maybe take the internet with it, they will be taking Google's money.
An investment deal between Google and Vevo's owners is in the works and is very close to closing, All Things D reports, but it may still falter.
Vevo, the music video site, is owned by record labels, Universal and Sony, along with Abu Dhabi Media who put up most of the money when the site was first created.
YouTube has been providing the infrastructure and, more importantly, the exposure. While Vevo operates as an independent site, available in a few countries, the videos it hosts are also available on YouTube and it's there that they get the vast majority of their views and make the most money.
Vevo has been threatening to partner with other providers, Facebook was put forward, but it knows it can't leave YouTube, not without giving up a huge chunk of cash.
Google on the other hand, via YouTube at least, has been more interested in investing in content creators. It's already invested in Machinima, the biggest channel on the site, so the new investment isn't such a big change. It will be worth significantly more though.
For all the companies competing in the online music space, it's YouTube that is doing the best while trying the least. The site really is poorly designed for listening to music, yet millions listen to the same songs over and over again until they get billions of views.
Most of those listens come from the younger audience, but these kids will grow up and when they do they won't be listening to music on Spotify, they'll still be doing it on YouTube. The same goes for pretty much every other video content.