Google’s YouTube has made a new deal with Vevo, the music video enterprise which is owned by two of the world’s largest music labels. Through this deal, YouTube will be able to sell Vevo’s clips directly to its advertisers. Of course, YouTube would be taking a cut of the revenue and give the rest to Vevo. Earlier, Vevo’s own sales force had first ownership of this.
Music labels Sony Music Entertainment, Universal Music Group, and Warner Music Group own Vevo. It was founded to benefit from the extreme popularity of YouTube music videos due to artists like Taylor Swift, Justin Bieber, and Katy Perry.
This deal between YouTube and Vevo is part of a licensing agreement between both the parties which took place last year. However, it was not announced until now. Last week during YouTube’s “Brandcast” pitch to advertisers, YouTube talked about it when the company told its advertisers that they were selling Vevo clips as part of their “Google Preferred” tier, in which YouTube places it’s most valuable and most “brand-safe” content.
“This gives you the unprecedented opportunity to advertise against virtually all music in the world,” said YouTube’s chief business officer, Robert Kyncl.
With this move, Google’s team of 15,000 sellers will be able to access the valuable inventory which should be able to generate higher ad sales for the music videos. And now, since YouTube and Vevo are dividing the revenue generated from the ad sales of music videos, it wouldn’t matter who makes the sale.
Also, labels will now be able to interact directly with YouTube. However, from a user point of view, this deal might not prove to be beneficial, as you will be able to see brand ads instead of promos from other videos which you might be looking forward to viewing between videos.
Vevo declined to comment on this news. However, after Recode broke the story, YouTube’s chief business officer Robert Kyncl told the site, “The availability of Vevo in Google Preferred [the search giant’s premium ad service] enables UMG, Sony, and Vevo to participate in YouTube’s most premium inventory sold to advertisers. It also increases the sales force deployed against music videos and maximizes revenue for artists and songwriters.”