Website counts Universal Music, Sony Corp and Abu Dhabi Media Co among its investors
Vevo, the online music-video website co-owned by record labels and powered by Google’s YouTube, will begin service in the UK in the next month or two, before starting in the Middle East and North Africa, Chief Executive Officer Rio Caraeff said.
The advertising-supported site, which has 1.7 billion worldwide streams a month, counts Vivendi SA’s Universal Music, Sony Corp, EMI Group Ltd and the Abu Dhabi Media Co among its investors. About 70 percent of traffic comes directly from YouTube, Caraeff said in an interview at the Abu Dhabi Media Summit Thursday.
Separately, Vivendi CEO Jean-Bernard Levy said Vevo would start in the UK “in the next few weeks.”
Vevo aims to have as many as 200 million video viewers worldwide by the end of 2011, with at least 60 million in the US, Caraeff said. While the music industry grapples with declining digital sales of music and rampant piracy, Vevo makes money from premium ads placed around videos and other content on the site by marketers such as McDonald’s, Unilever and AT&T.
“We’ve had to recondition the marketplace by showing that our content and audience is valuable,” he said. “It’s not the same as posting tooth whitening and liposuction ads.”
Vevo is one of the top five sites in the US with the highest penetration of users between the ages of the lucrative 18- to 34-year-old demographic. Other sites in that category are YouTube and Facebook, Caraeff said.
“If you don’t have that kind of scale you’re not interesting to advertisers, or the audience,” he said.
Other key advertisers on Vevo include American Express, and Procter & Gamble, he said. Ad rates for Vevo online are about $25 per 1,000 impressions, while on mobile platforms such as the iPad and smartphones it’s in excess of $45 per 1,000.
The company expects to double revenue this year, Caraeff said, declining to give figures.
Vevo will probably become profitable in the next 18 to 24 months, he said. To do that the company will expand geographically and offer more live performances, featuring product placements, and original content on its site.
The programming includes famous film directors such as Terry Gilliam pairing up with the rock band Arcade Fire and a plan for David Lynch to join with Duran Duran to direct concerts.
“Vevo was the first industry company that only focused on what’s best for the fan and not how to protect the incumbent business model. The industry has to figure out to develop multiple revenue models that will see it getting paid by people who want unlimited access to music.”