Monetizing music videos

Once upon a time music videos were the gateway to stardom.  Michael Jackson and Madonna were the frontrunners whose careers were defined by their videos.  Something changed over the past few years as reality TV shows took over and music TV stations reduced the number of videos played.  Also, the viewing habits of youth began to move online.  In the culture of “freemium,”  Youtube videos were seen as promotional but not revenue generating.  At the same time, Youtube videos had replaced music buying altogether for some users.  This has left many artists wondering about their livelihood.

Over the last year, VEVO has been making its mark and changing things in such a way that music videos on Youtube can now be monetized. VEVO is a joint venture between Sony Music Entertainment, Universal Music Group, and Abu Dhabi Media, with EMI licensing its content to the group without taking an ownership stake.  The service was launched officially on December 8, 2009 .  The videos on VEVO are syndicated across the web,  with Google and VEVO sharing the advertising revenue.

Julie Lee, Executive Vice President, Business Development & Business Affairs at VEVO attended CMW to talk about their platform.   When explaining their role in music video broadcasting, she used the analogy that Youtube is like the cable company, while VEVO is the channel.  Their partnership with Youtube allows them to meet consumers where they’re at, rather than trying to change their consumption habits.  The volume of streaming video through VEVO is tremendous with 2.2. billion views per month worldwide and 750 million/month in the US.  Monetizing these views has defined the strategy and success of VEVO.

VEVO currently works with 350 advertisers and depending on the video, sponsorship can cost up to 3 million US dollars for 5 days.  Half of the money made goes to the licensor.  Ads are played approximately every 6 1/2 minutes.  As a side-note, an interesting theory was presented, that 250,000 youtube plays equals 1 radio play on a pop station.

What does this mean for independent artists?  There are some fears in the blogosphere that if large numbers of viewers migrate to the VEVO platform, they might only see signed artists.  Others argue that most people will likely stay with Youtube.   As VEVO continues to develop tailored viewing experiences through their platform and iphone/ipad/android apps, it will be interesting to see how consumer habits evolve.  VEVO has also launched a program to support and highlight emerging artists called, Lift.  (click here to read more about it).  Alternatively, artists have the option of partnering directly with Youtube through the “Musicians Wanted” program (click here for more information).

Having watched several teens and tweens consume music solely via Youtube, it is comforting to know that this consumption can now result in renumeration for artists.  Hopefully this is just the beginning of reclaiming the value of music for creators.


One thought on “Monetizing music videos

  1. “Having watched several teens and tweens consume music solely via Youtube, it is comforting to know that this consumption can now result in renumeration for artists.”

    Will it?

    Most major label deals treat music videos as promotional. Artists are CHARGED for video production against their royalties. Perhaps a small amount will come to artist/writers/publishers through licensing and performance royalties, but the labels will take the lion’s share of any ad revenue. I guarantee that.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s