Pali Capital’s Rich Greenfield opened the paidContent 2010 conference at the TimesCenter with a note of skepticism about the recent spate of media joint ventures, such as Hulu or the recently-launched YouTube music video channel Vevo. Moderator Quincy Smith, ex-CBS Interactive (NYSE: CBS) exec now partner, Code Advisers, put the question to Rio Caraeff, president & CEO, of Vevo, who said, simply: “If we focus on what the fan wants, instead of the retailer, which has been the traditional focus of the music industry, we’ll be successful.”
– Canoe Venture’s David Verklin characterized the impetus of creating a JV as an attempt to satisfy the need for something “nimble, aggressive, adaptive,” while having the support of an existing infrastructure. Verkin: “The world is littered with failed JVs. We named our company Canoe because the only way you can get the six major cable companies to work together on a coast-to-coast venture is to get into the same boat. You don’t need 100 percent unanimity, but you do want to get to the same destination.”
– Time Inc. (NYSE: TWX) EVP John Squires, now Managing Director, of mag industry JV Next Issue Media, suggested that having a strong board that is able to provide clear direction from the outset is also a key to making sure a JV works.
– Caraeff: Vevo started with Universal, but the need to have critical mass demanded that other companies sign on as well. Just like Hulu wouldn’t have worked if it just featured one network. You don’t need everyone, but you need more than one entity to attract advertisers and viewers… We embrace ubiquity for the fan, as well as scarcity for the advertiser.
– Squires: Who else would he like on Next Issue’s roster? “The New York Times.”
– Verklin: Summing up the JV ethos, he said, “If you want to go fast, go alone. If you want to go far, go with a group.”
– Verklin: Getting the engineering and technology established is a major project and it will take time. We’ve tried to keep a low profile as we grind through the technological processes.
– Greenfield: The key challenge for Hulu, because they got great consumer adoption, is what will happen if they put a full ad load? Will that kill the service? I’m sure everyone on this panel would love to be considered similar to Hulu from a consumer perspective. But how can they make money? Is it an ad model? Is it a paid model?
– Rafat puts the question of “openness” to Caraeff: We don’t put a lot of restrictions of where Vevo can be put: any digital device or console. But I can’t allow the advertising to be scraped and put on an MP3 or audio on demand service.
– Caraeff: Our goal is not to change people’s behavior and just be the one destination for music videos. A lot of people are comfortable with AOL (NYSE: AOL) or Yahoo (NSDQ: YHOO) or MTV. Vevo wants to power those places. We don’t just want them to come to Vevo.com. We’re selling all the advertising and controlling the inventory over our network, which includes AOL, CBS Radio. Greenfield: Did Warner Music Group (NYSE: WMG) make a mistake in not joining? Caraeff: Their priorities are different. I don’t think they have scale to drive major advertisers to their sites. We’re doing 30 million streams a day. No one music company can do that.
– Verklin: Do you know how we’re keeping track of viewers in Paducah, Kentucky? Nielsen diaries! That’s Neolithic. We’re not attempting to throw a grenade into the TV marketplace, but we do want set-top box data to be the main unit of measuring viewership.
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