YouTube Concedes to Music Industry With Off-Site Vevo Hub for UMG

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Universal Music Group and YouTube formally announced today Vevo, their expected music video web venture. Details about how the site will be implemented are still pretty sparse; it will be “ready later this year,” will include content other than music videos, and options to buy merchandise and concert tickets. Other labels may still join.

Vevo is the first satellite web site for YouTube, and the move should be seen as a concession since it detracts from the value of YouTube as a portal and an interlinked community. As we wrote last month, “Creating a labels-only music video site would shatter YouTube’s would-be role as a single searchable hub for all the world’s video.” Under pressure to make money, YouTube is acquiescing to UMG’s desire to have a separate music site out of the user-generated fray. The move comes after content from music labels and publishing groups such as Warner Music Group, the UK’s Performing Rights Society and German royalty collections group GEMA, have disappeared from YouTube following unsuccessful contract negotiations.

Google (s goog) CEO Eric Schmidt reportedly said at a joint press conference with UMG that he hopes to introduce additional YouTube satellite sites in the Vevo mold.

UMG chairman and CEO Doug Morris said his company now earns roughly $70 million per year on music video distribution, after having lost about that same amount on music video production for unpaid promotion in the past. UMG is the most-viewed YouTube channel of all time, with 3.8 billion video views.

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Akash

Looks like YouTube is now a player in the high end white label publishing business. Good move.

Neno Brown

What we have here is a class system, Youtube for UGC and Vevo for Pro content. Whether Youtube UGC can trade-up to Vevo Pro content is a ?

Trading up to Pro level may mean cutting a deal with the; dear I say it… “The Majors”.

TheCommentator

Two companies that have never successfully built a media company/brand/experience coming together to form a media brand & experience. We shall see.

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