@ Vevo Launch: Google’s Schmidt: The Music Industry Will Finally Make Money Selling Music Online

The Vevo launch party has been going on for an hour and executives and stars are ready to take the stage. I spoke briefly with Google (NSDQ: GOOG) CEO Eric Schmidt, who told me that Vevo, which is a joint venture between Google’s YouTube and the major record labels, will “revolutionize the music industry by finally allowing it to make money online.” As for how, he told me to wait and see, but he added that advertising, merchandise and ticket sales are part of the mix. As I was being ushered out of the VIP section, I managed to talk with artist Sheryl Crow. Asked what impact Vevo could have on the industry, she said, “Nothing will ‘save’ the music business, but every little thing helps. And anything that puts money in artists’ hands for the work they do is a good thing.”

U2 leader Bono is taking the stage now to start the proceedings: “We are here to launch the great cash cow that was the music business. But we are also here to celebrate a new model for the music business. It’s also a great vehicle that will allow fans to go behind the scenes with their favorite artists.” Still, Vevo is starting off small, it won’t feature HD until sometime next year, he added.

After Bono’s introduction, Doug Morris, chairman and CEO of Universal Music Group, took the podium and offered some back story on the creation of Vevo and the meetings with Google. He then turned to the launch. “Right now, four million YouTube users who click on a music video are, as we speak, being shifted from YouTube to Vevo This group controls over 80 percent of the world’s videos. This is the chance to stop playing defense and shape the next generation.” While UMG has been joined by Sony (NYSE: SNE) and EMI in backing Vevo, Morris hinted that another label is in the process of signing up — a subtle hint to Warner Music Group (NYSE: WMG), the one big holdout?

Finally, it was Schmidt’s turn. Bono had introduced him to Morris, who asked him what Google’s problems were in terms of music. For Google, it was letting YouTube users watch music videos and not having to worry about takedowns and piracy. From there, Morris said he described the concept behind Vevo: sell advertising on music videos with the full involvement of the record industry. Morris then promised to round up the other record label heads.

Vevo CEO Rio Caraeff said Vevo will manage the ad inventory and sales, while YouTube will remain a separate area for fan-based music videos. “With YouTube’s scale and metrics, the music business has a channel that will allow them to realize significant revenues.”

Kicking off the launch, Vevo will premiere some new videos tonight from artists like Mary J. Blige and Mariah Carey. Singer/guitarist John Mayer has joined Caraeff on stage to walk through the various features. As Caraeff clicks a button to queue up a video, Mayer turns to him and asks, “So how much are you sweating right now?”