Allen & Co. is tapping Facebook, Yahoo, Amazon, Apple and Google to raise up to $150 million in funding for music video distributor Vevo, according to a weekend Wall Street Journal report.
The funding reportedly comes with a valuation of up to $1 billion but, outside of the deal, perhaps is more interesting for what it says about Vevo’s future prospects…
Today, Vevo’s main business is not as an own-brand service but as distributor of online music videos to its partners.
Owned by three of music’s four major labels and an Arab media vehicle, Vevo is effectively independent from its own clients, those partners, the main of which is Google’s YouTube.
Welcoming money and board members from Google or another of the major online content players reported by WSJ, as opposed to dedicated financiers, could negatively tie Vevo to its own clients, who are all fighting each other.
That problem could become more chronic given what an investment often represents – a prelude to a full takeover. How would AOL or Yahoo feel about licensing videos from a Google-owned Vevo, for example? The prospect could limit Vevo’s ability to distribute to all comers – something which has picked up over the last year.
On the other hand, the doors on which Vevo is apparently knocking reads like such a laundry list of Silicon Valley A-listers, it could just be an attempt to flush out private finance.
The funding report comes following chatter earlier this year that Facebook may snatch the exclusive Vevo partnership from YouTube. It seems many options have been on the table for Vevo this year.
Vevo is trying to diversify from music video provision to include original video format production, is building its own-brand offering on IPTV boxes and is in the midst of trying to become a global brand by rolling out to new countries this year.
But its U.S. May traffic fell by a fifth since last year, according to comScore numbers. Vevo attributed the decline to a comScore methodology change and to fewer views following a YouTube redesign.