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YouTube (s GOOG) is reportedly in the process of buying a minority stake in Vevo, the major-label-owned music video platform. AllThingsD reported late Wednesday that the deal isn’t done yet, and the Guardian added Thursday that the investment would be around $67M, giving Google a close to 10 percent stake in Vevo. Regardless of the final number, the deal would make a lot of sense.
Vevo is by far the biggest video publisher on YouTube. Recent comScore numbers show that Vevo clocked close to 565 million video views and more than 50 million unique viewers on the site in December alone. There are few other publishers on YouTube who come close to those view counts, and no one else engages so many people. Check out the chart below for details:
Vevo’s deal with YouTube was up. Vevo had been distributing its videos on YouTube ever since its launch at the end of 2009, but its deal with the Google-owned video site ended in December, and there had been persistent rumors that Facebook had shown interest in stealing Vevo away from YouTube. With a new deal, Google can deepen its ties with Vevo, ensuring that it will be able to show major label-owned videos for years to come.
Mobile and TV is getting bigger. This one is a bit of a long-shot, but worth considering nonetheless. More and more music videos are consumed on mobile and connected devices, be it phones, iPads or Xboxes. Vevo recognizes this, and has put lots of work into some pretty slick mobile and connected apps. The problem for YouTube is that it isn’t seeing any of the money from those mobile plays: Vevo is delivering and monetizing videos to mobile and connected devices on its own. It’s unclear whether this new deal would immediately change anything about this, but it’s possible that YouTube wants to get a foot in the door to eventually get a piece of this cake as well.