Vevo. That's the name of the new music and video entertainment service that will house Universal Music's premium video content with a little help from YouTube. Universal Music Group (UMG) and Google, which owns and operates YouTube, announced the deal on Thursday. Vevo will launch later this year as a video hub that aims to attract consumers, advertisers and content owners. It will rely on YouTube's video technology to showcase Universal's catalog of artists and content.

"Technology has allowed fans to discover music in endless ways while creating new business opportunities for artists and labels alike," said Google CEO Eric Schmidt. "At Google, we are committed to promoting greater innovation and choice and are thrilled to be working with UMG in what will surely be an exciting new service for consumers, advertisers, content creators, and the music industry at large."

Monetizing YouTube

YouTube will power Vevo and host Universal's library of professionally created music videos on the new site. On YouTube, this content will be exclusively available through Vevo.com and a new Vevo channel through a special Vevo-branded embedded player.

Doug Morris, UMG's chairman and CEO, expects Vevo to have more traffic than any other music video site in the world at its launch. This traffic, he added, represents the most sought-after demographic for advertisers, especially as advertising dollars continue to shift from old media to new.

He expects Vevo will be uniquely positioned to monetize this opportunity as it grows to become the destination for premium music video content online. Financial terms of the deal were not disclosed.

"For music lovers who want the best in music videos, the Vevo experience will be second to none. At the same time, Vevo will expand the premium video marketplace, generate new revenue streams for content creators, and provide brand advertisers an unprecedented opportunity to get in front of a highly engaged audience," Morris said. "We couldn't be more excited about the huge potential we see in the Vevo service."

Universal Paves the Way for Change

Universal has already seen significant traction on its YouTube video channel with more than 3.5 billion views, making it the most-watched on YouTube. At the launch of Vevo, consumers will be able to access Universal's entire catalog of premium music video content, including professional full-length videos, artist-generated content, and user-generated content hosted on YouTube. Vevo will also serve as a syndication platform, expanding the reach of the brand.

According to Phil Leigh, a senior analyst at Inside Digital Media, YouTube is the likely successor to MTV. MTV has shifted from its original mission of airing music videos to incorporating more reality TV and other programming. Leigh said YouTube is poised to fill the void.
Jennifer LeClaire, newsfactor.com – Fri Apr 10, 5:00 pm ET

"Vevo is particularly attractive because it permits the user to play music videos on demand. As opposed to waiting for whenever MTV might choose to play a particular song, the user can choose to watch it and hear it whenever she wants," Leigh said.

"The problem is that historically the record labels have not wanted to share the content with YouTube because they wanted more money," he said. "But it appears that YouTube has worked that out, at least with Universal, and I would expect that we will continue to see the other labels move in this direction as well."