Vevo was all over the internet in the 2000s. Today is just another forgotten episode of the old music industry

In December 2009, two of the biggest record labels on the planet organized a party in New York with Bono as the guest of honor to celebrate the launch of something that, according to them, was going to give them back control of the music business on the Internet, which, as we will now see, was not going through its best moment. It was called Vevo, an acronym for “Video Evolution.” The (r)evolution lasted less than a decade: the fundamental changes in the business and the arrival of a different way of understanding music videos relegated it to the secondary level of nostalgia for millennials which is today.

Bad times. In the late 2000s, The music industry was collapsing.. Income from record sales had been falling for years due to the combined effect of piracy and chaotic digitalization, unbeknownst to the labels, and which was very far from the orderly and official moment that it is experiencing today thanks to streaming platforms. For example: YouTube (which had already been bought by Google in 2006) accumulated hundreds of millions of video clip views without the labels seeing a single euro in compensation. Attempts were made to renegotiate the terms of that relationship, without success: Warner Music was the first to withdraw their entire catalog from YouTube in 2008.

Ideaca. Doug Morris, then CEO of Universal Music Group and a central figure in the creation of Vevo, envisioned a way to enter the internet and video clip business when he saw his grandson consuming online video clips with advertising, which led him to ask how much money Universal was generating with those reproductions… The answer was obvious: zero. From that point on, Morris pressured companies like Yahoo and MTV to compensate him for playing his videos. He did end up reaching an agreement with Google.

Q: Are We Not Men? A: We Are Vevo! Vevo officially launched on December 8, 2009 following an agreement between Universal Music Group, Sony Music Entertainment and EMI, with Warner Music Group joining years later, in August 2016. Vevo would provide the official catalog in high definition, YouTube would serve as a mass distribution platform, and both parties would sell advertising on that inventory. In October 2009, the Abu Dhabi Media Company already had invested about 300 million dollars to operate in the United States and Canada.

Immediate result? Spectacular. In its first month it was already the most visited music site in the United States, surpassing Myspace Music. The economic impact was also rapid: according to Vevo’s CEO at the time, the average CPM of an online music video went from $3 before launch to more than $30 in 2013. In 2012, Vevo accumulated 41 billion views annually across its network, with a catalog of around 75,000 videos. By August 2013, Vevo had surpassed MTV in terms of digital viewership: 609 million video views versus MTV’s 261 million that month. Vevo Certified for artists who surpassed 100 million streams became an indicator of cultural relevance comparable to a number one on sales charts.

Issues. However, Vevo’s structural problem was not the audience, but your delivery model. Although the company had a turnover of $250 million in 2013, more than 90% of that income was shared between labels, Google and music publishers. Universal and Sony captured 55% of the total and Vevo operated at a loss. It was, in practice, an advertising inventory manager without its own capital: it generated value for its shareholders, the labels and Google, but not for itself as an independent operating entity. In 2014, the company hired Goldman Sachs and The Raine Group to find a buyer willing to pay nearly $1 billion for the company. None appeared. Vevo ruled out the sale and announced that it would seek profitability through its own means.

Change of course. In April 2015, Erik Huggers (creator of the famous BBC iPlayer) arrived as the new CEO. Vevo then wanted build your own applications for mobile and connected TV, reduce its dependence on YouTube and eventually launch a paid subscription service. They began developing apps for iOS, Android and connected TV platforms, but it was short-lived: the paid subscription project was canceled in February 2017, and Huggers left the position. Sizes and layoffs took place and the commitment to technological autonomy ended.

Coup de grace. In January 2018, YouTube automatically migrated subscribers from Vevo-branded channels (such as “RihannaVEVO” or “JustinBieberVEVO”) to YouTube’s new Official Artist Channels. That same week, YouTube relaunched YouTube Music as a paid subscription service, directly competing where Vevo had tried to enter. Paradoxically, Vevo had broken even that year for the first time. But the proprietary model had never caught on, and without it, there was no reason to maintain the infrastructure.

What’s left of Vevo. Vevo has not completely disappearedlike other projects of the time. The company pivoted to the connected television business and FAST channelsthe free shelves with advertising. Its library exceeds 900,000 video clips and generates approximately 25,000 million monthly views. The model is, ironically, the one that MTV never managed to make happen: a free music network supported by advertising, although in the case of Vevo, distributed over the Internet instead of cable.

Vevo’s footprint is not entirely negative: it set the standard for the official high-definition music video on YouTube, created the monetization infrastructure that allowed video clips to become a business again, and demonstrated that the recording industry could negotiate on an equal footing with technology platforms. But the fact that the video clips have ended up becoming amateur choreographies on TikTok is something that, of course, the CEO of Universal could not foresee.

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