Vevo denies YouTube defection

Vevo's Australian launch this week comes as rumours swirl around the possible defection of the music video-streaming service from Google's YouTube.

Vevo
(Credit: Vevo)

Australia today joins the United States, Canada and the United Kingdom in having access to music-streaming service Vevo, as well as its iPhone, iPad, Windows Phone 7 and Android apps. Launched in 2009 as a joint venture between Sony Music Entertainment and Universal Music Group, Vevo is used by artists such as One Direction, Rihanna, LMFAO and Lady Gaga. While Vevo doesn't charge users for the service, revenue is delivered through advertising, both in banners on the company's YouTube channel and in short video commercials that play after every second video stream on the website. In Australia, MCM Media has been brought on to partner with Vevo to curate the Australian content and sign up advertisers.

Vevo boasts more than 45,000 videos and 240 million users, and gets 3.3 billion video streams across the globe each month. In Australia, through the company's YouTube channel, Vevo gets 5.5 million unique visitors per month, and 47 million video streams per month. Even though, until today, the Vevo.com site had been geo-blocked, Vevo's international senior vice president Nic Jones told ZDNet Australia that the company achieved approximately 50,000 unique visitors per month to the site.

Earlier this year, ZDNet Australia's sister site CNET revealed that Vevo was in secret talks with Facebook to move its video content from YouTube — where Vevo shares its advertising revenue with Google — over to the social networking giant, for a similar advertising revenue-sharing arrangement.

Vevo users will log in via Facebook, and users can share Vevo content through the social networking site. Facebook has recently expanded its music-sharing offering to include services like Rdio (recently launched in Australia) and Spotify (which is expected to launch here soon), and the company has more generally been eyeing other social platforms, with the recent acquisition of photo-sharing app Instagram for US$1 billion.

Should Vevo ditch YouTube when its contract comes to an end in a year, it would be able to shift users from the countries it has launched over to Facebook and the native Vevo platform, and remove a significant amount of the new music video content from YouTube's stranglehold. Yet Jones denied that Vevo is attempting to lure users away from YouTube.

"YouTube is a vitally important partner for us to get coverage. We're in over 240 countries with YouTube, but the plan has always been to light up Vevo.com. It's a different experience to Vevo on YouTube. We're not saying to users 'don't go to YouTube', but obviously we want to create a Vevo.com environment that we think is compelling. The issue for us is creating the best environment people want to go to," he said.

When the service launched in the UK in April last year, Jones said that YouTube traffic still continued to go up, but the company also managed to get 1 million UK users on Vevo.com.

Vevo will continue its global push into six more countries in Europe and Latin America in 2012. A number of other music-streaming services have lagged in launching in Australia, but this trend is changing, with Rdio and JB Hi-Fi launched in Australia, and Spotify set to launch soon. Jones said that he didn't understand why it had taken so long for these services to launch in Australia, but he said that everyone has received the message now.

"Australian consumers are massively passionate about music. If your monetisation model is advertising, I think Australia is right up there in terms of the size of digital market compared to all the traditional markets. People are prepared to spend large amounts of money on tickets to see live bands, which are, we think, the single biggest pointer to the passion that Australians have to music," he said. "Maybe it's the tyranny of distance, but from our perspective it's no coincidence that Australia is the third territory."

MCM Media CEO Simon Joyce said that Australia is a "golden nugget" for music artists.

"Australia's now the fourth most important touring market for major artists in the world, for a country of 22 million people. So that sums up the opportunity. We've been in the music-streaming space for some time, but people are now realising there's a bit of a golden nugget in Australia," he said.

Jones said that one of the benefits of launching the Vevo site and the accompanying apps in Australia is that it provides much more functionality. Users can now import their iTunes music, as well as create playlists and share videos across Twitter and Facebook. As a push onto televisions, Vevo will be launching on Xbox Live in Australia at the end of the month.

Jones said that the availability of high-speed broadband, such as the National Broadband Network (NBN), also played a role in determining where Vevo has launched so far.

"It's vitally important, and that's obviously a big player in what markets you launch in sooner rather than later," he said. He noted that it is interesting that Australians have metered internet content, while other launch markets do not.

Jones said that upcoming Vevo launches into Asia will be predominantly focusing on the mobile applications, where he said he believes most users will stream their content, rather than on the desktop.