Vevo chief wants to make sweet music with brands

Rio Caraeff, the man in overall charge of the latest business to try linking brands with UK music fans, believes his video-focused online offering will compete more with ITV than Spotify.

Vevo: chief executive Rio Caraeff, centre, with John Mayer and Taylor Swift
Vevo: chief executive Rio Caraeff, centre, with John Mayer and Taylor Swift

Vevo hosts around 30,000 free-to-watch music videos and additional content for fans keen for a closer relationship with their favourite artists.

A joint venture between Abu Dhabi Media, Sony Music Entertainment and Universal Music Group, it launched in the US in December 2009 and struck syndication deals with partners including AOL, CBS and Facebook, and partnerships with 350 brands.

It launched in the UK on 26 April with 14 brand partners, including Wrigley, O2 and BT, with more to be announced over the next few weeks.

Caraeff, speaking to Media Week to talk up the launch, says Vevo should be seen as much more than just a music video distributor.

"We are investing heavily in live music, original programming, providing brands with an opportunity to get extremely close to artists and the content," the chief executive says.

"Music is the perfect ingredient for brands to deliver messages to consumers, as it is in so much of their DNA."

Last year, Vevo produced 100 episodes of original programming. Most recently, it launched 'Vevo Stylized', an online show about how music and fashion influence each other, featuring artists such as Jessie J. Caraeff says the format provides multiple advertising opportunities, such as product placement, for retail and cosmetic brands.

David Kohl, Vevo’s executive vice-president, sales and customer operations, claims the 25-strong UK team, which is to be led by Jonathan Lewis, head of digital media at Channel 5, will be focusing on creating UK-centric content.

Kohl, says: "One of the main concerns we got from UK brands was how much UK-centric content we have at launch. But at around 30 pieces, from artists including Florence & the Machine, James Blake and Adele, I'd say we have quite a lot."

He adds that brands such as McDonalds, BT and O2 are exploring a raft of "innovation partnerships" with Vevo, to launch upcoming artists, promote established ones and sponsor live series' or video premieres.

But beyond brokering brand and agency deals, Vevo is also working on developing relationships with syndication partners in the UK.

Currently, it is distributed through its main site, YouTube, and free Android, iPhone and iPad apps in the UK, but Kohl says it is in the stages of closing deals that will help it deliver its "ongoing effort" to distribute content to expand the platform to broadcasters.

Caraeff says: "The whole strategy is about putting Vevo where the fan is rather than getting them to come to us. The internet is about choice and options, not telling people what to do."

While all broadcasters in the UK have "reached out" to Vevo, Caraeff explains that as well as being potential partners, he sees ITV, Channel 4 and Sky as direct competitors.

"We are competing against every opportunity for online video watching and every service that is appealing to the same brand advertisers", says the former Universal Music digital executive.

In March, according to ComScore's latest figures for video properties (excluding ad networks), Vevo attracted 7.8 million unique viewers from the UK, though the vast majority (7.6 million) visited its channel on YouTube and only 616,000 visited the Vevo.com website.

By comparison, Google-owned sites led with 27.4 million unique viewers and ITV sites had 3.01 million. Sky sites had 2.85 million and Channel 4 had 2.27 million (not including its YouTube presence).

Being relatively new to market, Vevo is not yet profitable, but will money from brands be enough to sustain the business over the next few years, particularly given that Spotify recently restricted its ad-funded service to drive take-up of its subscription service?

Caraeff says: "There are billions of people on the planet who love music, but only a small amount of them want to pay for it. I think we would have a tough time getting them to pay for something they don't want to."

Spotify is a "very different" experience to Vevo, and therefore not a direct competitor, he says. "But if I was an audio company, I think I would have a hard time generating the same returns as video."

Having gained significant scale in the US, with more than 60 million unique monthly visitors, and having launched in Canada and the UK, Vevo plans to launch in more countries. But is the world ready for this sort of business?

"We think we have a good chance because music popularity, consumer enjoyment and viewing has never been higher. We see brands clamouring for access to this audience and we have delivered them the perfect platform to reach it," says Caraeff.

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