Google and Vevo Renew PartnershipPosted on July 10th, 2013 by Lee Jarvis in Music Industry News
After a long drawn-out negotiation, tech giant Google has announced the renewed partnership with online video hub Vevo. The two had been battling over ad revenue share since the previous contract expired in April.
Google not only continue to bring their web knowledge and technology to the deal, but also made a much-needed cash investment. Although the exact details aren’t known, Billboard previously reported a sum between $40 million and $50 million, meaning that Google obtain around a 7% stake in the business. As owners of the Youtube platform, they also continue to direct traffic to Vevo’s online content. Vevo, in return, provide fully licensed official videos that are often among the most popular videos viewed via Youtube, and sell ad space worth hundreds of millions of dollars.
“We made an investment in Vevo,” Google said in a statement. “We are excited by their future prospects and to provide YouTube users with the best possible music experience.”
As the third most-popular video destination on the web (behind Youtube and Facebook), and owned by Universal Music Group, Sony Music Entertainment and Abu Dhabi Media Group, Vevo is an important part of the digital music industry, aiding in discovery and connection between music consumers and artists, as well as a forceful outlet and growing revenue stream for major label artists. Hopefully the new investment will be put to good use and further the possibilities of the portal as they continue to launch in many new territories, and move forward with plans to produce original content.
It had been reported that Vevo had scouted around for investment from other sources, including at one time, Facebook, but other potential deals were hindered with the looming and uncertain connection with Youtube. Now with this partnership in place, other strategic opportunities may come to light once again.