MTV, VEVO AT AN ONLINE IMPASSE

As predicted by our own IB Bad weeks ago, online licensing negotiations between Vevo and MTV have broken down, with the video site’s co-owner Universal Music Group pulling its clips off the music channel’s fleet of online destinations, including MTV.com, VH1.com and CMT.com.

The impasse does not affect music videos played over the air on MTV’s cable networks.

UMG had been licensing music directly to MTV for years, but is now directing all negotiations to its Vevo joint venture, whose owners include Sony Music Entertainment and Abu Dhabi Media Group, with EMI also participating in a non-equity position. The talk is that Sony will "likely" follow UMG’s lead when their deal is up this fall.

Sources say that MTV abruptly ended talks, and have refused to answer repeated calls to revive them.

MTV issued the following statement: “For almost 30 years, we have enjoyed long and colorful partnerships with all the music labels, including UMG and their talented roster of artists on MTV, VH1 and CMT. As the industry evolves, we continue to seek out new and innovative ways to connect artists with their fans that are mutually beneficial to everyone. However, during our recent discussions with Vevo, we were unable to reach a fair and equitable agreement for rights to stream UMG artists’ music video content. As a result, UMG has elected to pull their music videos from our web sites. We are disappointed by this move and sincerely hope that UMG will work with us toward a fair resolution and allow their artists to once again connect with the millions of music fans who visit MTV.com, VH1.com and CMT.com every month.”

A source insisted that Vevo offered MTV the “standard online video synchronization used in the industry by sites like Hulu and YouTube.”

UMG also released the following statement: “MTVN has been unwilling to negotiate a fair syndication deal with Vevo to carry our artists’ videos and consequently our videos will not be shown on their online properties. We believe that using Vevo as our online music video syndication platform is the best way to maximize revenue for our artists, our songwriters and ourselves, while bringing our videos to the widest possible audience. In less than eight months since its launch, Vevo has already become the web’s #1 rated video network with over 49 million unique visitors monthly, dramatically eclipsing those on MTV’s online properties, while attracting scores of major advertisers and tens of millions in advertising dollars. As a result, our artists are enjoying tremendous exposure on Vevo on YouTube and Vevo.com, and will enjoy even more as Vevo continues to complete syndication deals supplementing the existing arrangements with leading destinations like AOL and CBS Interactive.”

Insiders also indicate Vevo are set to strike deals with both Yahoo! and Univision.

Warner Music Group, which is not involved in Vevo, finalized a deal for MTV to sell ads around its music videos last month, giving the channel exclusive rights to its entire inventory, including YouTube, WMG websites and MTV.