NARM DAY 3: VEVO RIO
Caraeff talked about the genesis of VEVO in response to Cohen’s take that the music industry had not done a very good job of creating their own services in the past. “Other than the music itself, none of the record companies came up with anything to compare to services like YouTube, Facebook, MySpace, etc.” Caraeff discussed the burden of execution, answering the question, “So how are they going to screw this up?” with how, in VEVO, they set out to do one thing right, while also achieving scale and being meaningful to both the content holders as well as the consumer.
Caraeff addressed the issue of how the music industry is not one that is comfortable with long-term plans of five or 10 years. “We needed to get big quickly,” he said. “We had to generate revenue from more than just people who want to buy music”
He described his deal with YouTube as one of his most strategic, trying to be in line with the physics of the web. “The consumer is going to go wherever they want,” he said. "You can’t just tell them to go to the places on the web you want them to.” The benefits of the YouTube deal? “We get their traffic; they get our rights and licenses.”
Speaking of rights and licenses, Caraeff added that the only major not involved with VEVO was Warner Music Group, but suggested that they were making progress in talks. He referred to new alliances with AOL and CBS, indicating they were talking syndication deals, both with companies that currently have videos and those that don’t, but might in the future. “We have to embrace ubiquity for the fan... everywhere they are and want to see music videos.”
Caraeff also pointed out the need to restore the luster of online advertising rates. A new VEVO ad deal with Colgate-Palmolive includes ads that will incorporate new and developing artists (something he admits VEVO is lagging behind in) and will pay both artist and label when the ad runs. He said that the Top 10 videos still drive most of their revenues and was as yet unable to point to a success story in breaking an artist on their own, but is hoping to improve on that.
“We are not screening videos,” he said in reaction to a question about VEVO’s selectivity/ “We take everything that companies give us.” Which recalls the early days of MTV. But he also talked about VEVO’s struggle with getting low-quality duplicate videos out of the system, because they often receive the same clip from so many different sources.
VEVO is currently licensed only in the U.S. and Canada, and, though it is available worldwide on YouTube, Caraeff said that they are preparing for an international rollout.
As to whether VEVO would ever consider becoming a premium site, Caraeff insists: “We don’t want to be behind a pay wall, but there might be a premier service at some point."
Caraeff feels good about where VEVO is in its first six months, as the eighth largest online video outlet in the U.S., “which is important because we’re in the ’up-fronts’ period when advertising dollars get locked down for the year.”
Caraeff answers a question about whether MTV squandered their chance at doing the same thing: “MTV was about a lifestyle... They migrated to where the best place on TV was for them and they put music on the back burner. VEVO is all about music and we will continue to be just that.”
