VEVO-YOUTUBE DEAL
EXPIRES: NOW WHAT?
YouTube’s deal with VEVO expired last night, with the two companies still trying to hammer out an agreement, according to the L.A. Times’ Alex Pham.
Since the contract has a 120-day automatic extension that keeps it in effect through early April, neither side is pressed to get a deal done at this point, despite the hundreds of millions of dollars in advertising at stake.
The main sticking point is the advertising revenue split that YouTube shares with VEVO. Also under discussion is the "cost-per-thousand" ad rate that YouTube charges. VEVO believes that rate should be increased given its premium content.
YouTube ordinarily gives "the majority" of the advertising money it collects to content partners such as VEVO. That split could range from 51% to more than 75%, after a 10% sales commission is paid out. The current VEVO-YouTube arrangement has not been made public.
Last month, VEVO disclosed that it paid out more than $200 million to artists since 2009, much of that from YouTube, which generates the vast majority of the portal’s views.
Sony Music boss Doug Morris, who helped launch VEVO in 2009 as head of Universal Music Group, earlier this summer threatened to move its videos to other homes, with Facebook mentioned most prominently alongside Microsoft, Amazon and Apple.
Neither side, however, wants to be the first to say goodbye to what has been a mutually beneficial partnership.
"We always hope to renew our relationships with valuable partners," YouTube said in a statement, declining to comment specifically on its VEVO talks.
In October, VEVO attracted more than 52.1 million unique viewers, who generated 603.2 million views on YouTube, making it the most popular channel, according to comScore Inc. On the other hand, YouTube accounted for 98.2% of VEVO's overall unique viewers. The rest came from VEVO.com and Sony Music's site.
