Vevo founder warns Google: Sweeten deal or we'll go elsewhere

http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-doug-morris-vevo-google-20120710,0,3298354.story

by kapkapkap • 14 years ago

14 26 14 years ago

confluence6• 14 years ago

I don't think they realise who has the real bargaining power in this negotiation. VEVO needs YouTube - YouTube no longer needs VEVO.

Google will be more than happy to let them walk away and allow remixes and user posted content to fill that hole (it's how YouTube started). VEVO will just come crawling back.

YouTube has a monopoly on online video and they may just turn out to be one of Google's most valuable acquisitions (along with DoubleClick/Android).

> Morris: If Justin Bieber and Adele are somewhere else, that will be where people will go. If you don't have the content, no one will come

YouTube has the people now (daily standing subscriber audience + network effects) - the content comes to YouTube not the other way around. People pay/share video revenue on YouTube by posting via Machinma/IGN just to get exposure.

kleiba2• 14 years ago

Are you sure about that? If facebook got the rights for the music videos and would integrate them tightly with the rest of their site, chances are that youtube would start becoming irrelevant. You're right that right now youtube has got the users, but facebook does, too, and they especially have the users who are interested in music videos. That makes them especially attractive for remixers etc. too.

untog3• 14 years ago

Are you sure about that? If facebook got the rights for the music videos and would integrate them tightly with the rest of their site, chances are that youtube would start becoming irrelevant.

Not even slightly. Music videos are a market, but YouTube has hundreds of other reasons it is successful. It could lose music videos without breaking it's stride.

confluence6• 14 years ago

Global instantaneous video hosting infrastructure is a very tough nut to crack and is subject to economies of scale.

My experience with Facebook video has been disappointing (improper caching/not enough resources) and at no fault of their own. Pushing Tbits of video each second around the world is much - much harder than hosting pictures and comments (which is what Fb does admirably).

If Fb cracks video infrastructure - perhaps. But YouTube remains the king of video and anyone who wants to run content needs to be on YouTube (at least for the time being - subject to change at any time).

ethank• 14 years ago

I don't think you realize the power Rio has with a JV with Universal. Nor the power that Lucien Grange has with the UMG roster and catalog. Plus YouTube is the only Google property with licensing deals for all four majors, but not all four are in Vevo.

I'm popping popcorn. These Youtube/Google/Music negotiations are always entertaining (if not consumer friendly).

jrockway2• 14 years ago

I've personally never watched a music video on YouTube. I've accidentally clicked on a Rick Astley link, but I didn't actually watch it...

rachelbythebay• 14 years ago

Working there and posting things like this is probably not a good idea. They have a way of showing up in depositions.

waterlesscloud2• 14 years ago

9 of the top 10 most watched youtube videos of all time are music videos.

Vevo is not without leverage here.

http://www.readwriteweb.com/archives/top_10_youtube_videos_o...

confluence6• 14 years ago

You'll also notice that many of these artists launched (and sustain) their careers thanks to YouTube and channel those views towards live concerts and merchandise sales from fans.

The artists rely on YouTube a hell of a lot more than YouTube relies on them - they come to YouTube now (not true in the past though!).

VEVO is separate from the artists - the artists will drop VEVO if their exposure is unnecessarily limited.

VEVO can play this game if they wish - but I doubt the artists care either way.

PS: Bieber and Gaga owe their careers to YouTube - they don't care if it's via VEVO or their own channel - they have absolutely 0 reason to get off the YouTube train. They'd drop VEVO in a heart beat if VEVO hampered their fan base growth and reach.

idspispopd6• 14 years ago

Google's own top 10 searches are usually populated with music stars. Taking just last years Zeitgeist we have Rebecca Black and Adele in 1st and 7th place respectively.

Sure it could be people hunting for nude pics and news, but given it's Rebecca Black and Adele, it might be safe to say that it's people looking for their music/music videos.

In short, music is a big deal and if a user is hunting for music they're not going to be loyal to any particular site.

idspispopd6• 14 years ago

I get that this site(HN) has a lot of google fans, to the point that often completely illogical arguments are painfully maintained by characters that would rather gush loyalty than have an honest discussion.

But to those that think youtube is holding all the cards here need to look at what has undone so many other sites.

This is youtube's largest channel, and it's a large source of referral traffic, especially social sites like facebook.

It's google's prerogative to keep this kind of referral traffic, not only to maintain relevance, but also to be perceived as the first choice in online video. If the average teenager begins to associate another site as the first choice in video that would have follow on consequences as google would not be able to control the user experience. (Or tout Google+) Users will hunt around for the right video, they're not so loyal as to abstain from watching a music video because it comes from vimeo etc.

Youtube has been effective at shutting outtheir competition with exclusivity deals like these, a competitor could do the same to youtube - and this is a pretty desirable catalog that appeals to a very active online demographic, it would instantly make a competitor relevant, elevating them above the pool of B-grade youtube competitors.

untog3• 14 years ago

The truth lies somewhere in the middle. Both Google and Vevo benefit from the current arrangement. As someone who works at a video-based startup, I can tell you that for a large majority of people online, YouTube = online video. Getting sites (like, say, Tumblr, Reddit, etc) to accept video embeds from you is a huge pain. Grafting on a layer of social networking similar to YouTube's and getting people to actually like, comment, etc. is incredibly difficult.

YouTube works, for good reasons.

idspispopd6• 14 years ago

I don't think it'll be the undoing of youtube - not at all. Youtube offers much to their audience, this certainly won't dramatically change their business. It does however give any competitor a much better standing to compete against youtube, giving the competitor relevance and a bucket load of traffic from consumers seeking desirable content. (The top 10 searches every year involve one or more music celebrities.)

It'll be interesting how it plays out anyway, now that google has announced it will discontinue video search altogether (in favour of youtube only.)

creamyhorror• 14 years ago

Your argument about Youtube's relative power in this relationship is fine, but your comment attacking HN "google fans" as arguing illogically and not willing to carrying out honest discussion is uncalled for. If you want to make such assertions, do it in response to a relevant comment, not as a random potshot.

idspispopd6• 14 years ago

Thank you for your opinion on my conduct.

However you should note that I did not make the argument that all "google fans" were of this type of illogical character, rather that some do and have already begun filing responses of this kind in this thread, making it futile to reply to each, especially when this kind of fanboyism is immune to any contradicting realities presented to them.

Finally my "potshot" makes up a relevant piece of my argument, more specifically the argument that "being a fan of google doesn't invalidate vevos importance or clout".

confluence6• 14 years ago

I am a YouTube/Google fan with great reason - they provide 2 critical infrastructure services (instantaneous global video distribution/search) at little to no cost for the vast majority of the world.

VEVO is a middle-man who is only as strong as his grip over the conduit between 2 parties.

The artists require exposure and YouTube requires the content. However, as YouTube now has a daily standing audience (network effects/sticky subscribers), the artists want YouTube more than YouTube will want any one artist (for channelling views towards live concerts/creating new fans/selling merchandise offsite). It is to any one artist's detriment if they reduce their YouTube exposure - as their artistic competition will be happy to take their views for themselves (time per person per day is the limiting resource).

VEVO's strength is their subscriber funnel that pushes massive numbers of views towards new/existing artistic content. This is thanks to Metacalf's law and a strength that will be lost if they drop off YouTube.

If VEVO falls off YouTube someone else will take the mantle - and YouTube will extract their pound of flesh.

YouTube used to be weak. They aren't any more. They are the 800 pound gorilla now.

idspispopd6• 14 years ago

Vevo would certainly take a hit, but it won't be their end.

I think a competitor could do more with vevo than the commoditising approach of youtube.

Imagine if vevo were incorporated into facebook for example. It would be a larger audience with highly targeted ad & opportunity to sell network.

Zenst• 14 years ago

Is it just me, but threatining to pull all "Justin Bieber" video's from youtube as a threat is perhaps not the strongest point to win a argument. I'd pay Google to do that.

Also reading the article, Vevo in effect created this situation and to complain publicly does seem in bad taste as I see it as Vevo stole a opertunity from Universal, created a new monoply with the help of Googles youtube and then now that has been established are trying to bully more money from them. This is ontop of the aspect that Vevo said they would control/do the adverts and in that they are perhaps at fault for there own shortcommings and blaming Google for it in a way that is mearly showboating.

But again a youtube without Justin Bieber is one I realy have no issues with at all, were do I sign?

laserDinosaur• 14 years ago

Makes sense to me. Maybe Google should lower the rates a little. I'm sure Google would prefer to earn $10 with reduced fees from $15 than earn 0$ and create a competitor.

Vevo founder warns Google: Sweeten deal or we'll go elsewhere

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