Further evidence of the company’s success: The impressive financials announced by Vevo president and CEO Rio Caraeff during an onstage interview at our D: Dive Into Media conference.

“In the last year alone we’ve generated over $150 million,” said Caraeff. “We paid the labels about $100 million (over the last 2 years). So we’re making money.”

An impressive feat for such a young company. How did Vevo pull it off? By not holding back its content.

“Our strategy was never to create value through scarcity,” Caraeff said. “We feel the Web is about choice and empowering people to go where they want. With Vevo we wanted to facilitate access. So you go to YouTube and you can find Vevo. Go to facebook, you find Vevo. It’s about ubiquity on the Web.”

Mobile is another point of access. Xbox is yet another.

“Our business is only as interesting as it is large,” said Caraeff. “If we want to reach a lot people, we need to be in a lot of places.”

So just how big is Vevo’s business? Pretty big.

“From a volume perspective our growth has been tremendous,” said Caraeff. “We had 300 million global views per month when we launched. Today we’re seeing 3.5 billion views per month. That’s about 42 billion views per year.”

So what’s Vevo’s next move? Will it pursue a linear strategy, head to cable?

“It’s unlikely that we’ll start a cable channel from scratch or buy a cable company in distress,” said Caraeff. “But I think we’ll have linear experiences on the TV all powered by Vevo.”

Meanwhile, YouTube users seem very happy to do what they have always done on YouTube: Watch weird clips of people and animals behaving oddly.

The site has published its list of 2011’s most popular videos, and they’re basically what you’d expect: Clips of cute dogs, and cute babies, and an annoying 8-bit cat, and a really cute cat. And, of course, Rebecca Black, the poor/maybe rich girl who may or may not be in on the joke. Probably not.

The surprise, if you don’t pay attention to this stuff, is that YouTube’s Top 10 most-popular list of 2011 isn’t really the site’s Top 10 most-popular list. It’s the list of the top 10 videos not put out by big music companies.

Because those clips, which are distributed by Vevo, the Hulu-for-music videos, are way, way, way more popular than anything else on the site.

The most popular music video of the year, for instance, is this Jennifer Lopez clip, featuring Pitbull. It’s at nearly half a billion views, which means it is likely more than 2x Rebecca Black’s clip, the top non-big-music-label clip.

In fact, it turns out that any clip featuring Pitbull does exceptionally well. Here are two more, which collectively have generated close to 400 million views. I’ll let much smarter people, like Maura Johnston, explain why Pitbull is so popular. For our purposes, the key takeaway here is that people really, really, really like watching music videos on YouTube. Even more than they like funny girls and cute cats.

Catchy and cutting is how I like my musical tech commentary, and South Dakota hip-hop group Soulcrate dials it in with new single “Click, Click, Follow, Follow.” Plus, the music video is both goofy and depressing, with a guy walking around a desolate, wintry town, being led by his iPhone.

If you tactfully @ me I’ll @ you back soon
I’m ignoring your texts cause I’m in the back room
Posting pictures of my pets and my awful tattoos
More bad news cool song cool shoes new car
Don’t take too long tell them who you are

Google’s video service accounts for 22 percent of all mobile bandwidth, reports Allot Communications, a telco outfit that tracks this stuff twice a year (via GigaOm).  YouTube’s global share is up from 17 percent a year ago; not surprisingly, YouTube is the dominant mobile video streaming service, with 52 percent of the market.

That jibes directionally with music video site Vevo’s reports of a boom in its mobile traffic, as well as continued growth from Facebook and Twitter, which happen to be excellent sources of YouTube links. Allot reports that Facebook has seen a 166 percent increase in mobile bandwidth so far this year, while Twitter is up 297 percent.

And if you’re watching a video on Vevo, there’s an increasingly good chance you’re watching it on an Android phone, an iPad or some other mobile device. The company says that 85 million of its three billion video streams came from mobile platforms in May; that mobile number was up 64 percent from the previous month, and up 365 percent from January.

Not a big surprise. A bit surprising: Where those mobile views are taking place.

Vevo says its research shows that mobile viewing isn’t really “mobile” at all — it happens most frequently in the bedroom, and second-most frequently in the living room.

A few more statistics help clear the picture up. Vevo also says that half of its users are 13 to 24 years old, and that most of its mobile views come in the evening and the afternoon. So here’s my interpretation of the data: Instead of coming home after school and watching MTV on the couch like the youngsters of long ago, today’s kids are coming home and watching videos on their own personal screens.

Some Web video purveyors — notably Netflix CEO Reed Hastings — have played down the impact of phones and tablets on their business. They’re most interested in what happens when people watch their stuff on TV screens, in their living rooms. But Vevo’s videos are practically designed for small-screen consumption — so much so that people seem happy to watch them even when much bigger screens are a couple feet away.

In “3 Dreams of Black,” which Milk prefers to call an interactive film, the viewer takes control in certain sequences, using the computer mouse to steer a stampede of morphing wildlife, or build structures in a vast desert. Five months in the making, the video shows off a burgeoning technology called WebGL, which allows an Internet browser to render 3-D graphics in real time.

Read the rest of this post on the original site »

On “Late Night with Jimmy Fallon” earlier this week, the host and Hollywood actress Gwyneth Paltrow revived their mock ’80s R&B duo Shazzazz, after a first music video in May on the late-night television talk show.

It’s all about doing it.

That rap, “Let’s Do It,” was followed by “We’re Gonna Do It,” and then “Remember When We Did It.” Finally, in Milli Vanilli style came “We Did It.”

Here are the videos:

Whatever–just watch, as it is really delightful:

The Vevo team studiously took notes from Hulu leading up to the launch. That’s why, for instance, the company made the antitrust-appeasing move of bringing in a financial investor alongside content owners Universal Music and Sony (SNE).

But it got this part all wrong. Hulu had a (high-profile) alpha launch for months before it opened to the masses. Vevo opened for business on a single day, and promptly broke.

The relationship between Vevo and Schematic, the shop that built much of the site, wasn’t great to begin with–earlier this fall, there was some internal fingerpointing about cost overruns and/or delays–and I can’t imagine that this will make things any better.

But for the record, here’s Vevo’s “Hey! Chill out! We’re working on it!” message:

The traffic VEVO.com is experiencing right now has exceeded even our largest expectations and is multiple orders of magnitude above what any other online video service has generated at its launch. The VEVO team is working diligently to enhance the infrastructure required to more than meet the demands of the tens of millions of users who are trying to access the site on day one.

Still, this isn’t a total wipeout for Vevo. Because while everyone has rightly been flocking to Vevo.com itself for a look-see, it’s not the most important Web site for the joint venture. That would be YouTube, where most Vevo users are actually going to encounter–and watch–Vevo videos, without even knowing that they’re watching a Vevo video.

To be clear: When Google’s (GOOG) video site agreed to help Universal Music Group (and later Sony) launch a new hub for music videos, it didn’t mean it would be sending its users away from YouTube.

When you read about Vevo launching with 400 million video views in the first month, understand that the majority of those aren’t coming from the new site but from YouTubers who are watching music clips the same way they always do, on YouTube. But Vevo will get credit for those eyeballs and any ad dollars they generate.

So for now, the advice I offered would-be Vevo-watchers yesterday in advance of the launch remains useful today: If you want to watch a Vevo video, head to YouTube. Vevo won’t mind. Really.

Google’s YouTube and Vivendi’s Universal Music Group will be launching a new site, dubbed VEVO, that will highlight UMG’s videos. The site will launch in “coming months” according to a press release (below). And YouTube users will still be able to watch UMG clips from the likes of Lil Wayne via a “new VEVO channel through a special VEVO branded embedded player.”

This is essentially what I’ve been calling “YouTube Music,” and it’s been in the works since last fall. In March, I reported that the two sides had basically hammered out a deal.

I’ll be tracking down whatever details I can throughout the day, but at first glance, this is a pretty big deal for YouTube, the music business, and the rest of the media world.

• YouTube, which dominates the market for Web video but can only sell ads against a small portion of the clips it shows, gets to hang on to valuable, advertiser-friendly inventory.
• Universal gets its best shot at making money from something other than music sales, which it desperately needs to do. I’m also assuming that it gets a large chunk of cash upfront: The press release says the two companies will share ad revenue, but I’d be shocked if UMG CEO Doug Morris wasn’t able to wrangle a significant advance from Google (GOOG). UPDATE: No word on an advance, but I’m told that the two sides have scrapped their earlier arrangement, in which Google paid Universal a fraction of a penny every time someone played on of its videos. That’s a big deal: YouTube has complained that the previous deal was a money-loser, while the labels have complained that they weren’t getting adequately comped for their content.
• Obvious question: Will Universal’s fellow labels–Warner Music Group (WMG), EMI and Sony (SNE)–come on board? Sony has already re-upped its deal with YouTube, and Warner is currently at loggerheads with the video site. I assume that all of them will want access to the dollars and eyeballs that Universal is now getting, but a person familiar with the deal tells me that it’s not a foregone conclusion–in part, because neither YouTube nor the labels understand how VEVO will do. It’s possible, for instance, that both Sony and YouTube will be happy to keep the label’s videos on the larger site. “This is their big toe in the water,” an insider tells me, speaking of YouTube. “I’m not sure they want their whole body in the water.”
• The deal is also an important signal to other content providers YouTube would like to do business with: Give us your best stuff, and we’ll cut you a special deal. Now that YouTube is creating a new site for music videos and directing some its traffic there, who’s to say it couldn’t do the same thing for movies or TV shows? The company would desperately like to sell ads against some of Hollywood’s premium content–whether it’s Sony’s movies, or Disney’s (DIS) shows on ABC. So VEVO may be a template for future deals.

More later. For now, here’s a Lil Wayne video, followed by the press release:

UNIVERSAL MUSIC GROUP (UMG) AND YOUTUBE TO LAUNCH REVOLUTIONARY PREMIUM MUSIC & VIDEO SERVICE

VEVO – UMG’s Premium Music Service Powered By YouTube
To Launch In Coming Months

NEW YORK, NY and SAN BRUNO, CA, Thursday, April 9, 2009 – Doug Morris, Chairman & Chief Executive Officer of Universal Music Group (UMG), the world’s leading music company and Eric Schmidt, Chairman of the Board & Chief Executive Officer of Google Inc., today announced that UMG and YouTube, a Google subsidiary, are working together to launch VEVO, a music and video entertainment service that will feature UMG’s premium video content.

In addition to VEVO, YouTube has renewed and extended its successful partnership with UMG that allows users to continue creating and watching user-generated videos containing UMG sound recordings and Universal Music Publishing Group’s compositions on YouTube through various territories around the world. The two companies will also share advertising revenue on YouTube and VEVO.

Launching later this year, VEVO will be a premium online music video hub built for consumers, advertisers and content owners that will blend UMG’s broad catalog of top artists and content with YouTube’s leading edge video technology and user community. YouTube will provide the technology infrastructure that will power VEVO and host UMG’s extensive library of professionally-created music videos on the new site.  On YouTube, this content will be exclusively available through VEVO.com and a new VEVO channel through a special VEVO branded embedded player.

“VEVO will bring the most compelling premium music video content and services to the world’s single largest online video audience,” stated Mr. Morris. “We believe that at launch, VEVO will already have more traffic than any other music video site in the United States and in the world. And this traffic represents the most sought after demographic for advertisers, especially as advertising dollars continue their shift from old media to new. VEVO will be uniquely positioned to monetize this opportunity and a host of others as we grow it to become “the” destination for premium music video content online. For music lovers who want the best in music videos, the VEVO experience will be second to none.  At the same time, VEVO will expand the premium video marketplace, generate new revenue streams for content creators, and provide brand advertisers an unprecedented opportunity to get in front of a highly engaged audience. We couldn’t be more excited about the huge potential we see in the VEVO service.”

“Technology has allowed fans to discover music in endless ways while creating new business opportunities for artists and labels alike,” said Mr. Schmidt.  ”At Google, we are committed to promoting greater innovation and choice and are thrilled to be working with UMG in what will surely be an exciting new service for consumers, advertisers, content creators and the music industry at large.”

At launch, people will be able to access UMG’s entire catalog of premium music video content, including professionally-created and full-length videos on VEVO, as well as artist-generated content and user-generated content hosted on YouTube.  VEVO will also serve as a syndication platform, expanding the reach of the VEVO brand. This innovative platform is aimed at providing consumers the very best in digital music content while further extending UMG’s lead in the direct-to-consumer market.

Presently, UMG’s YouTube video channel has more than 3.5 billion views, making the UMG channel the most watched on YouTube.

At the top of a VideoSurf results page for ‘Mad Men,’ users can search for clips featuring specific characters.

This week I tested VideoSurf.com, a site that claims to be the first to search videos by “seeing” images that appear in these videos. The company says its technology can analyze a clip’s visual content, as well as its metadata — especially when searching for people. VideoSurf has analyzed and categorized more than 12 billion visual moments on the Web to understand who the most important characters and scenes are in a video, and it uses this knowledge to sort clips according to relevancy.

Search results on VideoSurf spread out videos in a filmstrip-like format, distinguishing one scene from the next. Users can choose an option to show only faces, which helps if you’re looking for a specific person in a long video or movie. And when looking at videos from certain sources, you can select a scene from the filmstrip and jump ahead to that scene rather than sit through the entire clip.

When it works, VideoSurf is one of those technologies that make you wonder why someone didn’t think of it sooner. The site aggregates content from about 60 sources, including YouTube, CNN Video, Hulu, ESPN and Comedy Central, and a sorting tool weeds out unwanted results like the irksome slideshows that are labeled as videos. VideoSurf can find videos on all kinds of subjects, but it really shines when it finds well-known people.

But VideoSurf has some rough edges and doesn’t always work as it should. In its defense, the site is still in its public beta, or trial, stage, and plans to be full-blown by early next year. Right now, one of its best features, the ability to jump ahead to specific scenes, works with video from only a handful of sources including YouTube, MetaCafe, DailyMotion and Google (GOOG) Video. Videos from Hulu.com confusingly allow jumping ahead only from certain screens.

Additionally, I came across a couple of videos that were no longer available, though they were listed in search results. And a customizable VideoSurf home page for users with accounts on the site saves searches but not specific clips; VideoSurf plans to fix this next week by adding a favorites page where users can store and share favorite videos with others.

Still, I really grew to like VideoSurf’s clear way of displaying content that would be otherwise buried within videos. Rather than trying to guess a video’s contents by looking at a single representative image, VideoSurf’s filmstrip views showed me exactly what I’d be watching. In many cases, I viewed a video I might not have otherwise watched because its filmstrip showed shots of scenes that looked interesting.

On the left-hand side of the search-results page, VideoSurf users can narrow results according to Content Type, Categories and Video Sources to see just what they’re looking for — or, often more important, what they’re not looking for. Content Type, for example, includes slideshows, Web series, full television episodes and full movies; a search can include only videos in a particular category (say, slideshows) or exclude that category altogether by unmarking the box beside it.

Most search-results pages include tiled still images at the top representing the characters in the videos. By selecting one of these characters, users can refine search results to show only videos with that character. For example, I typed the title of a favorite television show, “Brothers and Sisters,” into the search box and saw the names and images of seven actors on the show at the top of the screen. I selected Sally Field and was redirected to results of videos featuring only the mother she plays on the show.

I used VideoSurf to search for Beyonce’s “Single Ladies” music video, and then changed the date parameters to find only videos posted this week. This retrieved a Saturday Night Live skit in which the pop singer spoofs her own video with help from three men in tights — including Justin Timberlake. While the SNL skit ran, a list of related videos appeared in a column on the right, including clips of J.T.’s past SNL skits.

Occasionally, annotations appear on videos, but these come from the source — not VideoSurf. If overlaid text appears on YouTube videos, it can be turned off using an icon in the bottom right of the YouTube screen. Video-sharing sites that use introductory pages such as pre-rolls before each video will still show those pages.

VideoSurf makes it easy to send specific clips of videos to friends. I did so by selecting a Share option and adjusting slide bars to trim the clip to start and end at scenes I preferred. Clips shared with friends via email are sent with the VideoSurf filmstrip, giving others the ability to also know what the video will include so that they, too, can discern whether or not they want to watch it.

Clips can be shared on social-networking sites like del.icio.us, MySpace and Facebook, though VideoSurf’s helpful filmstrip didn’t show up on these sites like it did in emails.

I also tested an add-on for the Mozilla Firefox browser called Greasemonkey that works with VideoSurf. When installed, this displays VideoSurf’s helpful filmstrip beneath search results from Google Video, YouTube, Yahoo (YHOO) or CBS.com (CBS). Once installed, filmstrips illustrating important scenes appear along with the normal text results for videos, and some of the filmstrips enable jumping ahead to specific scenes. This somewhat techie Greasemonkey extension can save people the extra step of making a separate visit to VideoSurf.com to watch a specific clip.

VideoSurf uses smart technology that can save people the aggravation of watching videos that aren’t what they appear to be. Since so much Web content now includes videos, a visual search tool that can better assess videos like VideoSurf is a good idea. When this site improves its now-flaky ability to jump ahead to specific scenes in videos, it will be even more valuable.

Edited by Walter S. Mossberg

• Email us at mossbergsolution@wsj.com. Find this and other columns and videos online free at the All Things Digital Web site: http://walt.allthingsd.com

Meanwhile, Microsoft‘s Zune announced via press release that new players in different capacities and colors would be available this week, along with a software update.

Despite their different approaches, these two announcements shared a notable common thread: integrated music discovery. Each company’s new software features ways for users to find automatically generated suggestions of music they might like, the way Pandora Media Inc.’s popular personalized music lists do. Of course, music discovery also encourages users to buy more.

Apple’s new iPods include a thinner Nano with an accelerometer, which senses the direction a screen is being held in a user’s hands and flips the display horizontally or vertically. These Nanos come in eight- or 16-gigabyte versions for $149 or $199 and are available in nine bright colors. A new, thinner iPod Touch with a built-in speaker was also unveiled, and it comes in eight-, 16- or 32-gigabyte versions for $229, $299 or $399.

Microsoft’s two new Zune players come in 16- and 120-gigabyte capacities for $200 and $250, respectively. All Zunes have built-in FM tuners and wireless capability, but the new upgrade allows users to buy and download songs they hear on their Zunes’ radios via Wi-Fi, when available.

While Apple’s iPod has been a snowballing success for the company, its companion iTunes software is no slouch. To date, 65 million iTunes store accounts with associated credit cards have been set up on Macs and Windows PCs. But iTunes has always been weak on music discovery and community.

Apple (AAPL) calls iTunes 8′s ability to make smart music recommendations the “Genius” feature. The tool can automatically do two things after analyzing a selected song from your music library. First, it can generate a playlist of songs from tunes you own. Second, it can generate a list of songs you don’t own but might want to buy from the iTunes store.

MicrosoftZune’s Mixview feature displays content related to an artist with an explanation of the relationship.

Microsoft’s Zune software discovers and recommends music using categories called “Picks,” “Channels” and “Mixview.” The last of the three, Mixview, generates recommendations for other musicians and albums, as well as other Zune users with whom you might like to connect. The suggestions are based on the artist of the song you’re playing and are displayed in an interactive graphic that explains how each is linked — for instance, if your artist was influenced by a band or if a member of Zune’s social network is a top listener of the artist you’re playing.

After using the music-discovery software from Apple and Microsoft (MSFT), I felt like Apple’s Genius tool still had a lot to learn, though the company says it will improve over time as more people start using it. Zune’s software had some similar issues, but it offered recommendations in a richer, more engaging manner, encouraging me to keep digging around and learn more about my music. Though I didn’t happen to have as much time to use Zune’s software as I did Apple’s Genius, I got more out of my Zune experience.

Apple offers much more content at its iTunes store than Zune. In all categories, iTunes takes the lead: in songs, 8.5 million songs to Zune’s 4 million; in music videos, 10,000 versus 8,500; in television episodes, 30,000 versus 3,000; and in audio and video podcasts, 125,000 versus 6,000.

To analyze and learn from your music, Apple scans the contents of your music library, which may raise privacy concerns for some people. Apple says that the information it collects is completely anonymous, and that it does not and will not associate this information on its servers with you or your account.

Some of my Genius playlists were well-crafted, including songs that meshed well with one another. But outliers cropped up, such as when “Should I Stay or Should I Go” by the Clash was stuck in the middle of a list generated from Coldplay’s gentler ballad, “Green Eyes.” Some songs won’t generate playlists if you don’t have enough related songs in your library; this happened to me with the pop hit “Apologize” by Timbaland, featuring OneRepublic.

Songs from artists whose content isn’t sold in iTunes, such as The Beatles, won’t generate Genius lists, because Genius makes suggestions based only on what it sells in its iTunes catalog. Genius will soon work with songs beyond those sold in iTunes.

Genius has a bigger problem. If you hit “Play” in iTunes, a Genius sidebar appears to offer content related to a selected song. But as play continues, Genius doesn’t continuously generate new recommendations; instead, it’s stuck on the very first song that was selected — which you might have chosen two hours ago. This means music discovery must be a manual process, rather than an as-you-listen convenience.

Genius playlists can be made on a computer or iPod and sync back and forth. I synced Genius lists on two iPod touches, but this didn’t work in one test with an iPhone. Apple said it couldn’t replicate this problem and hadn’t had other reports of it.

Zune software never scans your music collection. Instead, it knows only the number of times you played a song and how you may have rated a song.

Zune’s Mixview adds a real zing to the discovery process. It is a kaleidoscope-like graphic that appears on the screen when a song, artist, album or friend’s Zune Card is selected. The selected item is surrounded by eight to 10 floating squares filled with graphics and text, each holding a related song, album, artist or graphic representation of a Zune listener who’s considered an “expert” on the selection.

Each of these related squares includes a line of text explaining its relationship to the center item. For example, as I played “(I Can’t Get No) Satisfaction” by the Rolling Stones, Cyril Davies appeared as a related artist; an image of Arthur Alexander appeared as an influencer of the Stones; a Zune community member with the tag “Rreynoso” appeared as the top listener for the band and other Stones albums were displayed.

Mixview changes as you explore it. When one of its recommendations is selected, a new Mixview is created around that selection, encouraging discovery. But Mixview has the same problem as Apple’s Genius: When one song ends and another begins, the Mixview graphic doesn’t automatically change; you must manually start Mixview for a new song. Zune says it doesn’t want to change the graphic in case a user is in mid-exploration.

Unlike Genius, Mixview shows songs and artists beyond what Zune sells online. But the company says Mixview does “favor” Zune content, and Zune Picks are limited to items sold by Zune.

Zune Picks and Channels are more passive ways of discovering music: Picks are generated for you in Zune Marketplace according to your listening habits. Zune Channels bring collections of music to Zune devices and software, but these are useful only for Zune Pass members who pay $15 monthly.

Apple’s Genius is a helpful tool when it comes to quickly making a playlist, and its iTunes sidebar might reveal fresh related content. But the Zune software truly allows people to discover more about their own music and that of others.

Edited by Walter S. Mossberg

• Email us at mossbergsolution@wsj.com. Find this and other columns and videos online free at the All Things Digital Web site: http://walt.allthingsd.com