Peter Kafka

Recent Posts by Peter Kafka

Vevo’s YouTube Deal Expires in Three Days. But the “Hulu for Music Videos” Site Won’t Go Dark.

Vevo, the digital music video service, and Google, which powers and distributes Vevo’s videos on its YouTube site, have a distribution deal that expires on Sunday.

And the two sides won’t have a new deal in place by then, according to people familiar with negotiations.

But that doesn’t mean Vevo’s videos will disappear from YouTube, or that will go dark. The existing contract has what amounts to a 120-day extension, which essentially means that the real deadline for Vevo and Google won’t roll around for another four months.

That said, people familiar with the negotiations say the two sides are in “intense” discussions, with the hopes of wrapping something up much sooner than that.

That seems likely, given that the two sides don’t really have a choice: Vevo needs distribution, and Google needs Vevo’s content.

Earlier this year, that outcome wasn’t as clear. Press reports floated the notion that Vevo might try to work a deal with Facebook, the only Web player big enough to give Google a run for its money. But those discussions didn’t lead anywhere, sources said.

No comment from Vevo. Here’s one from a YouTube rep: “While we don’t comment on individual negotiations, we always hope to renew our relationships with valuable partners.”

Vevo is owned in part by Universal Music Group and Sony Music, the industry’s two biggest labels. It’s supposed to be a “Hulu for Music Videos” — a joint venture that gives content owners a digital hub of their own.

When Vevo launched three years ago, it solved a problem for Google. It allowed YouTube to keep generating views from the videos — a crucial chunk of content for the site — without having to fork out licensing fees every time someone watched a clip. Instead, the two sides share advertising revenue.

Since then, Vevo has claimed that the new structure has worked well. Earlier this year, Vevo CEO Rio Caraeff said the company had generated $150 million in annual sales.

But while Caraeff has worked hard to get eyeballs to his videos without YouTube’s help, via outlets like iPhone and Xbox apps, the company is still dependent on Google — in the U.S., YouTube accounts for two-thirds of Vevo’s views.

Google, meanwhile, is less dependent on music videos than it was three years ago, because it has worked hard to bring in other “professional” content of its own.

But losing the clips would still be a huge problem for the site. Check out the list of YouTube’s six most popular videos of all time, and count the number of them supplied by Vevo. Or I can save you some time: Vevo accounts for five of them.

Here, for better or worse, is one:


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