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Google (YouTube) Partner with Universal Music Group for Vevo

I’m sure the majority of our readers have already heard about the new music video partnership between Universal Music Group and Google (Youtube). I thought I would just quickly recap and add in the press release and then discuss why this is a great idea.

The full press release is below for you to digest, and naturally we’ll have more analysis next week.

UNIVERSAL MUSIC GROUP AND YOUTUBE TO LAUNCH REVOLUTIONARY PREMIUM MUSIC AND VIDEO SERVICE

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

NEW YORK, NY and SAN BRUNO, CA, 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.

Google has been struggling for a long time about how to actually monetize YouTube affective. Most advertisers aren’t happy about their ads being shown next to user generated content, while at the same time YouTube costs are skyrocketing and they cant afford to keep going the way they are.

Thus, Google has acknowledged that it is much easier to sell advertising next to controlled quality content, and that is why they have now partnered with Universal Music Group and is about to launch this new music video service. A music video portal is much needed on the internet and Universal don’t have the technology skills needed, but they do have the content, so that is where Google comes in. Additionally, Google is an advertising company, that is what they do and they do it very well.

The verdict is that Vevo is a great idea and it has been much needed for some time now. Hosting and bandwidth costs associated with Universal on YouTube will now be moved over to Vevo and because advertising revenues are going to be much higher, it will be more efficient for Google to offset costs with these videos. Revenues will increase and bandwidth will be moved away from YouTube and into Vevo, but this isn’t going to help monetize YouTube videos more effectively, it is just a diversification tactic.

Just Hear It: New Music Streaming Search Engine That Claims To Be Legal

In the last week or so we have been really taking a keen focus on music streaming service and even posted a specific review about MixTurtle. Today we have come across yet another music streaming service that might be worth a look. This new streaming service is called Just Hear It. Just Hear It has been created by two college students Nicolae Ivanescu and Cosmin Panait.

Just Hear It is very similar to MixTurtle, Seeqpod and Songza. It lets the user search for tracks that are online and add them to a playlist. Just Hear It claims to be completely legal, following DMCA guidelines, and paying royalties to all of the major performing-rights organizations, like ASCAP, BMI, and SESAC. In the future, Just Hear It aims to negotiate licenses to share revenue with labels.

After playing around with the site it still seems to have the same issues as Seeqpod and Songza, every now and then you will find the track that you want to listen to, but it simply wont play or the file is corrupted or incomplete. Im not really too sure if there is anything more annoying than setting up your playlist and half the songs playing.

However, because Just Hear It claims to be completely legal, I’m very curious to see how this business develops. They need to have a very strong business model and I’m guessing that will be based on advertising revenues.