Vevo founder and current CEO of Sony Music Entertainment, Doug Morris, is frustrated over YouTube’s high revenue share rate. So frustrated that he has threatened to withdraw Vevo from YouTube. The LA Times has learned that Vevo is considering taking its business to a competing video platform if Google does not comply and lower its cut of advertising revenue.
The Vevo music video channel is the most-viewed YouTube partner property to date, according to comScore’s latest (May 2012) YouTube partner online video ranking. The channel was also second most engaging YouTube property with viewers spending approximately 55.1 minutes per viewer on Vevo. It’s a channel that has remained profitable for both YouTube and Vevo thanks to its deal with Google that enabled Vevo to set its own ad rate, higher than what YouTube was charging its advertisers. With both factors combined, Google would lose what could easily be its top revenue generating channel. It’s a relationship that’s highly reminiscent of Zynga, which first lived on Facebook and generated 15 percent of Facebook’s total revenue in Q1 2012.
“YouTube has been good partners. They’re just extracting too much money for the enterprise to work properly. The videos are expensive to produce. And there are many mouths to feed on our end. You have to pay the artist, the record companies, the publishers,” Morris told the L.A. Times.
According to a LA Times source who is familiar with the matter, Vevo has been weighing its options and among the properties eager to take away Vevo from Google are Facebook, Microsoft, Apple, and Amazon. “They stand a chance of losing the deal,” Morris added.
Read more: http://www.digitaltrends.com/social-media/vevo-may-leave-youtube/#ixzz2GpbQ0Chq
