 "YouTube renews vows with Vevo, invests in the company")
YouTube announced on Tuesday that it has renewed its agreement with video distributor Vevo in order to avoid letting it be acquired by arch rivals Facebook. Google will be investing in the joint-venture owned by Universal Music, Sony Music Entertainment and Abu Dhabi Media Group as part of the deal with Vevo.
Billboard has confirmed in a report that the investment will be worth $40 million and $50 million. This will give Google a stake of about 7 percent in Vevo. The investment will also ensure that Vevo’s videos don’t migrate to rivals like Facebook.
Deal renewed with YouTube
“We made an investment in Vevo,” YouTube said in a statement. “We are excited by their future prospects and to provide YouTube users with the best possible music experience.”
The Monthly Media Matrix report by comScore reveals that Vevo alone accounted for 50.2 million unique views on YouTube. So when the contract with Vevo ended in April, it only made sense for YouTube to renew its deal with the channel. The deal was on sticky grounds while Vevo operated on a temporary license post April. The issue that was holding the renewal back was the split of ad revenue between the two companies.
This multi-year renewal will see a more stable partnership between Vevo and Google, ensuring a better viewership for channels on YouTube. Vevo is now planning to use the money to work on expanding its international presence as well as trying to create original music-related content to supplement its library that contains videos from the likes of Sony and Universal. It does not contain videos from Warner Music Group since the company operates rival YouTube music channels.
The terms of the deal and the timing of the agreement were not disclosed even as it was rumoured that it took place a few weeks ago but was only announced now.
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