“You hear throughout the industry about the move towards subscription, a more premium product. It’s very much something we’re interested in and working towards.”
The words of Vevo CEO Erik Huggers last night at Re/Code’s Code Media conference in California – the first time that the video service has confirmed it’s launching a paid-for tier.
The first signal that Vevo, co-owned by Universal Music, Sony Music, Google and Abu Dhabi Media, was moving into the world of subscription came in December, when it announced the acquisition of monetized online video platform ShowYou.
Interviewed on stage by Re/Code’s Peter Kafka, Huggers was light on details of what Vevo’s subscription offering would comprise, but he did confirm that the service wasn’t going pay-only.
“We believe in a dual revenue stream,” he said, commenting that when it comes to ad-supported, “We’ve got a phenomenal sales force who knocked it out of the park in 2015, the biggest year in Vevo history. We want to build on that strength. The second piece would be a pay model. ”
However, the killer line from Huggers echoed the words of Lucian Grainge at Code Media last year.
“We think just having an ad-supported model is not sustainable in the long run.”
Erik Huggers, Vevo (pictured above)
“There will be free Vevo, yes,” he said. “But we think just having an ad-supported model is not sustainable in the long run.”
Vevo, which boasts 18 billion monthly views globally, has seen its financial model challenged in the past few years.
It was reported to be on the block for a sale in 2014, but failed to find a buyer – ultimately because the amount it was paying in licensing fees to co-owners Sony and Universal didn’t make sense for potential acquirers.
Vevo is yet to strike a licensing deal with Warner Music Group, but Huggers, appointed CEO of the company in August last year, isn’t giving up.
According to Comscore stats, Vevo contributes 38% of YouTube’s monthly traffic – which famously tops over a billion unique users.
A YouTube rival offering windowed content to customers who paid just $2.99 a month, Vessel, launched in March and was trumpeted by Universal Music Group CEO Lucian Grainge.
However, MBW understands that the major labels have been disappointed by both consumer take-up and financial return from the startup thus far.
Vevo launched its new mobile app for Android and native tvOS app for Apple TV earlier this month.
Music Business Worldwide