Vevo poised for subscription move after first ever acquisition

Don’t be surprised if Vevo doesn’t remain completely free for much longer.

The video service, co-owned by Sony Music, Universal Music, Google and Abu Dhabi Media, has made its first ever acquisition: ShowYou, an online video platform which recently added tools to enable viewers to pay subscriptions or one-off transactions.

Vevo is currently an entirely free music streaming platform – a model which is fast becoming the enemy of major labels, especially Universal.

Spotify offers both free and premium tiers, with Universal believed to be pushing Daniel Ek to lock some content for paying fans only.

Meanwhile, SoundCloud has announced plans to launch a subscription tier this year. And even the majors’ biggest ‘frenemy’ in the digital space, YouTube, has recently launched a subscription tier to its offering with YouTube Red.

MBW understands that Vevo is keen to capitalise on its relationships with artists and managers to create more ‘premium’ content for their individual fanbases.

The question now is if, and how much, Vevo will charge for such footage.

The video site, which boasts 12 billion monthly views globally, has seen its financial model famously challenged in the past few years.

Last year, Vevo was reported to be on the block for a sale, 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.

The firm is yet to strike a licensing deal with Warner Music Group, but negotiations were believed to be revived in August after the appointment of former BBC exec Erik Huggers as CEO.

“With the acquisition of Showyou we take a significant step forward in re-positioning Vevo as a best-in-class product-driven organization,” said Huggers.

“Showyou allows us to accelerate our pace of innovation with the ability to rapidly add new and differentiated features as we iterate our products in 2016 and beyond.”

Vevo will be thinking long and hard about its strategy for any subscription move.

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.

Added Mark Hall, Founder and President, Showyou:“With the streaming media segment still very much in its infancy I believe we have a tremendous leadership opportunity in front of us as we combine forces and become part of Vevo.

“Showyou’s capabilities, combined with the breadth and scale of the Vevo platform, will enable us to create an exciting new class of products that should delight both music fans and artists.”Music Business Worldwide

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