Vevo’s revenues rose 30% in 2017 to hit $650m as the video streaming firm broke even for the first time after eight years in business.
The rise is down to a growing digital advertising business, according to an FT report.
After years of posting annual losses, Vevo says it will be profitable by early 2018.
Advertisers are said to be moving business from YouTube – a service with which Vevo is understood to be currently re-negotiating its exclusive partnership.
Music videos on Vevo now attract 25bn views a month — up 30% from the last reported figure of 19bn.
In 2016, Vevo, which is majority owned by Universal Music Group, turned over $500m.
For comparison, Spotify revenues hit €2.93bn (US $3.3bn) in 2016.
The 2017 rise in revenue happened under the watch of former CEO Erik Huggers, who departed at the end of last year.
Alan Price has been named interim CEO, adding to his current role as Chief Financial Officer.
During his two years in post, Huggers oversaw the planned launch of a subscription service, which never materialized and has since been scrapped.
YouTube, on the other hand, is said to be having another crack at launching a music subscription service after failing to attract significant subscriber numbers with YouTube Red.
Codenamed ‘Remix,’ the platform will reportedly bring together an on-demand Spotify-like paid audio service with video clips.
Vevo is instead focusing efforts on luring broadcast advertisers to digital in order to build a profitable ad-funded online video business.
In an interview in late 2016, Erik Huggers told MBW: “Historically it’s always been the case that ad dollars follow the eyeballs, but there’s always been a bit of a lag.
“For the first time in a long time we’re starting to see the shift of those ad dollars [to digital video].
“It’s still not to the tune of the billions and billions you see spent on TV, but I think it’s going to start accelerating very rapidly as brands figure out that those audiences are with players like Vevo.”
In mature markets such as the US and Northern Europe, Vevo is believed to sell ad space to brands at around $25 CPM – significantly higher than YouTube’s average equivalent.
Around half of this money then makes its way back to music rights-holders.
The five most-watched music videos on Vevo last year were all Spanish language tracks.
Released in January, global hit ‘Despacito’ by Luis Fonsi took first place with the video clocking up 4.3bn views.
Shakira’s ‘Chantaje’ ft. Maluma took second place with 1.6bn, followed by ‘Mi Gente’ by J Balvin and Willy William with 1.3bn.
‘Felices los 4’ by Maluma was fourth with 1.1bn and ‘Reggaeton Lento’ by CNCO took fifth place with 1bn.Music Business Worldwide