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Vevo has paid out $100 million to artists and labels

December 19, 2011 |  9:01 pm

VEVO

Vevo, the online music video service that turns 2 this month, has paid out more than $100 million in royalties since December 2009 to songwriters, recording artists, record labels and other music copyright holders.

That's a princely sum considering that music videos, even in their MTV heyday in the 1980s, were given away for free to promote record sales.

What's more, viewers can watch tens of thousands of music videos for free, as often as they wish, on a Web browser, in Facebook or on any number of smartphones and tablets. Instead of charging a fee, Vevo collects its revenue from ads that play alongside the music videos. 

CARAEFF_RIO_VEVO"We’re growing revenue in a way that doesn’t try to get people to pay for something they have never paid for before," said Rio Caraeff, chief executive of the New York-based online music service. While Vevo is not yet profitable, Caraeff (right) projects that it will be so sometime next year as its audience continues to grow, driving higher ad revenue.

More than 63 million unique visitors played a Vevo video in November, according to ComScore, more than double from just over 27 million in December 2009, when Caraeff combined the online music videos from Universal Music Group and Sony Music Entertainment into a single service jointly owned by the two record companies.

Vevo's visitors are also more engaged, each playing nearly 15 videos on average in November compared with fewer than 10 videos in January. They're also spending more time with the service — more than an hour on average per viewer, playing not just music videos but also original shows produced by Vevo, up from little more than half an hour two years ago.

The money Vevo pays out in royalties comes at a welcome time — when bands and labels alike are having to scrape together what pennies they can in the face of plummeting CD sales.

Caraeff plans on increasing the pace in 2012 with big expansion plans abroad to more countries in Europe and South America, and in Australia and New Zealand, for example. In October, the company announced a deal with Microsoft Corp. to distribute Vevo's videos to Xbox Live subscribers in the near future. It's also pushing other avenues to get its videos streamed to living room TVs as well — not just computers and mobile devices.

"The question we wanted to answer when we began two years ago was whether the audience for music videos could be monetized in a way that can sustain a business," Caraeff said. "We’ve seen the answer is yes."

RELATED: 

Rio Caraeff: The king of online music videos

Vevo rolls out Facebook app for bands

— Alex Pham

Twitter/ @AlexPham

Photos courtesy of Vevo. 

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