Sony boss wants better deal from Google over VEVO

By | Published on Thursday 12 July 2012


The boss of Sony Music, Doug Morris, has told the LA Times that Google should lower the rates it charges VEVO for handling the technical side of the music video site’s content delivery.

As much previously reported, VEVO is the music video service owned by Universal Music and Sony Music, among others. Although it is essentially a channel on Google’s YouTube platform, VEVO turned the YouTube model on its head – rather than the web firm selling advertising around official music videos and paying the labels a cut, VEVO sells the advertising and pays YouTube a cut.

VEVO charges higher rates to advertisers, and has more overt ad spots on its pages, meaning more money is generated for the actual rights owners (so shareholders Universal and Sony, but all the other labels and publishers whose content features too) even after Google is paid its technology fee.

But nevertheless, Morris says, Google’s rates are currently too high, given just how much traffic VEVO’s content creates for YouTube (traffic which might then move on to YouTube content not hosted by VEVO), and given that many of the web giant’s rivals are currently courting the digital music firm about taking Google’s place.

Speaking to the LA Times, Morris said: “Google is charging us a lot of money to put our videos on their platform, and we would like them to reduce their fees. If not, there are at least three other companies who want to take our videos”.

Morris has no day-to-day control over VEVO, even though his company is a shareholder and content provider, though his opinions are important, not least because – in his previous job as top man at Universal – it was his initiative that led to the creation of the label-owned video platform in the first place.

There have been many rumours in recent months that VEVO was considering an alliance with one of Google’s rivals as the two companies’ current partnership comes up for renewal. That said, Google doesn’t only bring technology to the table – while VEVO might deliver YouTube traffic, it actually works the other way round much more frequently, the Google platform being the go-to place for video content online (plus, of course, YouTube videos perform unsurprisingly well in Google searches).

So, while VEVO has been busy trying to build its own home page as a destination for music fans, in reality, for the time being at least, traffic that arrives via YouTube is incredibly important, making it unlikely that Google would or could be cut out of the equation at this stage. Though alternative and concurrent alliances can be expected with other web firms that provide access to additional audiences – Facebook in particular – which might strengthen VEVO’s hand for future YouTube negotiations.

READ MORE ABOUT: | | | | |