Vevo Faces an Uncertain Future With the Departure of CEO Rio Caraeff and a Failed Sale
Rio Caraeff's departure as CEO of Vevo at the end of 2014 -- officially announced Nov. 17 after an internal memo had leaked -- leaves the music-video service at a crossroads. After Caraeff failed to sell the company at a reported $1 billion this summer (Yahoo, Guggenheim and DreamWorks SKG were among early interested bidders), Vevo's identity remains fairly faceless beyond core stakeholders Universal Music Group (headed by Lucian Grainge) and Sony Music Entertainment (run by Doug Morris).
Though the site has attracted marquee advertisers for branded web series, the majority of Vevo's 41.5 million monthly viewers (according to comScore's September desktop rankings) arrive at the site through organic search for artists and songs. While a search for a new CEO gets underway, CFO Alan Price will take the interim reins after Caraeff's departure.
Vevo's evolution may yet be determined by the impending launch of YouTube's Music Key subscription service (a beta version rolled out Nov. 18). Newly inked deals will see labels and publishers seeking higher subscription fees from Music Key's premium tier.
In fact, Taylor Swift's battle with Spotify may be a harbinger of even tougher times for Vevo. Her "Shake It Off" video accumulated more than 284 million views in its first three months on Vevo, but the song recently leapt back to No. 1 on the strength of streams tallied from a fan-created dance video. Those streams aren't monetized by Vevo, but rather YouTube's Content ID system, which has paid out more than $1 billion to copyright holders since 2007.
As a result, Swift's label, Big Machine, is among the powerful Vevo partners already in talks with third-party companies exploring music-video representation outside of Vevo, according to multiple sources, a defection that would only inspire other imprints to follow suit. A Big Machine rep declined to comment.