When Vevo launched its ad-supported music video platform two years ago, streaming was sluggish for a few days. The kinks were quickly worked out, and Vevo has since become the best example of how advertising plays into the future of the music business.
Globally, the company projects it will stream 3.7 billion video views per month projected for December, up from 340 million per month. The result has been $100 million paid to content owners over two years, "a meaningful amount of revenue" in terms of views, CEO Rio Caraeff tells Billboard.biz.
Since its December 2009 launch, Vevo has picked up just under 600 advertisers ranging from American Express to Vitamin Water. Caraeff says all advertisements are "broadcast-level CPMs, generally in excess of $25."
A partnership between Universal Music Group and Sony Music, with additional funding by Abu Dhabi Media Company, Vevo has grown to around 120 to 130 employees located mostly in New York, with an estimated 25 in London and 20 in Los Angeles. It also has offices in San Francisco and Detroit.
In 2012, it plans to invest in and grow original programming, become more global ("at least six more countries next year," says Caraeff) and expand Vevo in the living room. In October it announced it will launch on Microsoft's Xbox 360, although no details have yet been released.
Vevo's U.S. numbers show American music fans have a large appetite for music videos. The service streamed 872 million videos in November, up 400 percent from December 2009, by 55.4 million unique visitors, more than double from two years ago.
U.S. viewers are becoming more engaged as they increase in number. The average U.S. viewer watched 15.7 videos per month in December, according to comScore. Visits tripled from 104 million to 305 million each month. Minutes spent viewing videos have doubled over two years, from 31.5 per month to 77 per month.
Mobile is a key growth driver. The company says over 13 million devices are running the Vevo mobile app. In October, that audience averaged 55 minutes per month on Vevo apps and consumed about 200 million video streams, up 700 percent since January, according to comScore. "It's the fastest-growing part of the platform," says Caraeff.
Vevo's next distribution frontier is the living room. Caraeff says 2 to 3 million of Vevo's install base already actively streams to Apple TV. The announced integration with Xbox 360 will bring Vevo into millions more homes.
The living room could be a good fit for Vevo's ambitions for long-form content. Caraeff says the company has "a bunch of pilots" in development - original programming rooted in music -it will announce in the first quarter of 2012. Vevo will continue to stream live events and concerts, such as its American Express-sponsored live broadcasts and performances from "Late Night with David Letterman." "They're not tremendously profitable but a few times a year it makes sense to do them," he says.