On the eve of Tuesday's launch of online music video service Vevo, company CEO Rio Caraeff sat with Billboard to discuss the year-long effort behind the creation of the initiative, his vision for the service's immediate future, how he plans to make it the No. 1 music service in North America.

What's the top thing on your mind now that Vevo is finally launching?
Right now I'm focused on our launch event, which is to create awareness and enthusiasm in the advertising community. So it's similar to a TV-style upfront, where we've assembled hundreds of top advertisers and agency folks and telling them why they should care about this. As I project forward beyond that, I could say we're focused we're on building out our sales force and getting to 35 people for North America, I could also say my head is on how to make the product better and investing in an around the video itself. But the honest answer is we don't know. We've been building this out for six months, but you really don't know anything until you get to market. Once you get to market you learn what your customers are looking for. The things you thought they'd be interested may not be. So people who say they know exactly what they want to do when they haven't even launched yet and have no operational credibility. I think that's wrong.

How has the concept of Vevo changed or evolved from the initial idea to execution?
There really hasn't been a ton of variation. We've learned a lot about what brands are looking for. We've signed up some 20 brands. Back in January, we were in a position where we said "this is what we think brands are looking for." When we actually got to market and spent some time with [them], we found we were partially right and partially wrong. So we adapted along the way. We have a better understanding of what the advertiser is looking for and not looking for.

For example?
More interactivity. More engagement. We were focused on how to create significant reach. Obviously that's still important. What's more important is that people are doing things and they're having a good experience with your brand as opposed to passively being exposed to it. So the concept of being more engaged and have more opportunity to do things and not just watch things. We realized that's the difference between-and I'm paraphrasing-a $10 CPM and a $20 CPM and the difference between having a good business and a great business.

We also realize that brands are looking for more custom opportunities. They want to be integrated in a much more custom way into the experience and the actual videos themselves. At the beginning part of the year, we were thinking whether we should get into original production and original programming. We've learned that if we want to have a big partnership with a major brand with significant time and dollars attached to it, we realized we have to offer them more value that just a bunch of media and a bunch of reach. So we've ramped up or original programming and our investments in new branded entertainment and content, more than I thought we would at this stage of our development.

Why did you decide to leave your gig running eLabs for this?
This job is about building something. Its about taking an idea and turning it into something real. It's about something tangible that people can use. For me, in order to drive more personal satisfaction, it was important that I build something. My prior gig was a great job, but it was more strategic with a lot of licensing and dealmaking and strategy. But I wasn't actually building anything.

So EMI got onboard at the 11th hour. What's the situation with Warner?
We're in discussions of course. There's no disagreement over the strategy, there's no problems with the business model. The issues are generally more corporate in nature. There's a great validation for the strategy and the need to drive a more healthy and sustainable model, the need to take more responsibility and accountability for your destiny, and to connect with fans directly. Everybody agrees that's the right thing to do. I think we will have all the music and all the programming we need to be successful. But will we have everybody in on day one, I think the answer is no.

How would you say Vevo's strategy differs from WMG's YouTube partnership strategy?
I don't think Warner's approach is wrong. I just think their priorities are different than Vevo's priorities. I think this business works at scale, with meaningful amounts of revenue, when you have the power of aggregation; when you have the ability to have everything all in one place and that aggregation is massively distributed. A very large percentage of the ad dollars go to a very small amount of companies. If you're not one of those companies you're not going to qualify for the big national campaigns and the big-dollar partnerships. Our objective is to be one of the top 20 sites in the world. Our objective is to be the No. 1 music service in North America. Our objective is to drive over 500 million streams per month [and] reach 40-50 million people a month.

I think Warner's strategy is to drive people to their artists' Web sites, where they can then maximize their 360 deals. There's nothing wrong with that; it's just a different approach from what we're focused on.

What's the status of indie labels/artists?
We are very well-covered. We have all of the major independent labels and aggregators.

What's the pitch to advertisers here?
We're offering access to the passion of the fan and the connection between the fan and the artist. It's that experience that is hard for them to get elsewhere at significant scale. So it's combination of two things. One is media, which is a combination of display, limited preroll, overlays. And then there's custom integration into new programming, into our playlisting tools and lyrics features, into new shows and new concepts not available elsewhere.

Can today's struggling ad-funded streaming music services learn anything from Vevo's approach?
I think there's a difference in the format, and that's a material difference in the business model and user experience. So that's a big difference worth noting. When I'm listening to an on-demand audio stream, I may not be looking at it or engaged in it and that's less interesting to advertisers. It works on terrestrial radio, but the creative of what is the ad unit that brands can really wrap into for on-demand audio streaming I don't think really exists yet. Certainly not at scale to build a real business. We're focusing on video because we see that as the fastest-growing category on the Internet and the category with which there was the most opportunity to improve the experience for both the user and the brand.

But all these business are all about trying to create a healthy and diversified model in the long run. No one business wants to be dependent on advertising or downloads or any one particular model. Whenever you have only one business model, you're prone for disruption. We plan on developing other business models based on other music experiences once we've done a good job building a large network of customers under the ad model.