Vevo Seeking Half-Billion in Capital to Fund Expansion, Original Programming
The company, majority-owned by Universal Music Group, now has the cash it needs to grow beyond "music videos."
Vevo has secured $500 million in capital financing from Goldman Sachs, a source with knowledge of the deal has confirmed to Billboard. News of the funding was first reported by the Financial Times.
The company -- currently available in 14 markets and with offices in Los Angeles, San Francisco, Chicago, Portland, New York, Berlin and London -- will spend its half-billion on aggressive international expansion, the development of (not cheap) original programming and the introduction of a subscription service around those originals. The company now embarks on the path it arguably should have been on since its inception; owning the music video -- and videos about music -- sector of the global content industry.
The funding and word of it comes on the heels of both the signing of a long-rumored deal with Warner Music Group, the platform's last major label holdout, earlier this month, and a "reboot" in July hinted at by CEO Erik Huggers since he began with the company in April, 2015. The announcements from that July 14 unveiling included original programming, a mobile-focused redesign and more robust music discovery.
Vevo now enters somewhat of an all-or-nothing phase, and into an extremely competitive market. If Vevo is unable to grab a significant number of eyeballs around the world, in a reasonable amount of time, its reason for existence will be difficult to justify.
"It's ever more difficult to cut through the clutter and to get audiences to pay attention," Huggers told Billboard the day he started at the company -- and that was, at least on the internet, a long time ago.
Correction, 2:12 p.m., Aug. 19: This article originally stated that Vevo had secured the $500 million in capital from Goldman Sachs. In fact, Vevo is still seeking to secure these funds. Billboard regrets the error.