YouTube Confirms Stake in Vevo Music-Video Venture

Google site’s investment in Vevo reported to be $40 million to $50 million

Google’s YouTube confirmed reports that it has made an investment in Vevo, the Internet music-video service that is YouTube’s biggest content partner.

New York-based Vevo is majority owned by Sony Music Entertainment and Universal Music Group, with a minority stake held by Abu Dhabi Media.

A Google rep said in an emailed statement, “We made an investment in Vevo. We are excited by their future prospects and to provide YouTube users with the best possible music experience.” Vevo confirmed YouTube had taken an investment but declined to provide further comment.

YouTube owns approximately 7% of Vevo with an investment of $40 million to $50 million, according to a Billboard report.

Vevo generates about 4 billion views monthly via its 15,000 YouTube channels, which are available in more than 200 countries. Vevo’s deal with YouTube expired in April with the key sticking point around the ad-revenue sharing terms, according to the Billboard report. Industry sources have confirmed that Vevo has a more favorable revshare split than YouTube’s standard deal for content partners, under which YouTube takes 45% of ad dollars.

However, increasingly, more of Vevo’s videos are watched on other distribution platforms including Vevo’s mobile app, with up to 35% of Vevo’s North American views now occurring off YouTube, according to the company.

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The company has licensing deals with labels including UMG, Sony Music Entertainment, EMI Music, CBS Interactive Music Group, Hollywood Records and Walt Disney Records, among others. Vevo does not have a deal with Warner Music Group.

Through Vevo.com and its mobile and connected TV apps, the music service is available in the U.S., Australia, Brazil, Canada, France, Ireland, Italy, The Netherlands, New Zealand, Poland, Spain and the U.K.

The company also powers music videos on artist pages across Facebook and syndicates to dozens of online sites, including AOL, BET, CBS Interactive Music Group, Disney Interactive, Fuse.tv, Univision, Viacom Media Networks, Wenner Media and Yahoo Music.

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