Will Vevo, the music video joint venture, end the industry's dirge?

A splashy music-industry event in New York City on Tuesday night began, inevitably, with a speech by Bono. American Idol runner-up Adam Lambert and pop artiste Lady GaGa closed the gala out. In between, passionate testimonials from Google (GOOG) CEO Eric Schmidt and Universal Music Group CEO Doug Morris (pictured, with Bono), extolling the launch of Vevo: the "premium music video and entertainment service" -- so the industry hopes.
Vevo -- a joint venture between Google, the Vivendi (VIVDY)-owned Universal Music Group, Sony Music (SNE) and the Abu Dhabi Media Co. -- seeks to serve as a clearinghouse for music videos from these labels and behind-the-scenes content, lyrics, bios and other video offerings from EMI Music and a number of independent labels. (It aims to feature an estimated 30,000 promotional clips by the end of 2009.) If that all sounds like Hulu, well, that's no accident; Vevo's goal is to position itself as Hulu's music-industry analogue.

A New Platform

During his time onstage, Twitter-happy troubadour John Mayer noted that artists would be given free reign over their channels. Google's YouTube will host and stream the videos on Vevo, which in turn will syndicate videos to such partners as official artist Web sites, CBS (CBS), and AOL (AOL), parent of DailyFinance. Bloggers will be able to embed Vevo's clips, which they couldn't with videos posted by Universal and Sony and their subsidiaries.

The Vevo brand may prove more valuable to advertisers and industry execs than consumers, as a tool to aggregate artists from across the music-business map under a single ad-friendly brand. ("It's our platform," Morris said of the site, garnering applause from the industry-heavy crowd.)

Sponsors can ply their wares on Vevo with banner ads and video prerolls, and the partner companies will share in those spots' revenue. Vevo's advertisers so far include brands that you used to see in those endangered exotic species we used to call "music magazines" -- SABMiller's (SBMRY) Peroni beer, WIlliam Grant & Sons USA'sStolichnaya vodka -- as well as brands more suited to network TV -- Unilever's (UN) Dove soap, AT&T (T). Revenue expectations are high: Vevo CEO Rio Caraeff told Billboard before Vevo's launch that his company hoped to breach the difference between "a $10 CPM" -- cost per thousand impressions -- "and a $20 CPM."

Opening-Day Hiccups

And then there are the artists. Sony Music Entertainment CEO Rolf Schmidt-Holtz said Vevo would give artists visibility, although the site will be broadcasting to its audience in a very different way than MTV did during its glory days. Back in the "I Want My MTV" era, viewers watched whichever videos the network showed, while Vevo will be swarmed by self-directed users looking for the content they want to consume (and, more often than not, little else). A few artists will be featured prominently on the Vevo homepage, but all others will scramble for tiny fragments of audience attention -- a model that has already hobbled the mega-pop-star.

So how is Vevo for the end user? Well, it's been running a bit slow in its first 24 hours, with error messages galore and confusing navigation. Vevo's spin: the site is a victim of its own success. "The traffiic to VEVO.com has exceeded our expectations by several orders of magnitude! Bear with us as we try to smooth everything out," read a Vevo-publicity Tweet on Wednesday afternoon. (Better hurry! Today's user tends to be a bit impatient with such hiccups.)

Changing Users' Habits

Ideally, the Vevo experience would be more seamlessly integrated with YouTube and Google's music-discovery product. Right now, searching YouTube for videos by John Mayer yields a results page that takes users to both lower-quality uploads from the old days and higher-quality clips on Vevo.

That could be a result of the need for a smooth transition. Pulling clips by Mayer and Lady GaGa from YouTube in order to bolster another site's launch would have resulted in thousands of angry Tweets, too. But making the transition from searching YouTube and Google to experiencing Vevo should be a top priority for Vevo's engineers as the site gets back up to speed -- because it'll take more than Bono and Lady Gaga to change users' ingrained browsing habits.
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