Vevo Launches 24-Hour Music Network for Web, Pay TV

Online music video service Vevo has launched an online 24-hour music network that it plans to also bring to pay TV by year's end.

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The network, Vevo TV, will compete with such music-related channels as Viacom's MTV and VH1 and Madison Square Garden's Fuse. It will look to make money off advertising revenue and subscriber fees just like other cable networks.

Vevo TV's programming will consist of blocks of high-definition music videos, concerts and original programs.

“There is still a time and place when you just want to have something programmed,” CEO Rio Caraeff told Bloomberg News. “You don’t want to lean forward every three minutes to pick another video, you just want it to play.”

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Asked if Vevo was looking to become the new MTV or the MTV of this generation, Caraeff told the Financial Times: "I can only hope and aspire to that, but by the nature of it it'll be different. Part of what we're trying to achieve is that element of nostalgia, but 70 percent of our audience is under 34."

Vevo TV became available online for Vevo's U.S. and Canadian users on Tuesday via the company's website, mobile applications and video-game consoles. It will not be available on current distribution partner YouTube, the video site owned by Google.

“We are trying to differentiate our brand and service from YouTube," Caraeff said. "We’re using YouTube as marketing for the channel, not distribution."

The CEO didn't provide financial details, but described the network's launch costs as minimal. He said the firm has hired six employees for it so far.

Vevo TV will also use video jockeys, or VJs, like the ones MTV made household names in its early days. The digital channel is expected to also get U.K., continental European and other international versions over time.

The TV network push comes as Vevo has been looking to raise money. YouTube is believed to be close to a $50 million investment, which would value Vevo at around $650 million, according to Bloomberg.

Meanwhile, a long-gestating new distribution deal with YouTube is also "nearing completion," Caraeff told Bloomberg without providing further details.

Vevo is a joint venture of Vivendi’s Universal Music Group and Sony Corp. Abu Dhabi Media is also a shareholder.

Caraeff said carriage talks with pay-TV operators for Vevo TV have started, with the goal of getting distribution on cable, satellite TV and telecom video services starting later this year. He didn't say which ones are most likely to carry the new channel and when.

MTV gets an estimated 41 cents per month per subscriber from pay-TV providers, according to SNL Kagan. VH1 gets paid about 19 cents, with the less widely available Fuse collecting 6 cents, according to the SNL Kagan estimates.

Vevo TV’s first advertising partners include movie studios, State Farm Life Insurance and McDonald’s Corp., according to Bloomberg. Commercials are scheduled to run after every three or four music videos, with ad rates equal to the ads on Vevo's core on-demand service, Caraeff said.

Vevo TV uses dynamic ad insertion, meaning viewers are shown commercials based on their interests.

Email: Georg.Szalai@thr.com
Twitter: @georgszalai