• by December 14, 2009

With last week's launch of the new VEVO Music Platform from Google/YouTube and Universal Music Group, significant questions and opportunities arise whose answers could be potentially game-changing, both for music video content and for the music labels as a whole. It also raises some fundamental questions for online publishers who have long relied on the labels to provide music video content to keep younger demos coming back.

Although the VEVO user experience delivered in the first couple of days post launch was sub-par at best, one cannot argue that the VEVO platform has the potential to finally begin to monetize the thousands of music videos that, until now, have been parked in the YouTube world of video-snacking user generated content. In theory, a premium tier designed exclusively for high production value music video content makes complete sense. High-quality music video content gets extracted from UGC and gets positioned to command a higher CPM for ad insertion.

Labels, in turn, finally get some rev share that they can use while driving CD sales to amortize the high cost of ego-driven music video productions. VEVO could prove to finally provide the labels some much-missed ancilliary revenue lost to piracy generated from online music video.

Someone was quoted as suggesting $35 CPMs? WOW! Probably more like $15 from where I sit. But hey, what do I know, I'm just a creative guy

What's to be lauded here is the long awaited "cooportunity" among labels to aggregate content in a manner that previous ventures like Spiral Frog and others failed to make happen to make their business models work. LaLa gave us hopeful quick glimpse at what could have been some real competition for iTunes, until, of course, they were swallowed by Apple last week. One of the most significant questions VEVO represents for horizontal and genre-based music portals like YAHOO Music, MySpace Music even BET.com and CMT.com, is, what will their own access to music video looks like down the road? If VEVO takes off, will the labels claw back the coveted music video libraries the online portals have been so dependent on? Or will they begin charging online publishers more for it? Will new release/breaking videos and "buzzworthy" new products be held back to command premium VEVO CPMs, or go to the highest "exclusive" bidder from the online publishing world? All interesting questions that remain to be answered --but all of which could conceivably spell more revenue for the labels (at last!).

I guess it depends on the who and the where it's playing. And exactly how much rev share does that leave on the table.

What we advertiser folk do know is, music videos (particularly new releases) are played again and again by rabid fans. And as advertisers continually look for both reach and engagement in the 12+-35 demo categories, we could potentially see some real inflection in the music video revenue model here (at least that's what VEVO is hoping).

I haven't seen the metrics/measurement side of what they deliver, but as ad-sponsored video models continue to try to drive profits more in line with their scale, music video engagement could hold tremendous potential if we ever get to a true time-spent pricing model. MySpace Music has already proven that fan engagement with both live and music video content offers great opportunities for advertisers to draft off of hits and genre-based music, carrying the torch for thousands of established and aspiring bands and performers. From a creative perspective, between MySpace Music and VEVO, there's just a ton of interesting packaging opportunities here.

I can't help but wonder what cool opportunities there are for advertisers to package exclusives, celebrity video playlists and lots more alongside music-driven brand commercials that seamlessly just become another element of the content.

Something very exciting to watch -- and listen for -- in the coming year.

Happy Holidays.