Vevo explores subscription model
Vevo CEO Rio Caraeff says his company is exploring a subscription model as it looks to find further ways to monetise its music video service.
Speaking at The Guardian’s Changing Media Summit in London today (21 March), Caraeff said Vevo is also looking to add more features to persuade users to log-in to its service via its own site where advertising is more valuable, rather than with syndication partners such as YouTube and Facebook.
Features could include more targeted offerings from brands, rather than its current advertising which is based on genre, location, time of day and the artist the user is listening to.
Caraeff said such offerings are about creating “less of a one night stand and more of a long term relationship” with the user.
He added: “With [CDs] it would be all about ‘give me the money, I’ll give you a CD and then I don’t want to know anything about you’. But there’s a value in building a long term relationship, getting to know who [the user is] and taking an interest in [them]. That approach of a customer relationship is very new to the music business”
Vevo, currently operates on a purely ad-funded model, with some revenue shared with its syndication partners, although to have just one business model and revenue stream “is not healthy for any business”, according to Caraeff.
He added that access to content via streaming and cloud-based services such as Vevo will ultimately trump ownership of content, across the music industry and beyond.
“Music is the canary in the coal mine [for this idea of access over ownership]. You can make money from lots more people instead of the small amount that chose to buy it previously.
“If you ask any teenager where they find their music they’ll say ‘YouTube, Facebook, Twitter, the radio’ and all of those places create ad revenue that was never being generated before,” Caraeff said.
Vevo which is a joint venture between Sony Music Entertainment, Abu Dhabi Media and Universal Music Group, claims to have made $150m (£95m) in revenue last year.
Caraeff said the company should turn profit for the first time since its launch in 2009 this year.