Digital Media

Vevo CEO and President Rio Caraeff more or less confirmed on Wednesday my suspicion that the music service was not created to serve a new need for consumers. Rather, it was built to help advertisers and content owners (including labels, artists, and music publishers) capitalize on music videos, and to help Google (YouTube's owner) offload some of the cost associated with administering rights to them. In other words, this isn't a business-to-consumer play, it's more of a business-to-business arrangement.

Vevo's launch glitches appear to have been resolved.

(Credit: Vevo)

As he put it: music videos are popular online, fans like them, and content owners think of them as premium content. But they're too widespread, appearing on YouTube, AOL, and many other sites, and the user experience is way too varied--when a user searches on a song name at YouTube, they might get multiple copies of the exact same music video, plus user-posted remixes, live versions shot with a cell phone camera, and even parody versions. More generally, music videos grew up as a promotional tool for albums, and advertisers and users have come to see them as a commodity rather than prime product. Consequently, advertisers haven't been willing to pay much to place their messages next to them, and online music videos have lost money at a "staggering" scale.

Vevo is meant to provide an online clearinghouse for label-approved music videos--the kind of professionally shot videos that often cost half a million dollars or more and used to form the backbone of MTV. Vevo will be the exclusive distributor of these videos, and will handle all licensing and ad sales, although partner Google is handling the actual video hosting and streaming. In other words, if you're running a video site and you want to post a video that's in Vevo's catalog, Vevo will be your only source. By enforcing scarcity, giving advertisers a central place to buy ads, and controlling the user experience--for example, ensuring that there aren't many copies of the same video on YouTube--Vevo believes that advertisers will be willing to pay much more to appear next to these videos. So far, this seems to be true: according to Caraeff, advertisers have been willing to pay between $25 and $40 per thousand views (CPM, in advertising parlance) for Vevo-provided videos, compared with average market rates of $3 to $8. Caraeff claimed that artists and publishers will get about 50 percent of all revenues from these ads--a much higher percentage than they earn from recordings. This is why Mariah Carey and U2 were so excited about the launch.

Interestingly, Vevo will also curate unlicensed videos. For example, if somebody creates a remix of a Beyonce song with an associated video, and it becomes a runaway hit, Vevo might try to claim the video, add it to the Vevo catalog, and handle licensing for its content owners. Caraeff claims they're not going after the home video of your dog skateboarding to your favorite song, but professional-looking videos that have never been claimed, and therefore aren't making any money for anybody. (YouTube doesn't sell ads against unclaimed content for fear of copyright liability.)

So what's in it for Google? Simple--although YouTube has tons of viewers, it also has more inventory than it can sell advertisements against. Licensing for music videos is complicated, and not in Google's core area of expertise. Google is happy to hand this task off to Vevo and accept a lower percentage of advertising dollars because it believes the cost savings and higher CPMs will eventually make business sense.

Finally, about the botched launch: As Caraeff explained, Vevo was basically a B2B play, and the company didn't expect many users to visit its site on the first day. But the publicity created by the big launch party drove massive interest, and the company got more traffic in its first hour than it expected for its entire first year. For what it's worth, the company has added 32 servers in the last 24 hours, and I'm now able to get videos to play on the site with no problem.

In addition, Vevo didn't think it was critical to launch with a full complement of content--remember, it's mainly a back-end and clearinghouse for YouTube and other sites, and if you were watching videos there yesterday, you'll still be watching those same videos there tomorrow (as long as a takedown notice hasn't been issued). So Vevo launched with only about 15,000 videos from Sony and Universal Music. In January, it will add about 30,000 more from EMI and several independent distributors.

I still don't understand why they launched Vevo.com as its own Web site, but at least I understand the thinking behind the company. It won't change my behavior--I'm still going to YouTube, and if a video happens to be provided by Vevo, I'll know that the artists are making some money from it. Fair enough.

On August 1, 1981, a cultural and entertainment juggernaut flickered onto TV screens and rocketed out of obscurity with these six words: "Ladies and gentlemen, rock and roll."

With that, the iconic cable network, MTV, was launched and a popular entertainment category--music videos--was born. Now, 28 years later, MTV has largely abandoned the genre and the record industry is preparing for the debut of a possible successor.

On Tuesday, video start-up Vevo is scheduled to launch. Supported by three of the top four largest record companies (sources say EMI has agreed to provide content to the site) and backed by the technological muscle of YouTube, Vevo is a Web site that will feature videos from many of the world's biggest recording stars, including U2, Cold Play, the Black Eyed Peas, Lady Gaga, Avril Lavigne, Bruce Springsteen, and Pearl Jam, according to the site's backers.

The move comes three years after Google's YouTube began proving that the masses still love music videos. Professionally made music clips are by far the most popular fare on the Web's No. 1 video site, accounting for 14 of the 25 most viewed clips ever. The labels involved with Vevo boast a combined total of about 15 billion views on YouTube.

Much of the music industry, including a score of independent labels that have recently signed on to the project, think it's time for music videos to take the next step in their evolution. They want a standalone site packed with high-definition clips from marquee acts.

Don't look for any user-generated content on Vevo, according to Doug Morris, chairman and CEO of Universal Music Group, the man who came up with the idea for the service. He said he wants to offer music fans as well as advertisers a more polished digital stage. That's one of the main reasons the venture was built, to charge advertisers premium rates in exchange for premium content.

Another motivation for building the site was to give the music industry a greater say in what happened to its content.

In an interview with CNET last week, Morris made no bones about the fact that by launching Vevo, the music industry is serving notice: no longer will middlemen or third parties profit from the labels' video content without giving up a fair share.

"What we're really doing is taking back control of everything," said Morris, who operates the largest of the top four recording companies. "This is us taking control of our future...Vevo enables us to provide consumers with about 80 percent of all the music videos in the world. So, this is really like MTV on steroids. We're starting with that kind of audience. But now we're in control of it. We don't have to go through a middleman anymore."

The problem as defined by the music sector started with MTV and extends all the way to YouTube.

When MTV was created, everyone told the labels not to worry about getting paid because the cable channel helped promote artists. "It was good exposure," they were told. The experts said the same thing in 2006 when YouTube started to emerge as one of the Web's favorite music sources. For a long time, the record companies seemed happy to go along, even as MTV built a financial empire from the videos.

But this time around, the music industry can't afford not to be the one who cashes in. The rest of the business is in decline, as CD sales shrink and profit margins on downloads are sliver thin. Record execs have been criticized for not finding new revenue models, so that's what they are trying to do. They believe there's new money to be had from the videos, even as they readily acknowledge that getting to it hasn't always been easy.

Morris remembers seeing a video from a Universal artist posted to Yahoo a couple of years ago and asking one of his employees what the portal paid for it. The exec told Morris the video was considered promotional and Yahoo paid nothing.

Promoting what? The video was five years old and Yahoo was pocketing the ad money without sharing it with the creators, Morris recalled telling the employee.

"I then called up (former Yahoo CEO) Terry Semel," Morris said. "And I said, 'Terry, we want to be paid.' Semel replied 'Absolutely not.' Then, we took our videos down from Yahoo and AOL and their viewership declined, at which point they came back and they paid us. They paid us a percentage of a cent for each view."

Morris isn't implying that Vevo's music clips will no longer be used to promote music or that Vevo plans to charge to watch videos. No, they will still be offered to viewers free of charge.

What is changing is that music videos, which often cost tens of thousands of dollars to produce, won't be treated as loss leaders anymore--not in this economic environment.

Nonetheless, Vevo faces plenty of challenges.

Nobody has proven whether advertisers are willing to pay top dollar for online videos, even professionally made music videos. There's also the question about whether interest in the genre will wane just as did with previous generations of music fans. After all, MTV switched to reality shows for a reason, no?

Rio Caraeff, Vevo's CEO, says the music video is only one of the site's features. The obligatory playlists will be available but music lyrics will also be offered. Visitors will have more access to their favorite performers than ever and Vevo's video quality will be as much as three times as what is typically available online.

All these upgrades were absolutely necessary to draw the kind of top advertising dollar that label honchos seek, according to Caraeff. He said typical ad rates for Web video run somewhere between $3 and $8 for every thousand views. Vevo's mission is to attract rates of $25 to $40.

"Successful was how we felt about YouTube, in terms of the shear popularity of our programming," Caraeff said. "But what we felt was that there could be a better way to drive a business around it. Advertisers had some reticence and some reluctance to fully embrace music videos on YouTube. We felt that there was work to be done to restore the premium luster and really create a better experience for advertisers."

In the short run, look for Vevo to be an online music store where downloads are sold as well as the merchandise created by artists, such as clothes and perfumes. In the long run, a music-video subscription service could be rolled out, one that offers full-length concerts.

"I do believe we will have a subscription service where we will stream live concerts from all over the country to viewers for a monthly fee," Morris said. "This is futuristic. We have not built this yet, but we're working on it."

You know that apocalypse thing we're always being told might be just around the corner? Well, do you feel the chilling breeze? Do you feel the troubled twittering in the trees?

For here is a tale that I know you will discuss with your loved ones, perhaps with other people's loved ones, even with your psychological professional, the minute you hear it.

It appears a man called Dana Hanna is standing at the altar on November 21. He utters those most solemn vows about how he will love and obey or whatever it is that married people claim to do these days.

The officiant pronounces that Dana and his lovely bride, Tracy, are now married. Does Dana weep? Does he kiss his bride?

Ah, no. For Dana's Twitter moniker is TheSoftwareJedi and his first loyalty is to his digital followers. So, much to his wife's surprise, he whips out his cell phone and updates his statuses on both Twitter and Facebook. Right there at the altar. He also hands his wife's cell phone over to her.

Now that he has uploaded the evidence (which we're assuming isn't staged), Dana insists that this was all done for fun.

Indeed, he explained on YouTube: "I have a lot of family scattered around the country and we all use Facebook a lot to keep in touch. So when Tracy and I were engaged, most of my family found out via Facebook because we updated our statuses."

If you're wondering what it is he tweeted from the altar, here it is: "Standing at the altar with @TracyPage where just a second ago, she became my wife! Gotta go, time to kiss my bride. #weddingday"

However, another tweet sent on Monday night by Hanna, who is chief architect of NextDayPets.com and president of Torian Technologies, might perhaps offer an even greater insight into his complex and socially networked psyche: "Just changed over the laundry for @TracyPage and was thrown off by the fact a bra was in there. Not used to living with a woman again."

Oh, Tracy, are you sure about this? I only ask because I just tried to access the Tracy Page Twitter feed and received the message "this page doesn't exist."

YouTube, which is already trying out the movie rental business, wants to get into TV, too.

Google's video site has been trying to convince the TV industry to let it stream individual shows for a fee, multiple sources tell me.

YouTube already lets users watch a smattering of TV shows for free, with advertising. Now it envisions something similar to what Apple and Amazon already offer: First-run shows, without commercials, for $1.99 an episode, available the day after they air on broadcast or cable.

Sources say the site's negotiations with the networks and studios that own the shows are preliminary. But both sides seem optimistic, since models for such deals already exist. No comment from YouTube.

The biggest stumbling block may be consumers. That's because Google is talking about streaming the shows, instead of letting consumers download them to their computers, as both Apple and Amazon do. But the networks and studios, who control pricing, will want to sell the streamed shows at the same price as downloads--they fear that offering them at a different price will force them to go back and rework their existing deals.

Executives at YouTube and TV insist that the disparity is simply a perception problem, and cite studies that show that most people who download TV episodes only watch them once, anyway. But that's a tough sell.

It's also possible that YouTube may skirt the issue by launching a TV rental business without the big hits that Apple and Amazon offer. One possibility: It could start by moving immediately to long and mid-"tail" shows and videos that aren't available other places, and don't have to match existing prices.

No matter how it does it, YouTube is likely to be just one of several outlets trying to get consumers to pay for TV on the Web in 2010.

Among others: In addition to its a la carte offering, Apple is trying to create a monthly subscription service. Hulu, the free TV site co-owned by News Corp.'s Fox, GE's NBC Universal and Disney's ABC, is expected to launch a subscription service of its own. And cable operators like Comcast will be launching different versions of "TV Everywhere" services, which give subscribers expanded access to online shows.

TV executives are generally enthusiastic about all of the above, since they are meant to create additional revenue streams without threatening the industry's existing business. That is: They're supposed to protect it from the digital disruption that has ravaged music, newspapers, etc.

But while Web users have an insatiable appetite for video, they've yet to demonstrate much interest in paying for it. If any of this is going to work, that will have to change.

Story Copyright (c) 2009 AllThingsD. All rights reserved.

Miley Cyrus is undoubtedly one of the world's greatest and most important musical artists.

So when she recently decided to leave Twitter and rapped on YouTube about it, one imagined that investors in the supposedly billion-dollar company shivered uncontrollably for several days.

As did some who watched the haunting performance in her rap video.

However, now the teeny singer has gone further. She believes that Twitter should be banished from our firmament. And I mean firmament.

You see, in an interview with the B96 radio show in Chicago, embedded for your pleasure, the pop divette declared: "Twitter should just be, like, banned from this universe."

I should say that Miley's speaking voice isn't quite as mellifluous as her singing. What could be? However, please peruse this video and, when it gets to around the 3.30 mark, you might enjoy Miley's Twitter tirade.

A highlight of her invective was, perhaps: "Because people, like, honestly, like, I mean people wanna know why, like, you're, like, unhealthy, and, like, you need, like, get out and do stuff and, like, be in the world instead of being like this (pretends to be hunched over a keyboard) all the time. And, like, all I did was, like, lay in bed all the time."

I know there will be some who might fear that Miley has removed herself from Twitter because the 140 character limit did not allow her full expression of her likes and thoughts.

However, I am confident that this deeply introspective performer is merely trying to warn her fellow teens of the dangers of immersing yourself far too much in, well, yourself.

As she further cautioned: "I"m not really a big fan of the Internet any more. I don't really get online."

Should you or your children be concerned that Miley might disappear entirely from the Internet, please rush to purchase some of Miley's fine recordings, which are available at iTunes.

Moreover, at MileyCyrus.com, you can secure examples of her highly stylish, Miley stylish collection of clothing. Regretfully, the current link doesn't go through directly to the Miley Cyrus collection on Walmart.com, which might be something of an oversight. You can also still find Miley on Myspace.com/mileycyrus.

Alternatively, you could spend all of your energies trying to save Fuzzy.

You see, Fuzzy's owner, who is possibly humorous or perhaps, like, demented, has declared that she will kill her cat Fuzzy on November 16 unless Miley returns to the world of the tweet.

At Twitter.com/mileysavefuzzy, you can participate in the important debate concerning Fuzzy's future.

You can also go to Mileysavefuzzy.com to learn more about how Fuzzy is to be cooked in the event of his demise. Eating a cat is not, allegedly, illegal in the country in which Fuzzy resides.

How can anyone not, like, like the Internet?

Rumors have begun to trickle from Googleville that the Jolly Search Giant is beginning to change its mind about those fickle fellows who espouse creativity.

You know, the sort who don't necessarily think you should research 41 different shades of blue. The sort, indeed, who sleep under their desks at ad agencies.

Which leads me to wonder whether a certain rebalancing might shortly occur in the tender relationship between the left-brainers and right-brainers of product selling.

The Web largely began as a functional experience, where everything you looked at was created by those who felt that what it does would always be a little more more important than how it looks. Partly because these people had no idea, nor did they really care, how to create something that actually looked truly inviting.

Few might agree that Google and YouTube, despite the fact that huge numbers of fingers populate them daily, are the most aesthetic of locations. Utilitarian would be the polite way of describing their sense of design.

A 10-year-old mathematician's idea of pulchritude would be a less charitable version. Somehow, every time I go to YouTube, in particular, it feels like the crummiest of Blockbusters, with DVD boxes that are fraying at the corners.

A little like a crummy video store?

(Credit: CC Original Hamster/Flickr)

Ad agencies, very heavy on pretty and very light on engineering, at first tried to mimic print ads and billboards and squeezed them into a medium that was far more individual, far more personal than any seen before.

The Googlies thought ad agencies somewhat risible relics of a disappearing world--like a bunch of Don Johnsons trying to deal with the brainy world of CSI.

Yet while the Web is still very functional, it is also the place where we increasingly live far too much of our lives. We watch TV on the Web. We read papers on the Web. We find lovers on the Web. And we continue to tell them how much we love them on the Web.

I know that some people feel that the pages of, for example, Yahoo Sports and the Huffington Post have been occasionally enhanced by wallpaper ads that add energy to the home pages without taking away from the content.

So advertising, done right, surely has a chance to make Web pages more attractive, more involving, and more inspiring.

There was a time in the U.K., for example, when the TV ads were actually more interesting than much of the programing. It is possible. It does happen. Brazil is another country where advertising can be far more involving far than the latest soap opera.

As Google decides that display advertising is where the new money will inevitably be, ad agencies might just think about creating work that makes Google's pages a little more inviting, a little more, dare one say it, exciting.

How strange it might be, in some optimistic future, if advertising created by outsiders actually helped Google with its business as well as advertisers with theirs.

The advent of Bing has shown that just a little aesthetic sense might, in fact, help to attract real people out there, those scouring the Web for anything that might brighten their day.

Just imagine if Google's and YouTube's pages were adorned with ads that offered wit, charm, and design sense as opposed to little blue words offering last minute vacations or little yellow words promising erectile function.

Might that be good for business? Might it even encourage YouTube, in particular, into a redesign?

Prince Philip is the tall chap who married the queen of England, enjoys making beautifully inappropriate comments, and feels intimate contact with his television might be necessary in order to make it work.

In a revealing interview, only some of which seems to have appeared on the Buckingham Palace YouTube channel, the prince laid bare his electrical dysfunction, one that many might, secretly or not, actually share.

His interviewer, a rather well spoken chap called Kevin McCloud, brightened up the pages of London's Times newspaper with some of the prince's heartfelt words.

Perhaps the most elegant of the phrases turned by the 88-year-old prince was: "To work out how to operate a television set, you practically have to make love to the thing."

It has never been my habit to wonder about the conjugal behavior of the regal.

However, once one's mind goes quickly beyond boggling in order to consider how one might make one's plasma pulse race, one begins to appreciate that many people do find it rather difficult to grasp even 10 percent of their gizmos' workings.

Prince Philip photographed moving swiftly.

(Credit: CC Steve Punter/Flickr)

Of course, the prince's imagery is so disconcerting that I wonder just what actions came immediately before the creation of, for example, Prince Charles.

However, Phil the Greek, as he is sometimes known in pejorative circles, will no doubt receive some sympathy for his giddy criticism of technology's grave new world. Why can't things be just blindingly simple, especially for those whose eyes are not quite what they used to be?

Not satiated with his criticism of televisual operations, the prince turned his mind and, one feared, his devilishly seductive eyes, toward the Web.

"The Web sites I've seen are so awful it's untrue," he told McCloud. "They're so unfit for purpose I'm surprised anyone tolerates them."

Surely he has a point. There are so many ill-designed sites on the Web that one's eyes sometimes water with pain. However, given the prince's somewhat outre position on the subject of televisions, many will find themselves caught in the uncomfortable posture of now considering which Web sites the prince has, um, actually visited.

Please might readers suggest something appropriate, as I fear my own thinking has been addled and muddled by the prince's highly colorful imagery.

There are those moments in the business cycle of a young dynamic brand when people look back and say: "If only that hadn't happened."

And so it is with Twitter. And so it is with Miley Cyrus.

You see Miley, she who is sometimes Hannah Montana, was rapidly becoming one of Twitter's most trusted Swiss Guards. She had almost 2 million followers.

Now the sheep have lost their shepherdess. For Miley Cyrus has silenced her tweets, starved her Twitter feed, and drifted off into the uncertain socially not-working darkness from which some stars never return.

This is clearly a disaster for Twitter. Microblogging needs micro people to bring in the macro crowds. Cyrus, who is possibly only four or five years old in real life, was one of Twitter's most durable pre-pubescent predilections.

After her painful and dramatic departure, how can coming generations take the brand seriously?

Perhaps worse, though, is the means Cyrus chose to deliver her beating on tweeting. Yes, she went on YouTube. And, yes, she performed a "Good-Bye, Twitter" rap.

In the rap, she dismisses the idea that she was forced to quit Twitter by her boyfriend, Liam Hemsworth, an Australian actor perhaps most famous for his role as, well, Miley Cyrus's boyfriend.

If my ears served me correctly, Cyrus seems to suggest in this musical tour-de-farce that she was concerned that she had begun to "tweet her pimples."

I was not aware that she had pimples, nor that she had attempted to tweet them. But I am concerned that she may have tried to do this without the appropriate medical supervision.

However, before my cup of concern overflowed into my glass of cabernet, I could hear the world's next Streisand rap that no one really cares if she's "playing with Noah" or "doing my hair."

I am not sure who Noah might be, but the underlying arc of pain seems to have been caused by those horrid gossipy tabloids trawling through her tweets, like investigative journalists digging into Elton John's garbage cans, in search of juicy information.

In a disturbingly out-of-sync climax, Cyrus declares she wants "her private life private" and that is done "trying to please."

It is a confessional that will surely make so many of the world's parents weep. Indeed, Cyrus admits that she became a little obsessed with Katy Perry and Britney, but that she is now "peacin' out."

As I peace together this seminal moment in social-networking history, I find myself saddened beyond measure that one of the world's great Twitterers may have been forever lost.

Nonethless, I know that you, together with the Twitter hierarchy, will cling on to the fact that one of the world's other great rappers, Kevin Federline, appears to still have a Twitter account.

(Credit: Smarty Pants)

Kids may gobble up junk food, but it seems they love playing with Nintendo devices even more.

Out of the 100 most loved brands for America's children and tweens, the Nintendo Wii and DS scored the first and second spots, according to a report by research firm Smarty Pants.

The survey "Young Love" found that even tempting snacks like Oreos and M&Ms trailed behind the Nintendo gear, taking the third and fifth spots in the list, respectively. Other techie items loved by 6- to 12-year-olds included the iPod at number 12, Sony's Playstation at 14, YouTube at 36, and Microsoft's Xbox at 42.

Kids participate in more than $500 billion in consumer spending each year, according to Smarty Pants, and their parents consider their favorites when buying everything from snacks to entertainment, both of which popped up heavily on the list.

"From Crayola to iPod, kids' most loved brands are familiar, iconic brands that delight kids and parents with variety, value, family-friendly content, and simple pleasures," Smarty Pants President Wynne Tyree said in a statement. "Interestingly, the top brands are not traditional 'for kids only' brands; in fact, many are not marketed directly to kids."

To compile the report, Smarty Pants questioned 4,700 American kids and their parents online over a period of nine months. Covered in the survey were more than 260 consumer brands across 20 different product categories.

The brands that kids liked most, said SmartyPants, were the ones that offered high-quality family time, age-appropriate content, parent-approved indulgence, variety/choice, "cool" accessibility, and chatter-worthy advertising.