After over a year of negotiations Warner Music Group and Vevo have announced a partnership, which offers Vevo access to premium WMG artists’ videos. This milestone agreement finally gives Vevo access to the three major record companies, Warner, Universal and Sony. WMG, who is often referred to as the “independent major” has been hesitant to partner with Vevo (owned by Universal Music Group, Sony Music Entertainment, Abu Dhabi Media and Google), due to concerns with advertising and artists’ compensation. The deal, unique to WMG, will not permit Vevo’s YouTube channel to display WMG content, allowing WMG to retain its original channel for its artists’ content. Vevo will only display WMG content on their website and mobile app. In addition, the agreement does not include equity as Sony’s and UMG’s do. With this deal, Warner will be able to offer their artists, such as Bruno Mars, Coldplay and Blake Shelton more visibility and opportunities to monetize, while retaining control and flexibility over their artists’ content. This deal is part of a trend WMG has been following this past year to increase creative and commercial opportunity for their artists by making licensing deals with other social sites such as Facebook and Musical.ly.
This partnership is also a major score for Vevo, who in the future, plans to move away from YouTube and further its development of its own paid subscription site. Vevo, now having access to all three major record labels, will have the ability to attract a larger crowd to their site and create more engaging content. Vevo is aware that YouTube has been heavily criticized recently for its ‘value gap’ between music rights-holders’ compensation and the amount of music consumption on their site and Vevo intends to reboot their own separate interface to keep their relationship strong with the major labels. Vevo will focus on three distinct areas: creative content and programming, product and brand in the hopes to create a successful platform with social components, a personalized video player and original programming.