Vevo changes key with Warner Music deal

Vevo has struck a long-awaited distribution deal with Warner Music, marking a key step for the online video company as it looks to become less reliant on YouTube and establish itself as the artist-friendly face of music streaming. 

Under the agreement videos from Warner Music’s artists such as Bruno Mars and Ed Sheeran will be distributed across Vevo’s website and apps “imminently”. The deal fills what had been a missing piece in Vevo’s music catalogue, better positioning it to compete with the likes of Spotify and Apple Music, as it prepares to launch a paid subscription service this year. 

Warner Music had resisted adding its content to Vevo — the music platform partly owned by rivals Universal Music and Sony that draws nearly 20bn music video views a month — instead opting to partner with MTV.  

However, Warner Music’s videos will still not be distributed on Vevo’s YouTube pages, in the latest sign that Vevo is seeking to become more independent of the streaming company that has hosted the majority of its content since its inception in 2009. 

Erik Huggers, Vevo chief executive, has aimed to reinvent the company, away from its role as simply a supplier of music videos for YouTube. He likens his vision for Vevo to that of a specialty record store, in contrast to YouTube that is a “one size fits all supermarket”. 

“There’s room for both,” he told the Financial Times in an interview, adding that Vevo’s relationship with YouTube is “very important”, but that his focus is to partner with the music community to “create something unique, that frankly doesn’t exist yet”. 

Last month Vevo revamped its apps and website and announced it would bring in hosts to offer original programming and curated playlists. It has also made technical changes, adding features such as a Snapchat-style vertical video options for watching music videos. 

Steve Cooper, Warner Music chief executive, said the partnership would help the label to “explore ways to unlock the true value of music videos in attracting and engaging vast audiences”.  

The deal comes as the big record labels, plagued by years of shrinking album sales, are in a stand-off with YouTube as they look to create new licensing terms with the world’s biggest streaming music platform. YouTube, which holds a minority stake in Vevo, has been criticised by labels and artists who argue it is exploiting copyright law to pay below market rates for content. 

Streaming has displaced digital downloads as the largest source of music revenue in the US, and Mr Huggers has flagged his ambitions to join an industry-wide transition towards a subscription-based business model. The former BBC executive said the deal with Warner was “an important step in that direction [of a paid subscription service]”.

Spotify and Apple Music have battled for market share in the competitive music streaming space, although YouTube attracts more listeners than both of the companies combined. Spotify remains the market leader in subscriptions, with 30m users, although it faces growing competition from Apple, YouTube, Amazon’s Prime, and Jay Z’s Tidal.