Finally after years of waiting, music video streaming service Vevo is set to officially launch in Australia today.
The service, founded in 2009, is owned by major labels Sony Music Entertainment, Universal Music Group in conjunction with Abu Dhabi Media, and was set up to create a one-stop-shop for high quality music videos. Its library includes about 45,000 music videos by more than 11,000 artists. Its most watched video, sadly, is Justin Bieber’s Baby, with 723.9 million views and climbing.
The Australian operations will be run by Melbourne’s MCM Entertainment Group, which counts Michael Gudinski’s Mushroom Group as one of its major shareholders.
The move comes as part of major international expansion planned by the US start-up over the next few years as it moves to capitalise on the anticipated boom in one advertising, in particular online video advertising.
Another six countries across Europe and Latin America are also being targeted as part of the global rollout which is being overseen by vice-president Nic Jones, the man who used to head up the digital arm of News Limited here in Australia.
“We’re not launching an American music site – that wouldn’t work,” Jones said. “It’s an Australian site curated specifically for Australia and will reflect the taste of the Australian consumers.”
Most of the video content can already be streamed here in Australia thanks to a licensing deal with Youtube, but the launch of the Australian operations will bring with it access to the standalone vevo.com site with new features such as the ability to create playlists and sync them with iTunes.
MCM Entertainment, who already look after a number of other music properties such as Take 40, The Hot Hits, and the ARIA Charts, and license about 12,000 music videos and streams a month to their online destinations, plan on using vevo.com as leverage to increase their web presence to over 47 million plays a month.
“That will absolutely ensure we will lead this market when it comes to digital music video consumption,” MCM chief executive Simon Joyce said.
According to The Australian, MCM will also be responsible for selling local advertising on the website, and Joyce predicts it’s launch will give a much needed jump start to the local advertising market which lags behind the United States. In Australia, video accounts for just 6% of total online advertising spend, compared with 14% in the US market.
But the market is still relatively small and MCM have a good chance of gobbling up a large percentage of that market, which the Interactive Advertising Bureau of Australia believes will grow to $200 million by 2014. According to the IABA, the online video advertising market here in Australia generated $40 million in 2010-11, compared with $25 million the year before.
“In the past, it was probably a bit too hard, or unknown, but now there is an enormous shift from advertisers to consider online video in their strategy,” Mr Joyce said. “Digital is the growth medium of choice and the real highlight inside digital is online video.”
“As far as a four-minute piece of content goes, this is the ultimate,” he continued. “Where else do you get content that people are so passionate about that they are literally leaning in as they consume those four minutes?
“We think that’s a pretty compelling opportunity for the advertiser and now we have significant scale to back that up.”
