Businessmodel of Vevo

Customer Segments

Vevo’s music video streaming service serves the general consumer market, providing access to content spanning a range of music genres, artists and events. The Company attracts a reported 50 million monthly unique viewers, of which more than 40% are aged between 18 and 34, and more than 60% aged between 18 and 49.

Vevo’s largest market is the US, followed by countries across Europe and the rest of the Americas. A cached Vevo web page also claims that the Company operates the number one music video site for attracting mothers and Hispanic users.

Vevo’s other customer segment comprises advertising agencies and brand marketers that wish to expand their media audience. The Company has built a customer network of more than 1,000 brand marketers since launching in 2009.

Value Propositions

Vevo’s key value to consumers is its accessibility, price and the depth of its music library. The Company provides free access to current popular music from many of the world’s biggest artists, record labels and production houses free of charge.

The Company’s content can be accessed via a wide range of channels, enabling users to utilise the service from anywhere on almost any internet-connected device, with registered users receiving personalised music streams and recommendations.

For advertisers the Company’s greatest value is its user base. The platform attracts more than 50 million monthly users, accounting for more than 10 billion monthly views, providing a significant audience for advertising and marketing content.

Channels

Vevo’s music video streaming service is available through its mobile and desktop websites at www.vevo.com. The platform, however, cannot be accessed directly through its website from all jurisdictions due to licensing restrictions.

In supported countries Vevo can also be accessed through iOS, Android, Windows Phone mobile apps; the Windows 8.1 operating system; Google Chromecast, Apple TV, Android TV, Fire TV and Roku set top boxes and digital media players; and PlayStation and Xbox consoles.

Vevo content is also widely accessed through its various syndication partners, most notably via YouTube.

Customer Relationships

Vevo’s service is entirely self-service for its general users. Music can be accessed either through the Vevo website or its syndication partners at no cost, with need for registration and no need for interaction with sales representatives.

Registering for an account, through which users receive an automated personalised music stream, is also self-service. Vevo supports some social networking functionality, allowing users to add and interact with friends.

In contrast to general consumers, advertisers must approach the Company directly, contacting members of the Vevo sales and marketing team via an email link on the Vevo homepage.

The Vevo website includes a help section, where users can find troubleshooting and user guides. Users are also able to interact with Vevo directly through its Facebook, Twitter, Pinterest and Google+ accounts.

Key Activities

Vevo operates an online music and entertainment portal for consumers, advertisers, and content owners. It provides access to licensed music content that can be viewed free of charge by users through a number of syndication partners.

The Company sells advertising space within this content to advertisers and brand marketers, enabling them to reach a greater audience.

The Company also manages a network of content contributors, comprising record labels and music production houses, which provide the Company’s music content.

Key Partners

Vevo’s key partners are record labels, tech companies and app developers, and syndication partners. The Company’s music content is obtained through licensing partnerships with major music production companies that allow the Company to shares its music commercially online.

Vevo has secured strategic alliances with a number of big names within the music industry, including Universal Music Group, Sony Music Entertainment, EMI Music, Hollywood Records, Walt Disney Records, CBS Interactive Music Group, Big Machine Records, Concord Music Group, Lyric Street Records, ABKCO, Caroline Distribution, Fontana Distribution, INgrooves, IODA, RED, and The Orchard.

Vevo maintains a network of syndication partners that are permitted to stream Vevo’s licensed content, including live-streamed events, archived performance footage and original programming. The Company’s most significant syndication partner is YouTube, through which it generates the majority the majority of its viewers. Other syndication partners include AOL, Last.fm, MP3.com, BET, Gorilla Leak and Batanga.

Vevo also collaborates with a range of tech platforms and applications to provide integration across multiple channels. The Company has integrated Twitter, Spotify and YouTube functionality in order to provide more personalised music streams to customers.

Key Resources

Vevo’s key resources are its content, its partners, its technology and its IT infrastructure. The Company’s revenue generation depends on the success of its partnerships with major record labels, which account for its music content.

Vevo’s syndication partners also play a key role, particularly YouTube, in generating traffic for the Company’s platform.

Cost Structure

Vevo’s principal costs relate to the maintenance of its software platform and IT infrastructure, the payment of licensing fees to its content partners, advertising revenue sharing agreements with its syndication partners and retention of its personnel.

Revenue Streams

Vevo’s revenue is generated primarily through advertisements placed within its content. The Company offers a range of advertising opportunities, allowing advertising customers to places ads in music video premieres, cross platform content, branded entertainment, tentpole offerings such as Certified Live and The Year in Vevo and original programming.

Vevo has the first right to sell ads in its content across its various syndication partner platforms. When advertising space is unfilled, syndication partners can sell the advertising space and share any revenue it generates.

In addition to its advertising sales, Vevo also generates revenue through the sale of merchandise and commission-based payments for referrals to Amazon Music and iTunes. Vevo is also considering the introduction of a paid subscription service that would allow users to stream music ad-free. No timeframe or pricing details have yet been released for this service.