VEVO launched on Tuesday with widespread reaction from the web. Formed under a partnership with Universal Music Group, Sony Music Entertainment and the Abu Dhabi Media Company, VEVO attempts to do for music videos what Hulu has done for high-quality television content. Analysts are split between skepticism and praise. While some view the Hulu model as less beneficial to music videos than to television content, others like Michael Learmonth of Silicon Valley Insider, see strong advantages with VEVO’s packaging:

Nearly two years ago, Hulu asked and answered the question of whether people want to watch high-quality network TV on the web. They do. Now Vevo is asking if they want to watch high-quality music videos. The performance of those videos on YouTube suggests the answer to that question is the same.

But while Hulu put many of those shows on the web for the first time, Vevo is taking what is largely already on the web and packaging it differently. Still, it starts with a huge traffic advantage. Hulu needed more than a year to reach 400 million views.

NewTeeVee’s Janko Roettgers continued the comparison by stating that a Hulu model for music videos is fundamentally flawed since music videos and television content are inherently different mediums. Roettgers contends that VEVO should allow for user contributions and not just offer premium content like Hulu:

The idea is not to separate music videos from all these user contributions, but to embrace them, much in the same way Warner Sony did with the JK wedding video, which helped to propel the Chris Brown song used in the video to the top of various download charts. In other words, if you want to have a Hulu-like success story for music videos, you shouldn’t build another Hulu, but something with an upload button.

David Kaplan of paidContent managed to score some insider notes during the VEVO launch party from the Google CEO and musician Sheryl Crow:

I spoke briefly with Google CEO Eric Schmidt, who told me that Vevo, which is a joint venture between Google’s YouTube and the major record labels, will “revolutionize the music industry by finally allowing it to make money online.” As for how, he told me to wait and see, but he added that advertising, merchandise and ticket sales are part of the mix. As I was being ushered out of the VIP section, I managed to talk with artist Sheryl Crow. Asked what impact Vevo could have on the industry, she said, “Nothing will ‘save’ the music business, but every little thing helps. And anything that puts money in artists’ hands for the work they do is a good thing.”

Prefix Magazine’s Chris Bosman commented on opening day in an article entitled, “Like Most Things Produced by Major Labels, Vevo Sucks“:

The public reaction to Vevo, however, has been underwhelming to say the best. Hypebot reports that, upon launch, users who attempted to use the site encountered several errors and were unable to find a bevy of music that is easily available on YouTube. At CNET, Matt Rosoff complained that his attempt to watch a U2 video stalled at 80 percent, and he is far from the only one complaining.

And while the site may not have been totally functional during the launch, MediaMemo’s Peter Kafka still sees hope in VEVO’s future:

Still, this isn’t a total wipeout for Vevo. Because while everyone has rightly been flocking to Vevo.com itself for a look-see, it’s not the most important Web site for the joint venture. That would be YouTube, where most Vevo users are actually going to encounter–and watch–Vevo videos, without even knowing that they’re watching a Vevo video.

To be clear: When Google’s video site agreed to help Universal Music Group (and later Sony) launch a new hub for music videos, it didn’t mean it would be sending its users away from YouTube.

When you read about Vevo launching with 400 million video views in the first month, understand that the majority of those aren’t coming from the new site but from YouTubers who are watching music clips the same way they always do, on YouTube. But Vevo will get credit for those eyeballs and any ad dollars they generate.

So for now, the advice I offered would-be Vevo-watchers yesterday in advance of the launch remains useful today: If you want to watch a Vevo video, head to YouTube. Vevo won’t mind. Really.

There’s yet another comparison being made: Analysts are calling VEVO the new MTV…

MTV plays music videos?

SUMMARY

This social media audit highlights online conversations relevant to the online video industry from January 2009 to October 2009. The data summarizes coverage behavior within influential blogs regarding online video brands in relation to one another. The overall industry is explored, followed by a closer look at conversations on the individual brands themselves. All metrics included in this report were recorded on 15 October 2009.

The following brands are examined in this report:

- Hulu

- Crackle

- TV.com

- YouTube

INDUSTRY

As online video distribution rises in both popularity and profitability, traditional media distributors have, in the past year, initiated ventures into new partnerships and platforms to keep up with the trend.

The ever popular, Hulu, governed by NBC, Fox and ABC continues to threaten traditional network television. With CBS’s TV.com and YouTube’s partnership with Sony’s Crackle, network presence online has become increasingly apparent. Finally, geolocation tracking on Hulu prevents those outside of the US from accessing its contents, giving an additional edge to sites like YouTube.

In June, Editor-in-Chief of ZDNet, Larry Dignan commented on the growth of online video by saying that, “Internet TV viewing appears to be a ‘second screen experience’ as 74 percent of consumers view content on their computer monitors without connecting to the TV. In other words, Internet TV doesn’t supplant the traditional stuff.”^[1] He additionally cites Hulu as the biggest legitimate threat to the cable distribution model.

Two large issues have arisen with the advent of online video: profitability and content rights. YouTube has yet to generate profit as it continues to operate, albeit famously, at a loss. Hulu experienced several content battles where shows like “It’s Always Sunny in Philadelphia” and “Arrested Development” were pulled by, what many bloggers speculate, was a power move by content owners. Video distribution across various hardware and software platforms has also grown tenser. As Hulu pulled its availability on Boxee and PlayStation 3, many online viewers are attempting to find hacks to regain access.

Quality content is indeed difficult to attain, as reported by Wired writer, Daniel Roth, “First, national and international theatrical distributors pay to show a film in their theaters. Next, there’s the DVD and pay-per-view windows. Then there’s the combined $1.7 billion a year that channels like HBO, Starz, and Showtime spend to secure the exclusive rights to show movies to subscribers. (Each studio usually signs with just one pay channel; all Warner Bros. movies appear only on HBO, while Sony’s go to Starz.) After a few months, the pay-TV networks hand off their rights to broadcasters and ad-supported cable stations. A few years later, the premium channels get the films back, giving them exclusive rights to air them. The windowing system can keep films locked up for years; Disney’s “National Treasure: Book of Secrets” came out in 2007 and is spoken for until 2016.”^[2]

Online video platforms, however, allow consumers to view quality programming at little to no cost. Many bloggers online have already become accustomed to this lifestyle and would likely protest to changes without increased offerings. Online video is a win for advertisers as well, as they gain the ability to create dynamic, interactive ads that can grab viewer data via participation in ways traditional television advertisements cannot. Tameka Kee, writer for paidContent, commented in June, “…premium video sites like Hulu and TV.com are finally starting to deliver ad rates that are greater than what the networks would get for their shows on air. Running an ad during The Simpsons on Hulu, for example, costs about $60/CPM, Bloomberg reports; running the same ad during prime-time on TV costs about $20-$40/CPM—or over 60 percent less in some cases. (…) That’s where the shift in perception—at least from an advertiser standpoint—seems to be taking place. ‘The reason people are paying such a high premium for these ads on the Internet is they do have a captive audience,’ David Poltrack, CBS’ chief research officer, told Bloomberg. ‘You know you have eyes on the screen.’”^[3]

Other competitors include Netflix, whose ventures into online and television streaming make it popular with many. It’s offerings of movie downloads on video game consoles like the Xbox 360 were also deemed successful.^[4] Additionally, movie kiosks focused on new movie rentals have also risen in popularity but compete primarily with the DVD rental market.

Traditional cable networks, HBO, Cinemax and Showtime have also entered the fray with TV Everywhere in attempts to preserve the model of cable television with an online edition. ZDNet’s Larry Dignan commented on plans for TV Everywhere in August: “You bet cable providers are trying to preserve their models, but is that such a bad thing? If I’m already subscribing to cable channels I should be able to view them online. And if that’s more of a convenience for me I’m all for it. If TV Everywhere flops there are always other online video outlets.”^[5]

Several influential bloggers still see a strong role for cable television, even with the proliferation of online alternatives. Stacey Higginbotham, a technology and finance blogger for GigaOM prefers the convenience of cable television, stating in August that, “consumers still have to jump through a lot of hoops to assemble their best bundle today. That’s why it’s easier to subscribe to cable TV from a service provider to get the video content you want, rather than buy DVDs, subscribe to a variety of sports packages online, or hunt down last night’s episode of ‘30 Rock’ on Hulu or YouTube.”^[6]

Request the full report for a closer look at the conversations governing each individual brand, including an examination of web presence, the distribution of commenting parties by community and a look at notable influencers in each space.