TECH in AMERICA (TiA)

SHARING AMERICA'S TECH NEWS FROM THE VALLEY TO THE ALLEY

YouTube Confirms Renewed VEVO Deal, Takes Stake In Company

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by Catherine Shu, courtesy TechCrunch

YouTube confirmed that it has renewed its deal with music video distributor VEVO. Not only does the deal allow YouTube to keep VEVO’s video on its site, but it also requires Google to invest in VEVO. Though deals of the term have not been disclosed, Billboard estimated in February that it is worth between $40 million to $50 million and would give Google a 7% stake in VEVO.

“We made an investment in VEVO. We are excited by their future prospects and to provide YouTube users with the best possible music experience,” said YouTube in a statement.

The investment is important for VEVO as it continues to build its international presence. The company’s April launch in the Netherlands brought the total number of countries it operates in to 11, including the U.S., Australia, Brazil, Canada, France, Ireland, Italy, New Zealand, Spain and the UK. VEVO has also been expanding its product offerings beyond music videos to apps for iOS, Android and Windows Phone Xbox, as well as music channel VEVO TV.

On Google’s end, its investment helps ensure that VEVO won’t sign a content deal with Facebook. Back in February, VEVO started requiring that all registrations be made through Facebook, which fueled speculation that it was planning to move away from YouTube.

YouTube and VEVO’s prior contract ended in April. Before signing a new deal, the two companies negotiated the amount of ad revenue YouTube could take from VEVO’s video stream, which is the top channel partner on YouTube with 50.2 million unique views according to comScore.

Vevo is owned by Universal Music Group, Sony Music Entertainment and Abu Dhabi Media Group.

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This entry was posted on July 3, 2013 by in M&A's and tagged , , , , , , , .

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