Two weeks ago, we heard Google planned to invest in Vevo. Today, those rumors heat up with some specifics…
Google Inc.’s YouTube is negotiating a $50 million equity investment in music video service Vevo LLC, according to two people with knowledge of the situation. Google would own less than 10 percent of the company, giving Vevo a valuation of at least $500 million, said the people, who asked for anonymity because negotiations are still early and an agreement may not be reached. The investment would be part of a broader contract to keep Vevo’s music videos on YouTube, the people said. Vevo, formed in 2009 by Vivendi SA’s Universal Music and Sony Corp.’s Sony Music Entertainment, and Google last year extended their existing contract until April.
Some of the most valuable (and clicked) content on YouTube is from Vevo-associated Artists. Vevo previously threatened to leave YouTube, so the investment would be to secure long-term access to the content advertised on and monetized by affiliate links to buy music.
It is also important to Google’s ecosystem to have easy and cheap access to all of Vevo’s content.