Vevo Update

Vevo is an online music venture, which YouTube and Vivendi SA’s Universal Music Group are launching later this year.

Recording company Sony Music Entertainment has joined Vevo, backed by Universal Music Group and YouTube. The music unit of Sony Corp. will take an equity stake in the venture. The other two major recording companies, Warner Music Group Corp. and EMI Group PLC, are also in talks on joining.

Vevo is music industry’s version of Hulu. Now, it has its own version of Providence Equity. Abu Dhabi Media Company(ADMC) has purchased a stake in the company from owners Universal Music and Sony (SNE).The announcement was made today by Doug Morris, Chairman & CEO of Universal Music Group and Co-Chairman/Founder of VEVO, Rolf Schmidt-Holtz, Chief Executive Officer of Sony Music Entertainment & Co-Chairman of VEVO, Rio Caraeff, President & Chief Executive Officer of VEVO, H.E. Mohamed Khalaf Al Mazroui, Chairman of ADMC, and Edward Borgerding, Chief Executive Officer of ADMC.

Though the terms of the deal haven’t been made public, sources indicate that the joint venture is now valued at about $300 million.

google music’s (GOOG) YouTube isn’t an owner in the JV but will share revenue in exchange for lending Vevo its massive distribution platform. The site, which will exist both outside YouTube and within YouTube as a branded channel with its own player, is scheduled to launch later this year.

The service will operate at Vevo.com and have its own channel on google music’s YouTube, which will share ad revenue with the music labels. Incidentally google music Inc., now has partnerships will all four major recording labels - Universal, Sony, Warner and EMI and their publishing divisions.So,plans are in the works to offer song downloads, merchandise and concert tickets.

With the rising problem of declining sales of CD’s, major recording companies are experimenting with new innovative ways of distributing their music online so that it can generate sufficient revenue.Funding from the shareholders will enable VEVO to come to market with an attractive premium music offering for consumers and advertisers alike.

Consumer demand for music video entertainment is growing significantly today and is transforming the digital entertainment market and the music industry by fuelling new media business models. VEVO fits our vision and goals perfectly, as we are expanding our capabilities and continue to build the market for digital entertainment around the world.

said Edward Borgerding, Chief Executive Officer of Abu Dhabi Media Company.

Vevo will be launched in the United States and Canada later this year with a further international roadmap . VEVO will be a premium destination and enormous distribution network for the very best in top-notch music video content that will unleash the massive existing traffic of YouTube.

Speculation about Vevo:

speculation is that Vevo is a service that will let users watch videos online. Now if Google combines Vevo and Google Music with the Droid, the collaboration could send down some shivers to Cupertino. We hope the picture will get clearer in a couple of days .

What people think about Vevo:

Now, with Vevo, we can create the content, sell the ads, and even use the data to market new music to people alongside things they already like. When Vevo launches in December, it will be a great boon to the music industry - one of the web savy comments.

conclusion:

Vevo is a giant step forward for the music industry. Launching of Vevo opens a new door for the digital media industry . It ensures incredible growth for brand advertisers as well as for the consumers, desperately waiting for new premium video experiences online.