Bad CPMs Got You Down? Try the Traditional Tube

MTV quietly dropped ‘Music Television’ from its logo last week, and the change was long overdue.

But the old complaint that ‘MTV never plays videos anymore’ is getting a bit crusty.  Why?  YouTube – and the broader internet – utterly dwarf MTV in terms of music video volume, catalog, and on-demand convenience.  And, on YouTube, music videos are among the most popular pastimes, something labels noticed long ago.

That prompted broader revenue-sharing arrangements with YouTube, and the birth of the premium Vevo.  But online CPMs (including those surrounding music videos) are notoriously low, and Vevo’s attempts to ramp those valuations are best viewed as experimental.  Vevo is reportedly targeting CPMs in the $25-40 range, though current music video-related CPMs are hovering between $3 and $8, according to one knowledgeable source.

In that soup, an interesting alternative is coming from the traditional tube.  As first reported on Digital Music News last week, the Pennsylvania-based Music Choice has launched SWRV (pronounced like swerve), an interactive channel that hands programming to users.  SWRV lacks old-world veejays and programming meetings, instead relying on the take-control mentality of super-connected teens and kids.

The concept is totally hands-on, and allows fans to connect through Facebook, iPhone apps, texting, Twitter, or SWRV.tv.  The focal point is the traditional television set, though this is not your father’s MTV (more in this WMV video presentation).

SWRV is just getting rolled out, first on channel 900 on Cox Digital Cable in New England and Virginia.  According to Music Choice president and CEO David Del Beccaro, that covers roughly 3 million subscribers, though the broader, 5-year rollout will eventually canvass 60 million across the United States.

So, the story is just beginning, though Del Beccaro touted a much different set of economics.  “Advertising on television has a higher CPM than online,” Del Beccaro told Digital Music News.  “We have a much more engaged audience and higher CPMs, and we get paid a licensing fee from the networks.”

And, according to Del Beccaro, a cut of those CPMs – plus the licensing fees – are being shared with the labels.  But how much?  Del Beccaro declined to offer a specific number, but noted that labels would receive ‘north of 20 percent of gross revenues,’ a figure that means little right now but could ramp into something interesting over time.