Live@NARM, Monday Morning: Vevo’s Rio Caraeff

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Ted Cohen, interview w/ Rio Caraeff, Vevo.  The live notes..

Ted: Industry bad at creating their own services.  Not really a big track record.

Rio: Industry did not create YouTube, MySpace, Napster, “hard to point to any particular success,” so “there’s a real burden on the business,” and “business on execution is key”.

Ted: But, the real question is, how are you going to screw this up? (j/k)

Rio: Hard to boil the ocean, wanted to “focus the business on doing one thing right, and one thing well,” therefore video, so “we’ve narrowed the execution of the business” to maximize success.  But partnering with Google, “because trying to do everything on your own is difficult,” and the ultimate goal is to “have meaningful scale” to be meaningful to artists, labels, etc.

It needed to happen quickly, especially since that long-term patience is really not there.  Nothing wrong with that approach, butknew he had to ramp quickly to be taken seriously within music and media industries.

Also, “not about defending an old model,” not “trying to sell more music,” wants broader engagement beyond the small group that is buying.

Ted: How does the YouTube relationship work?

Rio: Philosophy, get in line w/ the “physics of the web,” the world is “porous and symbiotic,” so “the notion of telling people they have to go to one place,” and “belief that you can create scarcity,” not so effective.  (here, a very subtle jab at EMI/OK Go, possibly).

And, “it really starts with YouTube,” “that’s were the action is today,” so the deal finds Vevo powering about 85 percent of premium music video content.

Ted: Library around 40,000?

Rio: Catalog keeps growing.

Ted: Who’s not there?

Rio: Warner Music Group.  Only major partner missing, “different business philosophies”.

But, Rio seems un-deterred by this.  Syndication deals, partnerships with AOL, Last.fm, etc. happening.  “We know there are plenty of places where videos should be, but aren’t” because licensing and support is so difficulty.

Advertising – ubiquity for the fan, but scarcity for the advertisers.  So, the options for advertisers starts to shrink, fewer options.

Ted: More Colgate-Palmolive, expansion?

Rio: We want to break new artists, and also generate revenue.  Can you do both?  The C/P program intros “hot new artists to relevant fans” without compromising revenue.  There’s pre-roll promoting artists ahead of the video, but “it’s all paid for by an advertiser”.

Ted: Does the artist see revenues off of this?

Rio: Yes. And, “we have a very generous definition of revenues,” also “everybody gets the same shake,” there is equitable distribution.

Also, ingestion process often involves taking entire label catalogs, and letting fans decide.

Ted: Hottest artists?

Rio: “No longer the Lady Gaga show,” and Justin Bieber is now a serious heavyweight on the site.

Ted: Any breakthroughs for up-and-comers?

Rio: We’re bringing our research team to investigate this, “can’t point just yet to a particular artist, and particular video” that got expanded by Vevo.  “We’re really trying to drive to that success story.”  For now, its Bieber, Beyonce, Black Eyed Peas, “that strata of popular music” that is driving most of the action.  Right now, it’s a lot of popular music still.

Ted: Great lean-forward.  Is there a lean-back experience?

Rio: Need to improve the quality of the vids – fidelity itself.  Major priority.  First, needed to get “rid of those duplicates” of vids, often bad quality copies.   Shifted to HD, but still “very much an on-demand experience,” but merchandising “playlists” instead of just individual vids.  “That leads to longer engagement,” and “the average Vevo user” has an average of 64 mins of engagement.  But the “lean back is not there yet,” eventually “I want to use it Pandora style,” so an evolution in progress.

Ted: Long form?

Rio: Yes, it’s happening.  Live events w/ AMEX (The National), many events ahead.  Also a two-hour band movie ahead, and lots of longer programming ahead.  Every live event, it’s available immediately after for those that want it.

Ted: Feedback?

Rio: Twitter is the best mechanism for this.  “Very in touch with what people are saying about the business,” and initial complaints surrounded streaming issues, because of “kinks with secure streaming structure,” a major decrease after that.  Major concern is “why doesn’t this work in my country?”

Ted: ex-US rollout?

Rio: Currently in US & Canada, not WW.  International rollout slated for the fourth quarter of this year.

Ted: Apps? iPad etc.?

Rio: Focused on optimizations for browser, for example HTML5 optimization happening now.  But “app is great if the experience can’t be duplicated elsewhere, for example a browser,” or for charging people.  But not charging people, does not believe that payments are around streaming vids.   Putting Vevo “behind a paywall” is not viable, instead focus is “large tent”.

Ted: Missing content?  Are people getting redirected?

Rio:  There is “out of sight search,” which brings stuff outside of Vevo into the results.  Green Day and Madonna will happen by the end of this month, but getting the search upgrade “will happen very quickly”.

Ted: 6 months in, how do you feel?

Rio: Feels good, lots of major questions being tested.  Currently largest in the music category.  Now, the third largest in entertainment.  And, eighth-largest video service in the US. “We’re in that top ten of those video services,” which means they are “in the upfronts” that get about 80-85 percent of the money that is out there.  “To get into that top ten video ranking increases the likelihood that we get one of those upfront buys,” hence the knocking by P&G.

Ted: Did MTV squander this opportunity?

Rio: Wouldn’t put it that way.  MTV always about a lifestyle, and “what is the entertainment lifestyle” that fits into the TV model. MTV is not all about music though, and Vevo “is all about music,” it is “so broad and appeals to so many people,” so not “trying to be all things to all people, because you end up being nothing to nobody.”

Ted: Thanks for a great NARM.