Resnikoff’s Parting Shot: The Value of a Music Video

Give Doug Morris some credit.

This is not a popularity contest, and years ago, Morris had the balls to play tough with music video sites and demand compensation.  The model of the 80s and 90s is now just a crusty antique, and days of promo-only videos needed to end.

Yank-downs of huge catalogs are nothing new, and certainly a gun-in-the-holster for major labels.  But also give major labels credit, for that matter, for eventually forging a workable model around online music video plays.  Hardly a perfect plan or execution – that’s for sure – but at least music fans are (mostly) not getting sued for incorporating music into their uploads.

Instead, their YouTube creations are getting rev-shared and oftentimes overlaid with upsells from iTunes and other partners.  Embracing technology, what a concept.  But the question now is whether labels can generate meaningful CPMs and revenue streams from their massive video catalogs.  Despite that fact that music videos themselves are getting viewed more than ever before, often at unsatisfactory valuations.

This is the struggle that Universal Music and Vevo continue to endure.  And, the motivation for aggressive syndication negotiations with MTV and similarly-situated properties.  Several months ago, Vevo chief Rio Caraeff told Digital Music News that he now wants consistent CPMs “north of $20,” and he also wants success without “teeth whitening and liposuction” ads.

Is that asking too much from a freebie-loving web?  Well, higher-end brands have jumped aboard – look no further than Thursday night, when American Express locked arms with YouTube and Vevo to deliver Arcade Fire live from MSG.  But the bigger valuation vision requires scale and total dominance over rival providers and experiences.  It demands serious reach into the hearts and minds of the video-watching demo.

That means aggressive syndication, and a huge button that instantly puts videos and their itinerant advertisers onto millions of screens.  YouTube is obviously the biggest partner, though Vevo has also roped syndication deals with AOL and CBS Interactive, and remains in discussions with Yahoo and Univision.  “Our artists are enjoying tremendous exposure on Vevo on YouTube and Vevo.com, and will enjoy even more as Vevo continues to complete syndication deals supplementing the existing arrangements with leading destinations as AOL and CBS Interactive,” UMG’s Peter Lofrumento told Digital Music News on Friday.

But MTV executives, speaking to Digital Music News, spoke of onerous syndication demands that not only include the incorporation of the player, but also surrounding ads traditionally served by MTV Networks.  True?  Usually, these standoffs result in something workable, though it all still needs to “feel like free” to the watching fan.  All while generating a decent price behind the scenes.

Is that asking too much?

Paul Resnikoff, Publisher