The boom in online video is showing no signs of slowing down. eMarketer estimates predict that for 2013, US advertiser spending on the medium will eclipse $US4 billion, rising to $US8 billion by 2017. In Australia, the Interactive Advertising Bureau estimated that for the 2013 financial year domestic spending on online video was $A112 million, growing by over 40 per cent over the year prior. In the same report, out of the marketers surveyed 9 out of 10 suggested that their spend on online video had increased in the past 12 months.
While the appetite for online video is increasing among marketers, one of the largest barriers to increased investment is the lack of premium inventory. One of the players best positioned to play a central role in the emergence of online video both in Australia and globally is VEVO.com.
VEVO in Australia is represented by MCM Media, which also has its own suite of media properties such as The Hot Hits, Take 40 and the DEN. MCM was also behind the redevelopment of the ARIA Charts digital presence. VEVO and MCM officially partnered up in early 2012, a deal driven by VEVO SVP Nic Jones (a past managing director of News Interactive here in Australia) and Simon Joyce (MCM’s CEO). Almost two years into the partnership, the results have been significant, both in terms of consumer uptake of the platform as well as advertiser support.
Lachlan Brahe is the commercial director at MCM. He has been enthused at the response to the VEVO offering across the board, espiecally by consumers on the go. He came to MCM in 2012 after a decade in various roles Harold Mitchell’s digital agency emitch in Sydney, which included a stint as the agency's managing director.
“What has been interesting to observe over this period has been the uptake of the VEVO service on mobile devices. Mobile and tablet now accounts for over 30 per cent of monthly video streams. We’re generating over 80 million streams a month too, which is slightly ahead of our audience growth. Revenue expectations are very much in line with what we expected as both a function of audience growth and our focus on maintaining our position as a premium video offering.”
Being positioned as ‘premium’ is key for VEVO. For online video, the aim is to ultimately pull revenues currently allocated to the safe harbour of broadcast television. Broadcast TV offers consumers a number of attractive benefits: audience scale, content investment, and audiences with passion around the programming.
To date, a lot of online video inventory has struggled to offer all three of these. YouTube has scale, but in most instances lacks content investment and passion around programming and personalities. The TV networks' catch-up services offer strong content but a lack of scale. Across the web there is plenty of video inventory, but most of it lacks the key elements advertisers link to broadcast TV.
VEVO feels it is unique in this area, and large-scale advertiser support from the likes of Ford, Sol, Unilever and the Australian Government demonstrates the company may be onto something. “We’re one of the few media sources that have taken the time to define what ‘premium’ actually is,” explains Brahe. “We believe it’s content for which consumers will hunt, it’s content that isn’t replicable and can’t be imitated, it’s content that is made with the highest production standards in mind. We estimate that we incorporate approximately $250 million worth of new material into VEVO each year.”
The fact the service is focused on music, considered by many to be ‘the universal language’, is a huge benefit, ensuring no shortage of consumer interest as well as regular new content.
According to Brahe, “everyone loves music” and that “you don’t turn 50 and stop liking music”, although it's likely that "you turn 50 and stop understanding dubstep. There’s two ways of considering this: Firstly, VEVO is where major artists are releasing their new material. We’ve just seen Miley Cyrus’s new track Wrecking Ball hit 100 million views within six days. If you’re the type of person who wants to see the latest and greatest in music, you’re the type of person who will be accessing VEVO on web, app and any other digital screen you can get your hands on. “
This has resulted in is a dramatic increase in original content at VEVO, ranging from the live concert Unstaged series with the likes of Kings of Leon and Coldplay in conjunction with AMEX, to the fashion-focused VEVO Stylized, the hometown-focused Area Codes (where popular music acts take the viewer on a tour of their hometown) and Go Shows, which see acts play surprise live shows in unusual locations.
What VEVO is providing is an enhanced version of what music TV shows used to provide: high-quality, music-focused programming. This raises the question: in five years will we see VEVO not just on digital channels, but perhaps on broadcast channels as well?
“I actually see things going forwards, hurtling forwards, in fact” explains Brahe, “especially in the areas of entertainment content [such as] music, movies and TV Shows. There’s every reason to expect VEVO on every screen available. You could see VEVO on Pay TV and [free-to-air TV]. You can already see it on web, mobile, Youtube, AppleTV, smart TVs, games consoles and cinemas.”