Some transformative things have been happening in the media world via Youtube lately, and a lot of them are causing some major moves to be made by some key folks in the music industry. This week marked Youtube’s announcement of new professionally produced content partnerships with different key figures in entertainment. Online tech magazine, All Things Digital reported that Youtube has advanced $5 million in funding to develop a specific set of weekly programs. Much like Vevo,Youtube’s online music video distribution channel, those programs are intended to then make advertising revenue that Youtube will split with the specific content makers after production costs are covered. Businessweek declares Madonna, Jay-Z,and Pharrell Williams as some of the music heavy weights chosen to be part of this new content venture. It is easy to see that this will clearly cause a ripple effect on how commercial media is produced, distributed and consumed by future audiences.
The ripple effect of this “Vevo like” business model has already been warmly embraced by several indie music labels. The New York TImes reported earlier this month that Merlin, a consortium that represents approximately 1,400 independent labels around the world, recently solidified a licensing agreement with Youtube to provide those label’s with “Vevo like” revenue building opportunities when publishing their music videos and songs to Youtube. This is significant because, prior to deals like this, the lion’s share of Youtube’s music related revenue was made most often by Vevo. This is because Vevo was the first to take advantage of such a deal with Youtbe when they were founded in December of 2009. For nearly three years, this gave a digital market strangle hold to Vevo’s partnering record label conglomerates, Universal Music Group, Sony Music Entertainment, Disney Music Group, and EMI.
Now that several of music’s “little guys” have been offered the same kind of partnerships with Youtube, and their parent company Google, much of the competition in the online aspects of the music world’s playing field has been perceivably leveled. If this continues to happen for content making in general, there’s no reason not to assume that the same kind of leveling couldn’t also happen in the current highly conglomerated worlds of movies and TV. This is important to note because, just as MTV’s “killing of the radio star” started trends that changed how film and TV production was made and consumed in the cable landscape, music once again is helping spearhead a wave of media evolution that we can only begin to anticipate. Also, if this pattern unfolds to be a standard model for online business in entertainment, the way it once was exclusively for the likes of Vevo and a few other lucky giants, Google’s playing field evening stregth could calculatingly make them the media company that media of any size need to partner with in order to even have an option to compete fairly.
Perhaps there is no coincidence in the fact that different aspects of all of this was first released to the press at the same time. Youtube’s Indie empowering deal with Merlin was announced in The New York Times on October 19th, the same day of the All Things Digital AsiaD Conference in Hong Kong. As we originally reprted, it was at that conference where Google first announced their plans to make their own digital music store ,”with a twist”. There does indeed appear to be a “twist”, but odds are, it goes well beyond the development of a simple music store. There’s a good possibility the surface has only been scratched. It’s a good thing that Google’s informal corporate motto is “Don’t be evil”.