Imagine not being able to watch YouTube videos of Justin Bieber, Lady Gaga, Rihanna, or Eminem? It could happen if Vevo and Google don't come to a better agreement soon. Vevo and Sony Entertainment are threatening to leave Google's video site and take the music they own with them. It has been reported that the negotiation process has been slow and Vevo is getting impatient.
Vevo currently handles the sale of all their ads and gives a portion to Google. However, the company has said that the amount they are giving to Google is just too much and it needs to be a lower amount. Vevo is the largest and most watched channel on YouTube, so leaving and taking all the videos would be a big blow to Google's bottom line. So, it might seem that Vevo has the upper hand in this situation, not so.
Google is the largest and most used search engine and it's video site is the second largest searched website in the world. Obviously Google gives preference to its own video site in search engines and if Vevo left, they would likely not be found very quickly through a Google search. Finding a new home for their videos would likely cut their views and therefore cause the company to reduce the fees they charge for advertising.
These are two companies that definitely need to work it out and find a win-win solution. If they split there will not be a winner. It is likely that Google would far better than Vevo if a split occurred, but neither company really wants to find out if that is true. Both companies are continuing to come to the table and talk.
More and more businesses are starting to see the benefits of Google ad videos and using YouTube videos in general for marketing. Within less than five years, video is expected to be the most searched item on the web. Although Google is the leader in searching and video, that doesn't mean new competition couldn't put a dent in Google's bottom line. While the Vevo/Google negotiations are going on, other companies that are looking to have a greater web presence may be in talks with Vevo as well. Vevo needs to have discussions with the bigger businesses they have advertising deals with, they need to listen to them and make the best decisionÂ—stay or leave. If Vevo leaves, the good news is that they would still have a Web presence so people could still see all their favorite music videos. Although it is likely that the people that watch the ads and videos would prefer they stay right where they are.
Do you think anyone else can really compete with YouTube? If so, what would get people to hop to another video site over Google's video site?