YouTube is set to make another big investment in a content partner. This time around it’s Vevo, the music video site.
Google, through YouTube, is in the final stages of investing in video site VEVO, reports AllThingsD. Vevo has been a YouTube content partner for a while now and hosts many celebrity channels on the video sharing platform.
If it happens, it will be the second time in the last year that Google has invested directly in a video company that relies on YouTube for distribution. In May, Google put money into Machinima, the Web video network aimed at gamers.
VEVO was founded in 2009 and is a joint venture music video website operated by Sony Music Entertainment, Universal Music Group, and Abu Dhabi Media with EMI licensing its content to the group without taking an ownership stake.
According to the report, the deal will see VEVO possibly handover one-third of its revenue to YouTube and more than half to the music labels. The company brought in US$150-million in 2011 with a 2012 estimate of US$280-million. VEVO’s original deal with YouTube was previously set to expire at the end of 2012.
This investment is also noted to be considerably larger than the one the video-sharing site made on Machinima last year last year, which was reported at US$35-million.
Though both companies have signed off on the deal and have also agreed to a renewed distribution deal that includes long-term licenses for the videos, there could still be some hiccups along the way.
“For starters, the deal is supposed to get done at the same time that YouTube signs separate agreements with Sony and Universal, which cover subjects like user-uploaded videos that incorporate music the labels own. And relationships between the two labels — and between the labels and YouTube — have been rocky at times,” says AllThingsD.
Reportedly, VEVO is also exploring alternate distribution deals with Facebook and MTV.
The company has grown immensely to become YouTube’s top content partner with an estimated 52-million unique viewers and 592-million videos watched, according to comScore. VEVO.com is currently available in 10 countries, and its videos are accessible in more than 200 countries through its YouTube partnership.
Reference: Are YouTube investing in VEVO?