The Daily Swarm

Photo via CNet

Reuters:

In a grainy black and white Web video, similar to footage from an in-store security camera, you can make out the muscular frame of rapper 50 Cent, smashing dozens of TV sets with a baseball bat.

None too subtle in its message, the clip is part of a advertising blitz by Vivendi’s Universal Music Group and Sony Music Entertainment, two music giants hoping that their new website, Vevo.com, will finally put to rest any idea that TV is a place for top flight videos.

Launched on Tuesday, Vevo offers music from both Universal and Sony, as well as EMI Music, and contains programing from CBS radio stations and Last.fm, both owned by CBS Corp. In all about 30,000 videos are available.

The idea is to create an MTV for the digital age, a music site where all the latest and archived videos can be found. It’s a business model similar to that of Hulu, the popular TV and movie site.

Vevo’s debut comes as music companies are losing revenue and profits at a rapid tick due to the combined impact of falling sales of CDs, online piracy and evolving methods fans discover new music.

Indeed, Vevo launched with the support of nearly 20 new advertising partnerships, including names like Colgate-Palmolive Co., MasterCard Inc., McDonald’s Corp., and AT&T Inc.

These advertisers will pay a near premium rate of around $20 to $45 for every 1,000-page views, Vevo Chief Executive Rio Caraeff said in an interview.

CNet:

“We’ve come here to mourn the death of an old cash cow that was the music industry,” U2’s Bono told the audience during his speech.

“Let’s hope Vevo can help salvage something that used to be amazing,” said singer Mariah Carey.

If you’re anti-copyright and this makes you long for the days when Google and YouTube used to wave the Digital Millennium Copyright Act in the faces of Viacom, NBC Universal, and others that demanded YouTube remove unauthorized film and TV clips from its site, well, it’s time to move on.

paidContent:

The Vevo launch party has been going on for an hour and executives and stars are ready to take the stage. I spoke briefly with Google (NSDQ: GOOG) CEO Eric Schmidt, who told me that Vevo, which is a joint venture between Google’s YouTube and the major record labels, will “revolutionize the music industry by finally allowing it to make money online.” As for how, he told me to wait and see, but he added that advertising, merchandise and ticket sales are part of the mix. As I was being ushered out of the VIP section, I manage to talk with artist Sheryl Crow. Asked what impact Vevo could have on the industry, she said, “Nothing will ‘save’ the music business, but every little thing helps. And anything that puts money in artists’ hands for the work they do is a good thing.”

Vevo CEO Rio Caraeff said Vevo will manage the ad inventory and sales, while YouTube will remain a separate area for fan-based music videos. “With YouTube’s scale and metrics, the music business has a channel that will allow them to realize significant revenues.”

For more than a year, YouTube’s strategy has been to strike partnerships with the top studios, record companies, and TV networks.

YouTube has content deals with MGM Studios, Sony Pictures, Lionsgate, CBS (parent company of CNET), and all four of the major recording companies.

Meanwhile, Hulu could pose threat with the music labels. The site could capitalize on any lingering distrust of Google within the sector. Conspicuously missing from Vevo’s launch party was Warner Music Group CEO Edgar Bronfman. A feud between Warner and YouTube led to Warner’s content being pulled from the video site for nine months before the companies made up. But Warner has so far declined to join Vevo.

In addition, EMI recently a music-licensing deal with Hulu. EMI clips will appear on both Hulu and YouTube.

Digital Music News:

So, build it and they will come? YouTube is already hosting and promoting better-quality Vevo vids, and encouraging fans to make the upgrade. And, for those that like music videos – like millions of surfing and sampling fans – then Vevo is a great place to hang. Vevo is not an HD destination – not yet – though the videos are higher quality, widescreen and portable, and results are much more predictable. This is a controlled environment, and a far more reliable experience.

That said, Vevo still has some delivery issues to iron out. Server capacity may need to be ramped up, and early-stage bugs were hard to ignore (registration issues, occasional ‘internal server errors,’ and random 404s among them). Separately, EMI Music videos are also absent (Katy Perry, Coldplay, Robbie Williams), despite a late-stage licensing agreement.

But outside of the execution issues, the more important question surrounds advertising valuations. Namely, will CPMs elevate to expectations, or get dragged by generally weak advertising values online? Sources to Digital Music News note that Vevo CEO Rio Caraeff is pushing for CPMs north of $35, an astronomical valuation by most standards. Whether Vevo can attract better valuations is the multi-million dollar question, and another big monetization experiment for the music industry.

At the onset, Vevo backers and supporters showed confidence. A splashy launch party in Manhattan on Tuesday night featured glitzy names like Bono, who declared Vevo a savior of the industry. Others on hand included John Mayer and Sheryl Crow, as well as executives like UMG chairman Doug Morris and Google CEO Eric Schmidt. This is the future that is already getting a toast.