Vevo looking to introduce paid subscription model

CEO Erik Huggers said despite strong advertising sales for the music-focused network, "just having an ad-supported model isn't sustainable."
February 18, 2016

At some point in the future, music video network Vevo will be introducing a paid subscription service.

The what-and-when details of the service are yet to be determined,

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but at his Feb. 17 Code/Media conference appearance in Dana Point, Cal., Vevo CEO Erik Huggers said his company is moving in that direction.

“You hear this throughout the industry that the move toward subscription, a more premium product, that’s something we’re very interested in and very much working towards,” said Huggers (pictured) in a video of his appearance.

He said that Vevo is looking to diversify its revenue model.

“We believe in a dual revenue stream,” said Huggers. “We believe in a revenue stream that is both ad-supported — we’ve got a phenomenal sales force, we knocked it out of the park in 2015, absolute biggest year in Vevo history, and so we want to build on that strength, it’s a real strength that we have, it’s important, and the second piece would be a pay model.”

However, Huggers refused to provide any details on what the paid-subscription model would look like, or when it would launch.

Interestingly, despite Huggers’ assurance that Vevo “knocked it out of the park” in terms of sales in 2015 — and the fact that Vevo’s network streams more than 17 billion videos monthly — he doesn’t seem optimistic that his business can survive on ad sales alone.

“Just having an ad-supported model isn’t sustainable in the long run,” he said.

Huggers is not alone in that view. Across the digital video industry, many are looking at alternatives to ad-supported models. The most high-profile shift, of course, is YouTube, which launched its ad-free subscription service, YouTube Red, in October 2015. On top of offering users an ad-free experience, the service also includes premium content from creators such as PewDiePie, Lilly Singh and Rooster Teeth (Huggers did not say whether or not all content would remain the same across Vevo’s free and subscription services).

Vimeo CEO Kerry Trainor has also gone on record saying that there is an increased appetite for premium content across platforms like Vimeo and Vessel. In a previous interview with StreamDaily, Trainor said creators are “trying to often tell intricate stories…and we feel that deserves to be presented in an environment without the intrusion of interruptive commercial messaging. We believe viewers are passionate enough to be able to pay for it.”

Whenever Huggers decides to introduce the new service, he is adamant that Vevo will not abandon its current subscription-free model.

“There will be absolutely free Vevo, yes. It’s an important piece of the puzzle.”

Vevo, co-owned by Universal Music Group, Sony Music, Adu Dhabi Media Company and Google, counts YouTube as its chief platform, but provides streaming services through more than a dozen other platforms including Roku, AppleTV and Xbox 360.

Huggers, a former BBC and Intel exec, was appointed Vevo

CEO in April 2015.

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One Comment »

  • Alex Farber said:

    Isn’t Vevo basically an aggregator of music videos? What are its content spend costs?!

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