MUMBAI: Search giant Google Inc’s video sharing site YouTube has renewed its contract with music video and content distributor Vevo.
Under the new deal, parent company Google will get around 7 percent stake in Vevo, retain Vevo videos on YouTube and invest $ 40-50 million on Vevo.
Vevo is owned jointly by Universal Music Group (UMG), Sony Music Entertainment and Abu Dhabi Media Group. It is the third most-watched video site in the US with 52 million viewers for the month of March after Google, with 153.9 million viewers, largely through its YouTube operation, and Facebook, with 63.8 million viewers.
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Vevo will utilize the funds to expand its international presence and invest in creating original music-related content to augment its growing library of official music videos from Sony and Universal, but not those from Warner Music Group, which operates competing YouTube music channels, report said.
Google’s investment will also help Vevo build its international presence. Following its launch in the Netherlands, it now operates in to 11 countries including the US, Australia, Brazil, Canada, France, Ireland, Italy, New Zealand, Spain and the UK. VEVO has also been expanding its product offerings beyond music videos to apps for iOS, Android and Windows Phone Xbox, as well as music channel VEVO TV.
On Google’s part, the agreement has ensured Vevo won’t sign a content deal with Facebook. The two companies have also negotiated YouTube’s share of ad revenues from VEVO’s video stream, which is the top channel partner on YouTube.
“We made an investment in VEVO. We are excited by their future prospects and to provide YouTube users with the best possible music experience,” said YouTube in a statement.
