Analysis: What Facebook could gain with Vevo
Facebook and Vevo have met at least twice and the most recent talks took place earlier this month about bringing the popular music video service to the social network’s platform and sharing ad revenue, according unnamed CNET sources.
Scoring a deal with Vevo would be a huge win for Facebook over Google. The social network drives a lot of traffic for videos around the web, but is not a video destination itself. Vevo is an industry-backed website for music videos that are also syndicated on YouTube. According to CNET, the discussions are very preliminary — Vevo’s contract with Google is not up for another year yet – but could result in an ad revenue sharing model similar to what Google and Vevo have now. In November 2011, the NY Post reported that Vevo was looking to renegotiate its deal with Google, which since 2009 has given the company 35 percent of its revenue from the ads played before Vevo’s videos on YouTube.
According to ComScore, Google was the top online video content property in December with 157.2 million unique viewers, mostly on YouTube.com. Vevo ranked second with 53.7 million, and Facebook was fifth overall with 42 million. Vevo, though, is YouTube’s top channel overall, with over 53 billion views generating major revenue for both companies.
What Google could lose, Facebook stands to gain and possibly improve upon. Although YouTube is far and away the most popular video site in terms of unique viewers and time spent per viewer, it has not capitalized on its opportunity as a social network. There is little incentive for users to log in to YouTube and the site is filled with spam and hate from anonymous commenters. Google is likely looking for ways to incorporate Google+ to address these issues, but it’s interesting to see how Vevo is already using Facebook on its standalone site.
Vevo has Open Graph integration, which means that when users watch videos on Vevo.com, the activity shows in Ticker, Timeline and News Feed. When people watch the same videos on Vevo’s YouTube channel, the activity is not shared on Facebook. Vevo.com also uses the Facebook comments plugin, which surfaces comments from a user’s friends first and helps demote spam. Vevo.com similarly includes Like buttons that YouTube does not.
The social network currently offers video ads as a premium unit on the homepage, but because the units are small and opt-in, they are not ideal for advertisers who can get guaranteed views on other sites that run pre-roll ads. Facebook wants to preserve the user experience by keeping ads minimal, but billions of Vevo views suggest many users will accept these ads. A partnership with Facebook could allow Vevo ads to play directly in News Feed and Timeline. Currently Vevo.com links do not embed video on Facebook. Videos from Vevo’s YouTube channel do play directly within Facebook, but do not include pre-roll ads.
What is unclear, though, is how deeply the social network would incorporate music videos into its core product. For instance, Facebook could make Vevo videos discoverable from search as opposed to requiring users to visit a canvas app. The company positions itself as a platform for others to build upon, not a media site like MySpace, but to compete with Google, Facebook has to offer Vevo a bigger or at least more profitable audience.