Report: UMG Reconsidering Its Vevo Investment
July 12, 2012 at 3:54 AM (PT)
DIGITAL MUSIC NEWS is reporting, "UNIVERSAL MUSIC GROUP is now 'actively reconsidering' its major investment stake in VEVO, according to a pair of sources discussing the matter with DIGITAL MUSIC NEWS. One source, an executive at UNIVERSAL MUSIC GROUP who insisted on confidentiality, stressed that discussions are 'still pretty early stage,' 'based on a lot of different considerations,' but 'definitely on the table right now.'"
Earlier this week, VEVO was reportedly close to retaining investment banking firm ALLEN & CO. to help it raise upward of $100 million to fund its global expansion (NET NEWS 7/9).
In MAY (NET NEWS 5/31), ALL ACCESS reported both GOOGLE CEO LARRY PAGE and FACEBOOK's MARK ZUCKERBERG were exploring an investment in VEVO as part of a broader partnership with the music-video service. Sources said the search giant and the social network have held talks with VEVO -- the digital equivalent of MTV -- about buying an equity stake as they each compete to land an ad pact with the venture.
As for UMG's current thoughts on VEVO, DMN notes, "former UMG chairman DOUG MORRIS is widely credited with conceptualizing the idea, based on a desire to finally monetize music videos in the post-MTV era. More than two years and $200 million in revenues later, the idea seems to be lifting off the tarmac. But MORRIS is now with SONY MUSIC, and the situation at UNIVERSAL is dramatically different in 2012. Currently, the divestiture discussions at UMG are happening at a fairly high level, with owner VIVENDI either a direct participant or overshadowing presence in the strategic thinking."