Mobile Important, But Challenging, Vevo Music Video Service Says

Mobile has been “a bit more of a challenge” for the company than the traditional online sector, said Kisch. But he predicted Vevo -- a joint venture of companies including Sony Music Entertainment and Universal Music Group -- will “continue to make good strides” in mobile, which he said accounts for about 70 percent of Pandora’s traffic. More than 75 percent of Pandora’s total listening hours “occur via mobile and other connected devices,” Pandora spokeswoman Amanda Livingood told us by email.

Vevo is now available on mobile apps for iOS, Android and Windows Phone 8 devices, and the apps have been downloaded 21 million times, spokeswoman Jennifer Press said Wednesday. The company had 394 percent growth in the number of mobile streams in January from January 2012, she said, reaching “an all-time high” of 992 million mobile streams in January. Vevo mobile apps are “most used in and around the home,” she said. “Prime time” (6 p.m. to midnight) “continues to be” the dominant time period for mobile and online consumption, “mirroring peak-viewing times on TV,” she said.

Vevo had a “successful” launch and “globalization continues to be one key driver for us,” Kisch said. The company expects to enter more territories this year, he said. It’s in 10 markets now and its expansion “will continue into the next year,” he said. After Europe and Latin America, it’s eyeing Asia, he said. Vevo launched in France, Italy and Spain in November.

The company is “pretty close to where we wanted to be,” although it would “like to be further along,” said Kisch. Securing rights to the music on the publishing side has been a major challenge, especially in Europe, he said.

Vevo’s service is available on about 25 U.S. websites and it “would love to be able to have” Warner Music “on board,” said Kisch. Warner is taking a similar approach with music videos as Vevo, but has opted to go its own route instead of building “scale” by teaming with Vevo, he said. Vevo was one of several new channels that Roku announced at CES last month, along with Blockbuster Now, Fox, iHeart and Spotify.

The music industry has changed significantly in the past decade, with the arrival of iTunes and declining revenue from record sales, panelists said. Many recording artists now make a significant amount of money from merchandise, said Ken Hertz, senior partner at the Beverly Hills, Calif., law firm Hertz & Lichtenstein, which specializes in media law. Billions of dollars are generated from the perfumes of six recording artists alone, including Jennifer Lopez, he said.

The industry has “left the theft period” when piracy was rampant, said David Israelite, president of the National Music Publishers Association. This is a “new period” in which the main concern is figuring out how to “monetize” music that’s legally delivered digitally, he said. There’s still a major “licensing problem” because of the huge differences in how copyright issues are treated with recordings compared to published music, he said. The industry desperately needs “some semblance” of a “balance” between the copyright rights for each side of the equation, he said. For example, he said about 82 cents of the $1.29 paid for an iTunes download goes to the record label. This is the “bar mitzvah of broken copyrights,” joked moderator Ted Cohen, managing partner of digital entertainment consulting firm Tag Strategic, referring to the 13 years or so in which this situation has existed.

The growth of new technologies has been one factor in the “growing pains” being experienced by the music industry, said Barry Slotnick, a partner at the law firm Loeb & Loeb and chair of its Intellectual Property and Entertainment Litigation division. The people who create the music are often the ones who are thought of and paid last, he said. But one upside for recording artists in recent years is that social media have made it easier for many of them to be discovered, said Marty Diamond, head of the Paradigm talent agency’s East Coast Music Division.

Most streaming music companies face a significant challenge, said NPD analyst Russ Crupnick. A few big brands are doing very well, but everybody else is “stuck” because few consumers know what companies including digital music service Spotify do, he said. Music buyers are also “more distracted now than they have ever been” with popular video services including Netflix and Redbox, as well as mobile gaming, competing for their time, he said. Crupnick predicted there “will be a shakeout,” and said it will be “very difficult” for “second-tier” streaming music players to survive.