The future of online music-video hub Vevo and its relationship with YouTube could be wrapped up in the next two weeks.
Sources say both parties want to reach a distribution agreement before year end. Vevo’s contract to provide music videos to Google-owned YouTube ended Dec. 9, but the two are continuing to talk.
One option is for them to conclude a new deal; another is to simply extend the old one.
An issue being discussed is the size of the platform fee paid to YouTube for hosting Vevo’s highly trafficked content.
YouTube gets to take a percentage of ad revenue between 30 percent and 50 percent from sales, while Vevo gets to keep ad revenue it sells on Vevo.com, its own site.
Google’s YouTube currently charges a platform fee of around 40 percent of all revenue generated by Vevo. That’s something its music industry owners are eager to change.
Vevo is owned by Universal Music Group, Sony Music and Abu Dhabi Media Group. Warner Music Group licenses its own music videos via a deal with Viacom’s MTV.
“While we don’t comment on individual negotiations, we always hope to renew our relationships with valuable partners,” Google said in a statement.
A few months ago, sources say, Google indicated that it might like to acquire Vevo outright, although that offer was turned down.
The owners of Vevo, run by CEO Rio Caraeff, believe that they should keep the entity and build it further for a bigger valuation down the line. “They’d like to grow it a little bit more,” a source familiar with talks said.
A Vevo spokeswoman declined to comment.