Vevo Restructures Assets Before Sale
July 31, 2014 Leave a comment
If you’ve ever watched music videos online, you’ve likely watched the majority of them on Vevo. The video hosting service, which is partners with YouTube, reportedly generates six billion views each month, and is considered a crucial factor in YouTube’s success, and to that of the music industry at large.
Over the last few months, many speculations have been made about how the popular video company is planning on putting itself up for sale. As Forbes contributor Hugh McIntyre notes, “Talks of video platform Vevo putting itself up for sale have been reported for months now, and all signs are continuing to point towards what looks to be a sizeable transaction.” Vevo is estimated to be worth between $700 million and $1 billion, so “sizeable” is certainly one way to describe the high stakes future sale of the video streaming giant.
According to Re/Code’s Peter Kafka, “Vevo is a joint venture, controlled primarily by Universal Music, the world’s largest music label, and Sony Music.” He also notes, “Abu Dhabi Media is also an investor, as is Google, whose YouTube site is Vevo’s primary distribution network.” Because Vevo is controlled by so many music industry heavyweights, business insiders are speculating that the company is going to try to do a bit of internal restructuring before it officially goes up for sale. Kafka explains how despite continual interest from potential buyers, investors have inevitably refused to purchase a stake in the company unless its current owners work on making Vevo even more profitable.
Potential buyers include Google, which already holds a stake in the company because of its partnership with YouTube, as well as DreamWorks, Liberty Media, and Guggenheim Digital Media, among others. Vevo has already found immense success in the realm of online music video streaming, and with music videos making up 40% of what people watch on YouTube, it’s no wonder that major companies are looking to invest in a rapidly growing media sector.
Vevo has recently confirmed that some restructuring within the company is going to take place, but there are no reports yet about who is most likely to invest in the company after it officially puts itself up for sale.