The deal, which was actually agreed upon last year but not reported on until today, allows YouTube’s parent Google to sell music video clips from Vevo’s library directly to advertisers, reports Recode. Vevo is the world’s biggest music video website and is owned by two of the world’s biggest music labels. Before the deal, Vevo had first dibs on selling clips from music videos to advertisers. But that’s all changed now as both Google and Vevo will be allowed to sell the clips. As Recode notes:
The move makes plenty of sense. Google’s team of 15,000 sellers will get their hands on valuable inventory, which should theoretically generate higher ad sales for the music videos. And since Google and Vevo split the ad revenue for music video sales, no matter who makes the sale, there should be upside for both Google and Vevo’s music label owners.
After Recode broke the story, YouTube’s chief business officer Robert Kyncl told the site: “The availability of Vevo in Google Preferred [the search giant’s premium ad service] enables UMG, Sony, and Vevo to participate in YouTube’s most premium inventory sold to advertisers. It also increases the sales force deployed against music videos and maximizes revenue for artists and songwriters.”