Google is reportedly close to buying a stake in music video site Vevo, as it looks to further monetise its video assets.
AllThingsD cites ‘people familiar with the matter’ that YouTube and Google have agreed to buy a minority stake in VEVO and are currently waiting to finalise the deal.
According to the report, the deal will see VEVO possibly handover one-third of its revenue to YouTube and more than half to the music labels.
The company had revenues of $150-million in 2011 with a 2012 estimate of $280-million.
VEVO has been a YouTube content partner for a while now and hosts many celebrity channels on the video sharing platform. Its original deal with YouTube was previously set to expire at the end of 2012.
VEVO was founded in 2009 and is a joint venture music video website operated by Sony Music Entertainment, Universal Music Group, and Abu Dhabi Media with EMI licensing its content to the group without taking an ownership stake.
“For starters, the deal is supposed to get done at the same time that YouTube signs separate agreements with Sony and Universal, which cover subjects like user-uploaded videos that incorporate music the labels own. And relationships between the two labels — and between the labels and YouTube — have been rocky at times,” says AllThingsD.
Reportedly, VEVO is also exploring alternate distribution deals with Facebook and MTV.
Last year, Google upped its investment in some of YouTube’s existing video channels and the firm has also invested in gaming video site Machinima, for $35 million.
Read the full AllthingsD report here
