Here's the pitch: string together 24 hours a day of curated music videos, hire hip experts to act as on-air hosts, broadcast it all to audiences wherever they can watch, and support it with ads and fees from pay-TV operators. Sound familiar? It should, because that was essentially MTV's business plan in 1981 and it worked brilliantly. And now, in a classic "what's old is new again" play, it's also the plan for VEVO TV, a new network that VEVO announced yesterday.
But wait, haven't viewers moved on from linear broadcasts to all on-demand behaviors? Yes and no. While on-demand's surging popularity is indisputable, the world isn't monolithic. There are times and situations where a good old curated broadcast stream is actually quite valuable to audiences. That's the bet that VEVO is making with VEVO TV and it seems pretty smart.
VEVO TV starts with significant advantages as VEVO itself already has a catalog of thousands of music videos, significant in-house programming/ad sales expertise and a huge audience. No wonder that CEO Rio Caraeff told Bloomberg that the cost of starting the network was minimal, requiring only 6 new employees. In fact, the heavy lifting to launch VEVO TV likely had more to do with tech development (multicast live streaming with Level 3, app updates, ad insertion, etc.) than anything else.
Go to VEVO.com today and you'll see a daughter window in the lower left with the VEVO TV stream. Click on it and after signing in the linear feed takes over the screen. Music videos play back to back with ads periodically inserted. An hour-by-hour programming schedule is available, you can save videos to playlists to watch later and you can share with others. In addition to online, VEVO TV is also available on iOS, Android, Windows Phone, Xbox and Roku.
VEVO TV is a natural extension of VEVO in the online environment, and with connected TV usage proliferating, it gives VEVO a another entry into the living room, particularly when viewers want a more passive experience.
The only piece that's confusing to me about VEVO TV is the company's aspiration to charge pay-TV operators to carry the new network. Pay-TV operators wouldn't pay for something that is freely available online; that's the whole idea of TV Everywhere' authentication model. So VEVO would almost certainly have to create a second, differentiated VEVO TV network for operators (one analogy is what Hulu Plus is to Hulu.com). Even then, getting budget-minded operators to pay for anything new these days (outside of sports, of course) is a Herculean challenge.
More interesting is how VEVO TV could potentially be packaged with other OTT services like Netflix and Aereo to create a low-cost bundle for prospective cord-cutters. Just as MTV was once core to driving pay-TV subscriptions, VEVO TV could potentially be part of driving an OTT world.