YouTube and Vevo in product placement

October 15, 2017By

Google bought Youtube in 2005 and this started the process of the music video industry leaving the main stream television channels like MTV and going on-line. The American multinational video hosting service Vevo was created in 2009 and is a music video hosting service jointly owned by the Universal Music Group, Sony Music entertainment and the Warner Music group.

Partnership of Vevo with YouTube

Vevo hosts its music on YouTube and has a very positive attitude towards product placement. According to Vevo’s CEO Rio Caraeff, the aim of the company is to enable product placement in music videos. The influence of Vevo on product placement in music videos has been impressive. In 2010, despite an overall drop in product placement of 2.8% to 3.6 billion dollars, this trend was reversed in music videos with an increase from 15 million to 20 million dollars.

Musicians are now able to produce videos and do not feel restrained, like they did when MTV prohibited any blatant plugs for merchandising that wished to be incorporated in their videos. This new sense of freedom has now changed the music scene, as both artists and advertisers are enthusiastically taking advantage of this more relaxed attitude towards raising revenue. The amount of most viewed music videos on YouTube far exceeds the exposure that earlier music experienced on television channels. Lady Gaga music video “Telephone” has been viewed 108 million times on YouTube, and this is great news for the companies which have had their products placed on the video.

Lady Gaga’s music video “Telephone”

It is clear that product placement will remain the major part of music videos. The continuing decline in record sales and royalty profits makes product placement an attractive source of income for the artists. The ever growing audiences on the web make it also an attractive proposition for brands.

However, over time the way funds have been raised has evolved, and although the use of product placement may appear to have simply changed from music videos on MTV to their appearance on Vevo and Youtube, this is not quite as simple as it appears. The major difference is that the music videos on Vevo and YouTube are a combination of advertising and product placement. Advertising comes from trailers that are played before the video, or from banners that appear during the music video. Revenue from the advertising does not go to the artists, but is shared between Google and Vevo. Although product placement is a valuable source of income for artists, not every band takes advantage of this in their music videos. In the top 100 selling records of 2014, product presentation was evident in 39 of the videos. The majority did not and some, such as Radiohead and Coldplay, have made it a moral issue not to exploit product placement.

However, few established and emerging artists can afford to ignore the financial rewards on offer by not taking advantage of product placement. This is for sure, but whether it will be done in the same manner in the future as it is now remains to be seen.

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