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The partnership between Google and the major music companies signify a shift regarding the outlook on piracy and catalog availability. Record companies hope Vevo will enable them greater control and prove capable in attracting its own audience. Both Vevo and Youtube hope to increase ad revenue by gaining higher CPMs through the deal. Warner Music Groups unwillingness to join Vevo reflects the labels on going reluctance to embrace digital music. WMG continues to promote individual artists instead of its entire catalog. The label has paired with Hulu as a showcase for its select talent.

Universal Music Group remains the pioneer behind digital experimentation. Its leadership in Vevo and its early signing of distribution deals with the free-to-download services reinforcing the fact. UMG’s approach to digital experimentation seems justified compared to the conservative approach of WGM. In three of the past four quarters UMG’s digital revenue as a percentage of its total revenue has been much higher than that of WMG’s.

Acquisitions on the part of Apple and MySpace forecast future availability of streaming and cloud-based services. Apple’s acquisition of Lala indicates future plans to release a music service that makes full use of the iPhone. MySpace continues to gravitate toward a music portal strategy with the purchase of Imeem. MySpace was likely attracted to Imeem not only for its technology but also for its current audience (around 19 million unique monthly users).

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The new video site Vevo had a rocky launch on December 8 with multiple site crashes due to the unexpected quantity of new users. Despite the false start it seems to be an impressive looking site that helps users track down videos they want without having to sift through a lot of unrelated content. Vevo isn’t a YouTube competitor, although it saves users time from sorting through karaoke videos of the latest singles in order to find official music videos. YouTube hosts the video files for the site created through a partnership between UMG, Sony and the Abu Dhabi Media Company. The plus for businesses? Ad-supported videos, which are able to lure in music fans. Things aren’t looking too shabby for artists and brands either, as it is certain that connection with fans on the web is important in today’s market.

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Universal Music Group and Google are teaming up to create an online service called Vevo. They are hoping this service will generate more revenue for UMG's music video content. Vevo is expected to launch by the end of 2009, and will provide to YouTube, Yahoo, AOL, and MTV.com.
"The idea behind Vevo is to create a scarcity of advertising inventory in order to drive up rates... [Vevo will be] the only entity to negotiate with advertisers that wish to buy space on music videos." UMG and Google plan to sell ads and then split the profit equally.
Doug Morris and Eric Schmidt, UMG and Google CEOs, respectively, believe this is a new business model that will change the "economic structure of the music industry" and prove to be financially successful.