Quick Take: Vevo Buys ShowYou But Will It Seize The Opportunity?

Vevo has acquired video curation/discovery platform ShowYou.  There’s a lot of talk about how this could preface a move into subscriptions for Vevo, given that ShowYou launched subscription functionality back in October 2014, and that’s probably right but there’s not too much about the company that makes it look like a big catch for Vevo. In fact this feels more like an aqui-hire of a start up that failed to live up to expectations than a many-multiples-acquisition of a bright new thing.

Fundamentally ShowYou is a site where you can watch YouTube videos.  There isn’t that much to set it apart from ocean of similar sites that plug into YouTube’s API to create their own viewing destinations on the back of YouTube’s content (which isn’t always even YouTube’s own content).  The ShowYou team will undoubtedly argue that the secret sauce is the way in which it surfaces videos and the Flipboard-like way it presents them.  But Vevo doesn’t really need much help surfacing videos.  Most labels agree that Vevo does a good job of ensuring viewers watch more music videos rather than other YouTube content.  (Which by the way creates an interesting tension with its host platform YouTube).

Standard Freemium Doesn’t Work In Vevo Or YouTube

What ShowYou does have, is its relatively limited real world experience of launching subscription channels, albeit with modest success. The skills and experience of the team in this context are what provide Vevo with their asset.  What Vevo needs to do now though is get the team to push the boundaries, to think outside of the current subscription box.  If Vevo is serious about generating premium income it cannot simply think in standard freemium terms of converting a small percentage of its total audience to a standard price point.  Just as YouTube found with Music Key, dropping a freemium music subscription into a free video environment not only doesn’t work, it misses the point. People use YouTube and Vevo because:

a)    They want free stuff

b)    They want to watch stuff

Separating one from the other though is no easy task.  Especially because of the ubiquitous availability of alternatives.  For example, should Vevo put a video behind a paywall it will be no time at all before a version has appeared within YouTube. Furthermore the fact that ad blockers and YouTube rippers are so heavily used by Vevo and YouTube loyalists means that simply stripping out the ads isn’t enough either.

The Artist Channel Bundle

Rather than just think about how to put a paywall around what it has already got, Vevo needs to think about what new content it can create for a subscription and then how it can best productise that.  A $9.99 subscription simply isn’t going to fly. But cheap subscriptions (e.g. $3.99 a month) and micro transaction products (e.g. Weekend Pass) will.  The most exciting opportunity though is for artist channel subscriptions.  As long as they are done right.  ShowYou wanted to create a portfolio of channels almost like a next generation cable subscription bundle.  If Vevo can take this model and allow users to pick and mix a selection of artist channels, and crucially, swap in and out with ease, then it might be onto something.  For example, a 10 artist channel bundle for $5.99 gives the user 10 artist channel slots that s/he can swap around every month.

This is the sort of thinking that the music subscription market really needs right now. Let’s hope Vevo is about to rise to that challenge.