Warner Music strikes online ad deal with MTV
Warner Music Group hears sweet music in MTV’s online advertising network.
The music conglomerate on Wednesday announced a multiyear, nonexclusive deal to let MTV sell ads for thousands of Warner’s online music videos.
The music video business, which MTV pioneered three decades ago but has largely abandoned, has migrated online in recent years to sites such as YouTube and artists’ individual home pages. The dispersion, however, has meant that artists and labels have collected very little advertising revenue from the videos they create because the clips have been spread far and wide across the Internet.
That’s now beginning to change. Universal Music Group, Sony and EMI are pursuing one strategy: Combine all the videos through a website called Vevo to achieve critical mass and charge more for ads.
Warner appears to be charting a different course with its MTV alliance. Instead of pooling the videos into one online destination, Warner wants to keep the content on its artists’ individual websites. It’s still a large audience: Warner’s music videos garnered 26.3 million unique visitors in May, according to ComScore, an online tracking firm.
Such an audience can command several million dollars a year in online advertising revenue, a substantial amount when the industry is struggling against massive declines in CD sales. Warner last year outsourced the ad sales for its videos to Outrigger, an independent Internet ad sales company. But advertisers prefer to sign a handful of deals with companies that have access to large audiences, rather than pursue a large number of deals with smaller outfits such as Outrigger.
Warner is hoping that its shift to MTV will allow it to command higher ad rates and sell more ads, using MTV’s online advertising sales force. The agreement also gives MTV the option to contract Warner artists to appear on the network’s shows or provide licensed music for its TV series.
“By combining our inventory with MTV’s, we obtain the scale that makes our content very compelling to advertisers because our traffic becomes part of MTV’s network,” said Stephen Bryan, Warner’s senior vice president for digital strategy and business development.
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