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Vevo plans to launch in Middle East

Online music website is expanding geographically, hoping to move into profit in next 18 to 24 months

Vevo currently gets 70% of its traffic from YouTube, according to Vevo CEO Rio Caraeff.
Vevo currently gets 70% of its traffic from YouTube, according to Vevo CEO Rio Caraeff.

Online music website Vevo is set to start in the Middle East and North Africa regions after in launches in the UK in the next month or two, CEO Rio Caraeff told Bloomberg.

The site, which is supported by advertising, has 1.7 billion worldwide streams a month, and counts Vivendi SA's Universal Music, Sony Corp, EMI Group Ltd and the Abu Dhabi Media Co among its investors.

Approximately 70% of traffic to the site comes via YouTube according to Caraeff. Vevo aims to have 200 million viewers worldwide by end 2011, with at least 60 million in the US.

"We've had to recondition the marketplace by showing that our content and audience is valuable," he said. "It's not the same as posting tooth whitening and liposuction ads. Vevo is one of the top five sites in the US with the highest penetration of users between the ages of the lucrative 18- to 34-year-old demographic. Other sites in that category are YouTube and Facebook," Caraeff said.

"If you don't have that kind of scale you're not interesting to advertisers, or the audience," he said.

Instead of making money from declining digital music sales, Vevo makes money from premium ads placed around videos and other content on the site by marketers such as McDonald's, Unilever and AT&T.

Vevo charges approximately $25 per 1,000 impressions, while on mobile platforms such as the iPad and smartphones it's in excess of $45 per 1,000.

Caraeff hopes to double its figures this year and hopes to become profitable in the next 18 to 24 months through geographical expansion, live performances featuring product placements and original content on the site.

The programming includes famous film directors such as Terry Gilliam pairing up with the rock band Arcade Fire and a plan for David Lynch to join with Duran Duran to direct concerts.

"Vevo was the first industry company that only focused on what's best for the fan and not how to protect the incumbent business model. The industry has to figure out to develop multiple revenue models that will see it getting paid by people who want unlimited access to music," said Caraeff.