Vevo CEO: We command television-like CPMs on our videos

Vevo CEO Erik Huggers speaks Saturday, September 10, at IBC in Amsterdam.

AMSTERDAM - Vevo CEO Erik Huggers said the revenue his company currently brings in is driven by the “television-like” CPMs (cost per thousand impressions) Vevo can command on its videos.

Speaking today at IBC, Huggers said revenue is at “incredible levels” on its ad-supported videos on YouTube. Even with that success within an AVOD model, Vevo is still moving ahead with plans for a subscription service.

Huggers didn’t offer details on a launch date or cost for the service, but indicated that it would likely launch initially in only one or two markets, and that the U.S. is high on the company’s list.

The executive also said Vevo wants to create new ways for artists to connect with fans and talked about his company’s subscription service wanting to find a way to support music fan communities, like the followings that have popped up around artists like Beyonce and Rihanna.

In addition to music videos, Vevo is also working on creating original video content around music and has already hired on-screen hosts and curators to assemble playlists.

“It gives us an editorial voice that we didn’t previously have,” Huggers said of the Vevo’s original content. “We used to be just a watermark.”

But the lifeblood of Vevo’s subscription service will be music videos and it’s still unclear how successful Vevo can be putting music videos behind a paywall. YouTube has seen mixed results for its YouTube Red premium tier, which includes music videos along with everything else YouTube offers along with premium original content. Spotify earlier this year incorporated video content into its music app, although is pulling in content from programmers like ESPN and Comedy Central, not just adding music videos.

While the jury is still out on Vevo’s upcoming subscription service, Huggers said the company’s existing ad-supported platform is already strong enough to take ad dollars away from linear television

Huggers – who formerly ran Intel’s OnCue, which now powers Verizon’s Go90 platform – said two-thirds of Vevo’s audience are the type of people that no longer watch linear TV and pointed toward his service’s 63 percent usage rates in the 18-49 demographic, which compares to 32 percent for broadcast and 43 percent for national TV in the same category.

When questioned about launching a linear channel after a VOD start, similar to what Vice Media has done, Huggers said he was not convinced that is a good strategy, pointing toward the waning viability of the large channel bundle.

“The world has gone a la carte,” Huggers said. “It’s literally there, but instead of you picking your channels, you are picking your services.”

In that a la carte reality, Huggers said it will now be about who can win the rebundling game and unify all the disparate VOD services available. He said believes Amazon Video – which last year launched its Streaming Partners program – has the best shot at doing just that.