Vevo‘s Board of Directors, which includes members of Vevo’s founding companies Universal Music Group, Sony Music Entertainment, Abu Dhabi Media Company and Google, today announced that Erik Huggers has been replaced by the company’s current Chief Operating Officer, Alan Price, in an uncermonious fashion. “We would like to thank Erik for his hard work, dedication and leadership at Vevo, which grew dramatically during his tenure and helped forge stronger connections between artists and fans through popular features and original programming.” Huggers held the post of President and CEO for 2 years after being elected in 2015, with hopes of righting the struggling business.
After his hire, Huggers quickly cleaned house, purging the company of its legacy executives including Jonathan Carson and Doug McVehil, CRO and Head of Content. But insiders tell VideoInk that Huggers was a bad hire from the outset and shed light on Vevo’s bleak future.
“We don’t really know what the future of the business is,” said one insider, noting that it will be difficult for Vevo to find a buyer unless the labels want to participate in either guaranteed long term rights to the music and publishing rights or an exclusivity clause. Both scenarios cause a negotiating nightmare around the rights held by Sony and Universal Music Group and potentially a significant loss for both.
“If you look at Erik’s background, he likes to build product and distrupt industry,” said another executive close to the company. “Over the last year, he’s delivered growth and scale, the company’s never been stronger, but he also promised subscription and other products that just haven’t been realized.”
And a company spokesperson substantiated the source — Vevo’s business grew over 30% month over month and the sales efforts around advertising across YouTube and its owned and operated have climbed. In 2016 the company reported revenues upwards of $500 million, up from $300 million when Huggers initially joined Vevo and a number Vevo’s spokesperson claims is near double in 2017. Orginal video has also scaled under Tom Connaughton, SVP, Creative Content and Programming and Joesph Patel VP of Original Content, securing over 231 Billion annual video views versus 180 Billion annually in 2016.
But under Huggers’ leadership, the business needed to diversify revenue, and one executive familiar with the company went as far as to say that “Huggers doesn’t have anything to do with Vevo’s growth on YouTube.” It’s become common knowledge that one of Vevo’s biggest hurdles has been its reliance on YouTube for traffic. In 2015, the number was pegged at close to 95% of Vevo’s audience finding its content on YouTube.
As a business that is reliant mostly on YouTube and one facing a media market that has put various businesses in a pinch to make revenue goals, two years to launch product unsuccessfully seal Huggers fate.
While Vevo aims to court a replacement, Price assumes a role he’s held before, when Rio Caraeff departed the company. While the future may look bleak for Vevo, and its viability as a standalone platform and producer of original formats is called into serious question, it’s rights in the music space and position with YouTube will keep the boat afloat, for now.