Earlier this week, Miley Cyrus rode a wrecking ball into the record books. Her new Terry Richardson-directed music video—in which she swings around naked on a wrecking ball while crooning about the vicissitudes of love and occasionally licking a sledgehammer—quickly became the most popular music video ever on Vevo, attracting 19.3 million views in the first 24 hours.
And while Cyrus was gleefully singing and swinging into the hearts of fans, Vevo, a private company based in New York, was reveling in something else: the continued demolition of its competitors.
These days, Vevo dominates the world of online music videos to a degree that is surprising considering the pedigree and head start of its rivals. In August, Vevo racked up 49.3 million unique visitors and 609 million video views, according to ComScore, crushing its nearest challengers, MTV (VIA) Music Group (35.2 million unique visitors; 261 million video views), Yahoo! (YHOO) Music (3.7 million unique visitors; 7.5 million video views), and AOL (AOL) Music (3.0 million unique visitors; 8.1 million video views).
How did a relative newcomer like Vevo get so far ahead?
The company, which was founded in 2009, was launched with the backing of Universal Music and Sony (SNE) Music Entertainment. That means Vevo gets first dibs on the music videos of two of the three-largest record labels. (Vevo also had the online music video rights for the fourth-largest record company, EMI, until the giant was broken up last year.)
Those relationships have given the company outsize clout, because any website that wants to legally distribute music videos from Universal and Sony’s hefty roster of artists must first strike a deal with Vevo. Since the company’s debut, Vevo executives have signed multiple agreements, distributing its music videos far and wide across the Internet. But its primary distribution point has long been its thriving “channel” on Google (GOOG)’s YouTube.
Earlier this summer, Vevo and Google extended the mutually beneficial relationship. In July, Google invested $45 million for a 7 percent stake in the company, keeping Vevo comfortably ensconced in the all-important YouTube ecosystem for years to come.
It’s an increasingly lucrative position to occupy thanks to the ongoing boom in digital video advertising. According to data from the Interactive Advertising Bureau, spending on digital video has soared (pdf), from $324 million in 2007 to $2.3 billion in 2012.
Having established its centrality among music fans on YouTube, Vevo is now aiming to conquer the next big thing in music videos: mobile distribution. “It’s moving [to mobile] so fast that most people aren’t aware,” Vevo Chief Executive Officer Rio Caraeff told Bloomberg TV in June. “Last year in the U.S., 51 percent of our streaming happened off of the PC—on mobile, tablet, and television. That’s really what’s driving our growth.”
Not to mention, Cyrus’s creative use of construction equipment.
