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Is Music Video Distribution Broken? And If So, What Can Be Done?

While the temperature never got heated, sparks were definitely thrown during the afternoon session on music video distribution on the second day of New York City's Digital Music Forum East.

The culprit was panelist David Del Beccaro, CEO of Music Choice, the company best known for providing music channels to cable television operators. Shaking away the sleepiness of a post-lunch panel, Del Beccaro began hurling truth bombs early, first taking aim at on-demand services for music videos. The current generation of viewers want to participate in and shape their content, he said. They want to create their experience. Music Choice's new channel SWRV (pronounced "swerve") was more timely, he said, since it lets people control the videos shown and offers social networking features.

Music Choice CEO David Del Beccaro's criticism of Vevo and other music services was a high point of a panel on music distribution at Digital Music Forum East in New York Thursday.

A few minutes later, Del Beccaro raised even more eyebrows when he took a swipe at Vevo, the music video site co-owned by Sony Music and Universal Music. Vevo was "the culmination of a failed strategy," he asserted. The major music labels demand such high royalty payments, including steep up-front and per-stream fees, that literally no one had made money by showing music videos online. With no sites able to syndicate their videos and create revenue, the music labels were left to create a site themselves. Considering that Vevo's CEO had given a keynote address minutes before, it was a bold assertion.

"Doing more of what's been done over the past five years is no way to create a business," Del Beccaro said.

What the labels should have done, he said, was create a system where everyone in the distribution chain could make money. Vevo, he said, was a step in the wrong direction.

Independent music labels have a more reasonable business model, said panelist Daniel Tibbets, executive vide president and studio chief for GoTV Networks. They don't charge up-front fees and they demand smaller payments, he said.

Del Beccaro wasn't out of truth bombs just yet, though. When the moderator mentioned the lack of music videos on MTV to panelist Dermot McCormack, executive vice president for digital music at MTV, McCormack replied with a well-rehearsed statement about how music was behind everything the network did. That apparently didn't sit well with Del Beccaro, who said that Viacom, MTV's parent company, was simply making more money with non-music programming.

"Well, we're not in the business to make less money," McCormack answered with a smile.

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