About 400 million people each month watch music videos presented by Vevo LLC, the digital-ad-sales platform founded seven years ago by the world's two biggest record companies.

Yet most people "don't even know the Vevo brand," said Vevo's new chief executive Erik Huggers. That's despite years of aggressive branding such as obscuring artists' faces behind neon color filters and giant Vevo logos in marketing materials.

Vevo aims to change all that as it rolls out a sleek new app this week and an ad-free subscription service in coming months to deliver the 200,000 music videos owned by Vivendi SA's Universal Music Group and Sony Corp.'s Sony Music Entertainment.

Videos and artists are represented on the new app by 15-second looping video clips instead of static images, and are curated by a team of expert "hosts" that users can follow for personalized recommendations. The goal is to draw music-video seekers straight to Vevo instead of other sites, while turning Vevo into a cool, artist-focused lifestyle brand that young fans might sport on their T-shirts, Mr. Huggers said.

Vevo already has its own app, but currently most fans watch Vevo's official music videos on Alphabet Inc.'s YouTube. Alphabet owns a minority stake in Vevo and takes a significant cut of the advertising revenue Vevo generates on the free YouTube site.

YouTube has more than 1 billion monthly users, and music is among its biggest draws. But after watching music videos on YouTube, fans typically take to social media and other outlets for discussion. Vevo is hoping it can bring viewers to its app first and keep them there by cultivating conversation, connecting users with artists, tastemakers and like-minded fans and curating chatter about the videos.

Vevo will continue to sell advertising but will launch an ad-free viewing option in coming months, a tier that it will likely price below $10 a month to lure what Mr. Huggers hopes will be "millions and millions" of subscribers.

Vevo's 200,000-video catalog is tiny compared with similarly priced music streaming services such as Spotify AB and Apple Inc.'s Apple Music, which offer tens of millions of songs for about $10 a month to 45 million paying subscribers combined.

But Vevo said it is the only service besides YouTube with as many music videos. Spotify's video offerings consist mostly of live performances, original series and clips from news, talk and comedy shows on TV; Apple Music and Tidal have paid to offer exclusive access to some official music videos before their official release on Vevo, while Apple Music also offers a significant number of other music videos, many of which are available for purchase at the iTunes Store.

Music videos are a relatively new revenue source for the music industry, which began churning them out in the 1980s primarily as promotional tools to sell albums. Record labels and artists didn't reap any royalties when their videos aired on Viacom Inc.'s MTV.

But as record sales declined through the last decade while the online advertising market blossomed, record labels decided to try to cash in on their videos. Sony and Universal launched Vevo in late 2009 to sell the digital advertising, while Access Industries' Warner Music Group licensed its music videos to MTV. Advertisers pay a significant premium to reach fans of particulars artists and genres online through official music videos, though labels are earning increasingly less per play from the vast sea of user-uploaded videos on YouTube that feature their music.

In 2010, Vevo generated tens of millions of dollars combined for its record-label owners, and now generates hundreds of millions a year, with sales up 20% last year, people familiar with the matter said. They are modest sums for the $15 billion global recorded music industry, but Mr. Huggers—who took the helm last year after stints at Microsoft Corp., Intel Corp. and the British Broadcasting Corp.—believes he can grow the pie.

To do it, the 43-year-old Dutchman said he "started from scratch," doing away with TV-like programming that Vevo had rolled out in 2013, toning down the loud corporate branding and rebuilding the company's technology.

From Vevo's San Francisco headquarters—in the same building that houses ride-share firm Uber Technologies Inc.—Mr. Huggers said he's been competing fiercely for engineering talent with his corporate neighbors, attracting some musically inclined techies with perks such as concert tickets, artist visits, satellite offices in Portland, Ore., and a slew of colleagues that play music in their spare time.

On a recent afternoon Miguel Alvarado, a DJ and Vevo's vice president of data analytics, said he was planning to start analyzing the visual aspects of Vevo's videos so that users could search and sort them by colors, moods and themes, tracking all the videos set on tropical beaches, for example.

Chris Wang, a guitar-playing designer from China, showed off a playlist that users could scan by swiping through vertically viewable clips of the videos.

In months ahead, Vevo plans to let users comment during any point in a video, sharing their time-stamped notes on their own profile pages while highlighting the most enlightening or popular comments on one official annotated version for all users to see.

"There's so much value that can be created around the comments," said Mark Hall, Vevo's vice president of product, adding that as a user, "I want to do something that other people can see and is cool, and shows that I am knowledgeable and interesting."

Write to Hannah Karp at hannah.karp@wsj.com

 

(END) Dow Jones Newswires

July 14, 2016 17:25 ET (21:25 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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