Vevo music video service hits the Web Dec. 8

Rio Caraeff isn't just preparing to introduce a new company on Dec. 8 when he launches Vevo, a long-awaited online music video service backed by Vivendi's Universal Music and Sony Music.

His effort to build a business around one of the Internet's most popular video genres represents a new focus for the beleaguered music industry – one in which advertisers are more important than retailers.

"In the past, the music business was about selling music," says Caraeff, CEO of the joint venture. "In the future, the music business is about offering great experiences to everybody who loves music. ... It's not a one-size-fits-all proposition anymore."

Other music companies seem to agree.

EMI, which is considering joining the Vevo partnership, last week became the first major music company to offer videos on Hulu. The ad-supported site, best-known for TV shows, will start by creating a channel for singer Norah Jones that includes her videos and concert performances.

Last month, Warner Music formed a partnership with Web ad sales firm Outrigger Media. It's drawing sponsors to musicians' official sites, as well as other destinations that feature their videos.

It's easy to see why music companies want to try something new. Only about $6.9 billion will be spent this year on music including CDs, online and mobile downloads, and ad sales, private-equity firm Veronis Suhler Stevenson estimates. That's down 45.7% from 2004.

Yet Web surfers love music videos, which account for 55% of the viral videos that attract 100 million or more views, according to audience research firm Visible Measures.

"Some music videos get (played) 50 million times-plus on YouTube," says Ronn Werre, EMI's president of music services. That makes them "a pretty viable format" for a new business.

Advertisers also have their checkbooks out for online videos: Companies will spend about $1 billion in the U.S. this year for ads in or around Web videos, says Caraeff, who adds, "We think it will continue to double each year to about $3 billion or $4 billion in 2012 or 2013."