Yesterday it was reported that Universal Music execs were on the road pitching for investment in Vevo, Universal’s joint venture with Sony Music. They are giving the yet-to-be-launched music video channel a $300 million valuation, more than Spotify even. This, of course, is psychotic.

Generally speaking, investors have been very wary of record labels. They don’t trust them. This is one of the reasons that the growth of the digital music marketplace has been so erratic at best. Why would the two biggest record companies in the world need outside investment? Don’t they believe in the venture enough to use their own money?

Warner Music and EMI are conspicuously not a part of Vevo. Even though the two labels combined only represent less than a third of the market, wouldn’t you think that an investor might want to be assured that Vevo will have music videos from Coldplay, Robbie Williams, Linkin Park, Red Hot Chili Peppers, etc? You might say that Hulu doesn’t have CBS content, so what’s the big deal? It’s a big deal when you’re positioning the site as the end all be all of music video on the web.

When you think about it, nobody gives a shit about watching music videos online. Hell, nobody watches them on TV anymore! MTV (Music TV) doesn’t have anything to do with music anymore other than to air a lame awards show every year. In fact, even the labels themselves don’t give a shit about videos. They don’t value their videos anywhere near as much as their audio product, so any revenue they can generate is gravy. Maybe that’s why they want to launch Vevo with other peoples’ money.

Besides the fact that Vevo is just a stupid idea, the real reason it won’t work is really quite simple: it’s the partners themselves.

Joint ventures have a history of blowing up. They are usually done in order to cut costs and, theoretically, increase market share (in this case Vevo has to staff up, so there is no cost savings). Somehow they just never seem to pan out and JV’s in the music business have never worked. The last, Sony and BMG, was disastrous. It suffered from a corporate culture clash that still lingers to this day. The past is littered with joint venture nightmares like MusicNet and Pressplay. And, even though it wasn’t a JV, I love to remind people of the sublimely ridiculous SDMI initiative (sorry for bringing it up, but I just can’t help myself). And let’s face it: record companies don’t have a great track record in the online world.

So why don’t joint ventures work in the music business? Because the labels hate each other. Plain and simple. They can never agree and no label wants to help any other label succeed at anything. There is sincere animosity amongst recording companies that sometimes baffles the mind.

So what do you have with Vevo? An un-launched joint venture (that is a stupid idea to begin with) comprised of only 2 of the 4 major recording companies who have failed in every online initiative they have ever attempted and don’t believe in the project enough to invest their own money yet have the balls to believe that its worth an astronomical amount.

Who do I make out the check to?

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