Lady Gaga

Has Lady Gaga single-handedly reinvigorated the music video?

According to industry insiders, yes.

And this time, the revolution is taking place on the Web.

"It's like MTV's heyday, all over again," says Eric Garland, CEO of media tracking agency Big Champagne of the Gaga effect. "Music fans have a passion for videos unseen since the '80s," adds Jay Frank, senior VP of music strategy at CMT. "She's our pinnacle," says Rio Caraeff, CEO of Vevo, the aggregate music videosite powered by YouTube and supplied by three of the big four label groups: Sony Music Entertainment, Universal Music Group and EMI.

Gaga's shape-shifting theatrics might not be entirely original -- she is, after all, a direct beneficiary of Madonna's taboo-bashing antics during MTV's glory years -- but she has lured viewers to her videos in unprecedented droves.

For example, the clip for "Bad Romance," which debuted on YouTube in November, has generated more than 257 million views on YouTube at last count, vs. the 90 million to date for one of last year's hottest clips, Beyonce's "Single Ladies (Put a Ring on It)" and the current total of 77.6 million for Michael Jackson's "Thriller," released in 1984.

Not only have Gaga's outrageously inventive and fashionable -- not to mention explicit -- videos raised the bar for other artists and labels, they prove big stars and labels can successfully monetize their music on the Internet.

Gaga's unique understanding of the medium, her calculated ability to fan the flames of hype, and a very concerted behind-the-scenes push by music streaming channel Vevo.com have all contributed to her chameleonic allure. Doug Morris, the chairman and co-CEO of UMG (home of Interscope, Gaga's label) who spearheaded Vevo's launch in January, had been fully aware of how music videos were exploding online. He was also aware that revenue from online content had been woefully underrealized relative to its potential.

Built on an ad-sales-driven business model, Vevo sells advertising based on its videos to about 150 companies, and the artists and labels get a "sizeable" portion of the revenue, according to Vevo execs.

For the premiere of Gaga's "Telephone" music video in March, Vevo launched its biggest promotional push thus far. It took all of its artist videos on YouTube -- about 40,000 of them, collectively generating about 10 million hits per day -- and added advertising "skins" to those videos, promoting and linking to the "Telephone" video. This drove about 15 million views to the "Telephone" video on Vevo during its first 24 hours, according to Caraeff.

"We were only three months old at that point, and it was the first time we had channeled that much energy into a solitary event."

Like Madonna's "Justify My Love" video in 1990, which was banned by MTV and then went on to became a top-selling video single on VHS, "Telephone," also banned on MTV, quickly emerged as the Super Bowl event of online music videos.

Highly stylized and co-starring Beyonce Knowles, the 10-minute film -- directed by Jonas Akerlund with the kind of B-movie, women's prison exploitation theme that Quentin Tarantino might relish -- birthed a sense of what could be achieved with music videos on the Internet.

"Thanks to Gaga, artists are inspired by the possibilities of the Web -- whether it's the duration or the content," says Caraeff. "They are doing more on the Web now than they could have ever done on television. They can reach more people and generate more revenue."

According to "Telephone" director Jonas Akerlund, the timing of Gaga's ascendance "is perfect," arriving on the heels of TV's stranglehold on content.

"Six or eight years ago music videos were so boring because the brief was always 'look at what's on (MTV's "Total Request Live"),'" he says. "But with the Internet, it's like we're back to where we started when music videos were brand new and it was all based on instinct and fun, and the brief was always break the rules. (Gaga) doesn't have those old limitations, and today audiences can discover her all by themselves."

Already, Gaga's influence as a sexual provocateur appears to have spread to even such long-established stars as Christina Aguilera, whose bondage imagery and girl-on-girl fetishism in her "Not Myself Tonight" owes no small debt to Gaga's "Bad Romance" and "Telephone" videos, which led to a record-breaking 13 MTV Video Music Awards nominations earlier this month for the artist formerly known as Stefani Germanotta.

And while Gaga's brand of performance art hasn't ventured beyond sexual politics, it's hard to imagine the shock-and-awe controversy associated with M.I.A.'s genocide-themed "Born Free" video or Erykah Badu's Dealey Plaza strip-tease in the recent "Window Seat," with its Kennedy assassination overtones, without Gaga having paved the way.

In the '80s and '90s, music videos were treated as promotional tools, like movie trailers, designed to promote album sales. When music videos went online, the audiences for them grew even as their budgets shrank along with physical album sales.

Now Gaga and other big artists are transforming videos from promotional to inherently commercial.

"We have found that advertisers have really gravitated to music videos," says Caraeff. "We have over 150 advertisers on board, from every category of advertising. And they like that we have improved the quality of those videos, because we stream them in high-definition." ("Telephone" was the first hi-def video on Vevo.)

The rights owners -- the artists, the songwriters and the publishers -- make money through the Vevo ad sales model. "For all of the content programming that Vevo has, the revenue goes directly back to the artist," Caraeff says.

But do online videos stimulate actual demand for music product? Big Champagne's Garland is unequivocal in his response. "Did elaborate videos affect demand for Madonna? Of course!" he says. "Visualizing Gaga is important, it deepens the connection between her and her fans. It all drives the phenomenon: the directorial bent and the costumery. Her visual storytelling is part of what differentiates her from the rest."

Garland says the explosion of music videos on YouTube is "a replacement behavior" for consumers of music. "The top videos are getting hundreds of millions of views -- and, in many cases, not very well-remunerated views. For some songs, YouTube is larger than P2P file sharing, in terms of fulfilling online demand. And a great deal of that demand is not even for video -- people use YouTube as a streaming audio player! I'm inclined to say that YouTube is the biggest name in Internet music. And Vevo is clever -- trying to capture some of that ad inventory back."

So where does that leave cable television networks like MTV, which long ago shifted the emphasis from music videos to reality-based programming? Amy Doyle, exec VP, music and talent at MTV, says while a majority of music video viewing is happening online, the relationship between the music video and television is far from over.

"Fans now participate and often create whole ecosystems around a video," she says. They don't just watch, they share, they comment, they even create and post parody videos. The challenge is that the environment for videos is more cluttered than ever. Television still plays a critical role in helping fans cut through that clutter to discover new music."

And while CMT's Frank agrees that TV is an important medium for music video, mobile content continues to show signs of strength. "The home for the video today is where the viewer makes it," he says.

Frank predicts that Gaga's viewership levels will become the standard for labels and their biggest artists, just as "Jaws" and "Star Wars" made $100 million the box office benchmark in the '70s.

"Lady Gaga is a unique artist, and attempting to replicate her playbook will almost certainly result in failure," he says. "The music business of the future requires vision and commitment -- Lady Gaga stuck to this road map and is reaping the rewards. The net result is that she proved what I've known all along: that big budgets can be successful on small Internet screens."

(c) 2010 Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.