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Chapter 7 bankruptcy is emblematic of the online video bubble.In August of last year, I anticipated a bit of a blood bath in the overcrowded online video space. With capital harder to come by, an ad money deluge that never happened, demand for semi-pro production growing too slowly, and big incremental video hosting costs, a bit of online video carnage was inevitable.
Yesterday, one of the previous front-runners, Veoh Networks, called it quits. Veoh’s plight was exacerbated by a copyright infringment lawsuit from Universal Music Group last year. Veoh won a summary judgement, but took a beating in what founder Dmitry Shapiro called Universal’s “relentless war of attrition.” Last year, the San Diego-based company laid off about a third of its staff.
The fact that Veoh focused on full-length, long-form, high resolution content probably didn’t help its balance sheet. The company had raised $70 million in venture capital from Shelter Capital Partners, Spark Capital, Goldman Sachs, Adobe Systems, Intel Capital and Time Warner Investments. Its audience had grown to over 28 million users a month and was attracting millions in revenues per month, but that wasn’t enough to avoid a Chapter 7 bankruptcy.
In a blog post Thursday, Shapiro listed some of Veoh’s legacy accomplishments: “Some of the technologies we pioneered now form the basis for standalone companies and many are now standard features of video services […] We eventually prevailed in a decisive summary judgment that has set an important precedent for the entire industry.”
That judgement constituted a sweeping ruling that Veoh was protected against the music label’s copyright claims by the Digital Millennium Copyright Act.
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Veoh is a revolutionary Internet TV service that gives viewers the power to easily discover, watch, and personalize their online viewing experience.
With a simple broadband connection Veoh gives you free access to all of the great TV and film studio content, independent productions, and user-generated videos on the Web. From hit CBS, NBC, FOX and Comedy Central shows to your favorite YouTube clips, Veoh turns the vast universe of Internet video into an easy-to-use, high-quality, personalized experience that TV fans everywhere can enjoy.
Veoh is an open platform for content publishers of all sizes and sophistication who want to reach tomorrow’s television audience. Currently more than 100,000 publishers - from forward-thinking, well-known entertainment brands to independent, made-for-the-Web producers - use Veoh to connect with an audience of more than 24 million engaged, influential viewers. In addition, Veoh’s unique publisher optimization program gives publishers powerful tools to help them raise awareness of their content and cultivate loyal viewing audiences.
With offices in San Diego and Los Angeles, CA, Veoh is home to a diverse team of entertainment industry insiders, outsiders, technologists and creative types who share a common vision: To make Veoh the most valuable video experience on the Internet. And like any good business, we have our fair share of suits -- Veoh is privately held and backed by leading technology and media investors, including Goldman Sachs, Shelter Capital, Spark Capital, Michael Eisner's Tornante Company, Time Warner Inc., Tom Freston’s Firefly3 LLC and Jonathan Dolgen.