14 DAY TRIAL // The online video landscape looks pretty solid right now, though it's still in a transitory state. YouTube dominates pretty clearly while everyone else has given up on trying to catch up and making due with what they have, with the notable exception of Hulu. But five years ago, online video was an emerging market and nobody could have predicted a winner. One company that had a lot of potential, its investors certainly thought so, was Veoh, the very same company that is now filing for bankruptcy.
The video startup benefited from an all-start investor line-up like Goldman Sachs, Time Warner, Intel’s venture arm, Spark Capital, Adobe and others. It also managed to get $70 million in funding, not a small sum by any account. But all that was in vain as the site burned through the money as quickly as it got it and never really generated the kind of revenue to justify it, bringing in just 12 million in the past five years, most of it in the last two.
The company has now let go of most of its staff and confirmed that it will file for bankruptcy in the near future. It's unclear what this means for the users and their videos on the site but it doesn't bode well. The site had already become unavailable in some countries, likely to keep costs down, but is now shutting down for good.
One of the problems that have dogged the site for years, though probably not the only and maybe not even the main reason why the site was unsuccessful, was a long lawsuit with Universal Music Group, reminiscent of YouTube's own legal battle with Viacom, which is yet to go to court. The music label sued for copyright infringement, a common theme for the early video sites. UMG eventually lost last year when the judge found that Veoh wasn't responsible for what its users uploaded but it was too late to save the video site (story via MediaMemo).