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August 17, 2005

Veoh: an Internet Television Peercasting Network

Veoh Networks, a San Diego start-up, is described as an Internet Television Peercasting Network. They also completed a Series A round of financing led by Shelter Capital Partners. No where could I find how large (or small) that financing round was but Dmitry Shapiro, the company’s founder, did tell me that they are well capitalized and has what he needs to solidly move forward.

One of the impressive thing about Veoh is Dmitry Shapiro. He is a specialist in peer-to-peer networking and computer security. Veoh just announced its own protocol appropriately called VeohNet. I am not in Dmitry's league of expertise so my take is to think of it like BitTorrent (swarmcasting) but even better. For example, viewers will not have to open up ports to make it work. Also, publishers can pull back content if they need to. This should go a long way to solving legitimacy issues and ease of use.

InformITV said: "Unlike unmanaged P2P networks using software such as BitTorrent to share mainly illicit copyright video, Veoh will have a community of publishers and content will be approved by editors. The system will also integrate with Google Video and RSS, providing content producers with easy publishing to multiple video systems."

The current management team is supposed to include executives and advisers from Coco-Cola, Columbia Pictures, eBay, Gateway and Musicmatch.

I have put Veoh on my radar because there is a compelling economic logic to using the Internet as a distribution mechanism that allows content providers to connect directly with viewers. There have been many postings here on content owners who are doing exactly that. Who knows, maybe Veoh can latch onto that pin action.

From what I know about their business model it is straightforward. Publishers can use a program called VeohUploader (which is due to be released tonight). Dmitry described to me that if you can handle being a seller on EBay, you can become a publisher on Veoh. A content owner can specify whether people can watch for free or pay per viewing or work under some sort of subscription model.

Les Moonves, here is your chance to test your $1 per CSI episode and see if the market place validates that price point. But the real reason I bring that up is this: if Viacom were to do that in Veoh’s business model, they simply could start tomorrow. They would not need Comcast or Time Warner’s agreement to do so. They also would not have to invest any significant money to do so. This is why Veoh can allow people to easily become their own publishers.

Obviously, one key business driver for Veoh will be to amass an audience size to make it worth the larger network’s while. This is the classic chicken and egg scenario: well branded networks want larger audiences to make it worth their while, and larger audiences show up for high-quality content. We will see how Veoh gets past this business challenge and I for one will watch their progress.

There’s not much yet at Veoh’s web site, but you can sign up for notification when their beta is ready. Another thing is that you can enjoy their word-smithing:

It will open the world of media so that every country, established or third political party, foundation, charity, cause, company, and individual has an unrestricted voice, able to reach the farthest reaches of the world, with the capacity to alter human understanding. We will be able to stop wars, expose genocide, enlighten, entertain, educate, bring together, inspire, connect, and help find love of all kinds.

We are building the next phase of the Internet, the Self Published Video Web. Think of it as Television 2.0

Posted by Martino Mingione on August 17, 2005 04:29 PM

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