Online video maket is very challenging, unless you are Youtube or Hulu.
Veoh, one of the earliest online video sites is shutting down. It had the backing of some of the top vcs and media execs. But that couldn’t help save the company.
Online video is a funny space. Its usage is exploding but it is diffcult to make money unless you have scale and content.
But the thing that seems to have killed Veoh is the lawsuit from Universal Music Group (UMG). So in essense Veoh got napsterized. Here is an exceprt from the blog post from Veoh’s founder Dimitry Shapiro.
Two years ago, Universal Music Group (UMG), the largest music company in the world sued Veoh alleging copyright infringement. While we made every effort to convince them that we were not their enemy and had not infringed on their content, they pursued a relentless war of attrition against us in federal court. We eventually prevailed in a decisive summary judgment that has set an important precedent for the entire industry.
Unfortunately, great vision, a passionate team, tens of millions of users, millions in revenues and victory in court were not enough. The distraction of the legal battles, and the challenges of the broader macro-economic climate have led to our Chapter 7 bankruptcy.