Veoh to target YouTube viewers

The online site, which launches today, aims to stand out with longer and better-quality videos. Michael Eisner is an investor.

By Dawn C. Chmielewski
Times Staff Writer

February 13, 2007

An Internet television service backed by one of Hollywood's best-known deal makers launches today.

After a year and a half of public testing, Veoh formally opens for business stocked with more than 100,000 videos by amateurs and professionals.

San Diego-based Veoh Networks Inc. is one of an emerging group of video websites seeking to move beyond pratfalls and karaoke. To that end, the company has found an investor with a distinguished Hollywood pedigree: former Walt Disney Co. Chief Executive Michael Eisner, who serves on Veoh's board of directors.

"You may have cut your teeth on YouTube," Veoh Chief Executive Dmitry Shapiro said.

"But if you really want to broadcast, if you want to be a producer of video, Veoh is the place you need. It's for YouTube graduates."

Veoh is vying for viewers and advertisers in a crowded field, including Google Inc.'s YouTube and Joost, the Internet television venture started by the creators of Kazaa, the file-swapping service that was sued for enabling widespread piracy of songs, movies and TV shows. Veoh seeks to differentiate itself with longer videos, high-quality pictures and sophisticated online publishing tools.

Eisner has been influential in brokering deals between Veoh and content partners. United Talent Agency plans a Veoh channel dedicated to showcasing new talent and content. Celebrity magazine Us Weekly is also creating an entertainment channel.

Like Break.com, Revver Inc. and certain other video sites, Veoh plans to pay publishers based on the audience their videos attract.

"The challenge for Veoh in the short term is more about attracting those talented content creators," said Jupiter Research senior analyst Joe Laszlo.

Veoh allows producers to automatically distribute videos of any length or picture resolution to multiple sites, including YouTube, Google Video, MySpace and Facebook. The company touts DVD-quality video that can be viewed on a full computer screen, not just in a small window.

Shapiro hopes to make money by collecting transaction fees for videos offered for rental or purchase and by selling ads around free videos.

"There are few advertisers who will want to advertise on short, grainy video clips," Shapiro said.

YouTube's short videos still have strong appeal — 30 million U.S. Web surfers visited the site in January, according to research firm ComScore Media Metrix. Veoh had 657,000 visitors — a smaller online viewership than Break.com, Metacafe.com or vMix.com.

Although dwarfed by YouTube, Veoh attracted unwanted attention last summer because of its willingness to let its users upload pornographic videos. After facing criticism, the company removed the "adult" category from its site, deleted explicit videos and changed its use terms to prohibit videos containing nudity.

YouTube is engaged in tough negotiations with many television companies over the right to distribute shows.

Digital Music Group Inc. said Monday it had reached a deal with YouTube to make available some television shows to which it controlled the digital rights, including "I Spy" and "My Favorite Martian."

Veoh is "trying to play a slightly different game than YouTube," Laszlo said. "I think there's room for success here. There's definitely room for failure."