Eisner-backed Veoh to make online video more like TV
Last Updated: Thursday, June 21, 2007 | 9:05 AM ET
The Associated Press
Veoh Networks Inc., a site backed by media mogul Michael Eisner, hopes to radically change how people watch video online, offering software that not only finds and plays programs from anywhere on the web but also offers the look and feel of traditional TV.
Veoh TV will display both user-generated videos from sites such as Google's YouTube as well as episodes streamed by major TV networks like ABC and Fox, organizing them in channels much the way a standard TV program guide does.
The free downloadable program will display streaming video full screen, complete with whatever advertising the creator has placed in it. It also will save videos from sites that allow downloading, although it won't access sites that sell videos.
"Video today does not have a killer desktop application and that's what Veoh TV aims to be," Veoh Chief Executive Dmitry Shapiro told the Associated Press. "It's a new type of browser made specifically for video."
Veoh TV will sell ads within its programming guide. Shapiro said he is discussing deals with content providers to share revenue from ads that can be placed in or between videos. But he said he intends to launch even without such deals.
Analysts say such an approach risks angering major TV networks, who so far have kept tight control over where their videos are distributed.
"Networks may say either 'take this down' or 'give us a portion of the revenue,' " said Anton Denissov, an analyst at the Yankee group. "Veoh is talking to them. But remember, Viacom was talking to YouTube one day and suing them the next."
Shapiro says the major network piece is "a gray area," but insists that networks will benefit from any application that increases their audience, allowing them to charge more for advertising.
"Web video is valued less today by advertisers than TV," he said. "The reason is because of the experience.
"Today, people watch online video sitting in a chair, leaning forward, using a keyboard, clicking on links, typing things in, going to different websites. Each time you get there, the interfaces are all different. It's search, click, squint."
Shapiro maintains he is under no obligation to negotiate with content providers because Veoh TV finds videos in the same way any search engine does.
Search casts wide net
The application, to be released in a test version this week, will search the web the same way a typical search engine does. In later versions, it will also use video search engines from Yahoo Inc., Google and Truveo, which is owned by Time Warner Inc., allowing users to find video using multiple search engines simultaneously.
Shapiro said his software is most similar to the internet TV service Joost, launched by the creators of Skype, an internet calling program, and Kazaa, a file-sharing program. Both Veoh and Joost use peer-to-peer technology to deliver video.
But Joost and other sites rely on content delivered from partners, while Veoh TV will cast a wider net, Shapiro said.
Shapiro said he would like to strike deals with TV networks to allow for targeted advertising based on the user's searches and viewing choices. Paid search that gives preference to content from partners also could be lucrative, he said.
"We clearly have the capability of making sure the first things that are displayed are the videos they want displayed," he said.
Former Walt Disney Co. CEO Eisner made San Diego-based Veoh his first investment as a venture capitalist since leaving Disney. In addition to Eisner, Veoh has raised money from Spark Capital and Time Warner Inc.
