In the world of Web video, either you are YouTube or you are in trouble. Today, well-funded video site Veoh laid off 25 people, the company confirmed today. The layoffs were brought on by a restructuring, as the company shifts focus away from its standalone site, says founder and now-reinstated CEO Dmitry Shapiro. Shapiro replaces former CEO Steve Mitgang. With both today’s layoffs and cutbacks last November, the company is now left with 45 employees, says Shapiro. We have added the latest round to our Layoff Tracker.
Shapiro says that the company is doubling down on its video search browser plug-in, Video Compass, in an effort to engage consumers with videos at times when they wouldn’t normally be watching them. Video Compass adds a video recommendations whenever you conduct a search on Google or elsewhere on the Web. Veoh adds over 25,000 new Video Compass users daily. Veoh’s standalone video playing site is having difficulty competing with the bigger players in the game like YouTube and Hulu. Still Shapiro maintains that Veoh’s site remains popular among consumers, generating more than 200 million video streams each month from content publishers such as ABC, CBS, ESPN, Viacom, and Warner Bros. Comscore says Veoh’s site had 15 million unique views worldwide in February 2009, down from 18 million last August, plus another 7.2 million for its VeohTV app, which has also been losing viewers (see chart below). Shapiro says that the site alone reaches over 23 million unique users each month.
So what went wrong? Shapiro says that the video search business model is still immature. He thinks that while video should be omnipresent in a consumer’s web experience, the ad model is still evolving. Shapiro is sure that advertisers will one day throw seven and eight-figure dollar amounts to advertise on video sites, but its simply not there yet. For that reason, Veoh is tightening its belt and trying to come up with new ways get consumers to watch videos. But getting people to watch videos online doesn’t seem to be the problem. It is getting advertisers to pay to reach those viewers.
Veoh is placing a big bet on Video Compass, which is a novel video discovery tool, but still has many glitches to work out. As we wrote in our review, Video Compass sometimes offers bizarre matches and appears only after the page you’re visiting has finished loading (so your Google search will finish, for instance, and only then will the Veoh ribbon pop in, shifting everything down a few centimeters).
Veoh has been on a rollercoaster ride over the past year. It is currently embroiled in a lawsuit with Universal Music Group, which so far seems to be going its way, marginally. Veoh has also raised significant capital ($70 million to be exact) from big-name investors like Goldman Sachs, Gordon Crawford and Time Warner. Shapiro says investors are supportive of the company’s redirection so far.
The two comScore charts below show worldwide unique visitors (for both Veoh’s site and its VeohTV app), and a U.S. comparison of Veoh.com to Hulu,.com.
I think this should be a warning bell to anyone thinking social sites can earn enough revenue from advertising to survive. Nor can they use the excuse it’s just that we need more volume. Veoh seemed to have huge numbers of video views, stacks of registered users but still not enough revenue to survive.
I agree with you Danny… Veoh isn’t the only player having a tough time either following this flawed “revenue model”.
Jon
http://WoodMarvels.com – Create Unique Memories
wow, what a day to lay ppl off
This is an April Fools joke. I am a receptionist at Veoh and I can say that there are no layoffs.
Usually April Fools jokes are funny or far-fetched. This story is neither.
I don’t know much about April Fools jokes. Nevertheless, it is business as usual here. No one is getting laid off.
The last to know are usually the first to go…
That was profound George. Did you make that up yourself?
maybe the april fool’s joke is that they didn’t have layoffs today.
Maybe you don’t know it yet…
Uhh…. Veoh never had a receptionist. Look behind you and check the logo on the wall. I think you work somewhere else.
Wow! Another one bites the dust. This is obviously the beginning of the end for Veoh. It’s no time to be changing business models and CEO’s. Mitgang is a nice guy but was never going to turn that company into a serious player.
ok video compass is kinda cool (doesn’t work that well yet though), but is it really worth 70m? haha
heard ooyala laid off a bunch too….getting uglier.
what did ooyala have anyways. Very typical “we are a bunch of Google people from Stanford, so obviously we are awesome”. What was their product? did anyone use it?
Yes, apparently millions.
I think much of Veoh numbers are fake, and users are generated by spam companies like Zango, they have the money to pay for it.
Moreover I’m not sure why they need 45 people to run this company, fairing 20 more people will make sense and give them enough money to waiver the storm.
All these sites like Metacafe and Truveo, I don’t know what will happen to them, maybe the best thing is to merge to become a reall YouTube alternative… I just checked all together based on compete.com get 13M compared to YouTube’s 70M users a month…
Good points. I think all the second tier video sites eventually go under or get bought for pennies.
what is veho? that name alone could pull any company down.
CompassLocator.com – directions anyone
anyone who has ANY knowledge of this space knows that a bulk of Veoh’s traffic was predicated on illegal file sharing (e.g., hosting full-length movies, TV shows, etc. that they had no copyright authority over). The moment they raised money and had to go legitimate, their traffic numbers began dropping as they more aggressively removed illegal content from the site.
I say over/under on Deadpool for this site is May 2010 (only this long because they have some money left over). Any takers?
What’s up with companies ruining perfectly good days like April Fool’s with actual lame stuff? If your company is going to take action on something on April 1st, make sure it’s not something that will cause people to respond, “Is this an April Fool’s joke?”
Good points Andy – I completely agree.
As a video producer generating 2M+ views a month I have shifted my uploads exclusively to YouTube. I was using tube mogul to upload to all of these 2nd and 3rd string video sites, but the volume is just not there and the rev share programs that they have in place are either non existent or so low that it becomes pointless to deal with them. More than that tho they just all feel like they are one step away from collapse. People complain about YT but there is just nothing else even close at this point in terms of audience and rev potential.
One big part of their strategy should be the iPhone. The iPhone version of Veoh is actually very good compared to some of the other iPhone compatible video sites.
andy schweig made a great point. Another point is that starting from Dec.08 they made video download available only via “Veoh Web Player” and not the much better “Veoh TV” application. A lot of users left that time.
There are only about 20-25 people left down here at Veoh. I don’t know where they’re getting the 45 they’re telling you, unless they’re counting board members, freelancers and spouses.
“In the world of Web video, either you are YouTube or you are in trouble.”
Even YouTube could be in trouble at $200mio/month to run.
Where is the share holder value in keeping an operation that doesn’t make money.
I wonder if the “Video Compass” can show Michael Eisner and the other investors where to see any money they sunk into this money pit.
So Dimitry starts out with Veoh TV which will revolutionize watching TV over the internet only to be wiped out by Hulu, switches horses by pulling the plug on Veoh TV to focus on Veoh.com, which is only trying to build a better mouse trap than YouTube lol, and now whittling down the brand to a mere browser plugin?
Wow I bet you the browser plugin idea is exactly what the investors thought they were getting when then handed over the cash.
If Dimitry were building skyscrapers, what was invisioned as a massive tower would in the end be a utility shed, but a damn good one.
I guess next the Video Compass will be scrapped for a Veoh Logo mouse curser that works like a little magnifying glass that will help you see better to click on YouTube and Hulu videos.
Well if anything Veoh will be remembered more for the court rulings cast down in their favor over Universal Music Group.
I guess everyone obviously hears the “death rattle” at this point for Veoh. Is there a Dr. Kevorkian in the tech industry when you need it?
@Nostradamus Don’t quit your day job just yet
Here’s a little song to cheer you up!!!!
Next time your found, with your chin on the ground
There a lot to be learned, so look around
Just what makes that little old ant
Think hell move that rubber tree plant
Anyone knows an ant, cant
Move a rubber tree plant
But hes got high hopes, hes got high hopes
Hes got high apple pie, in the sky hopes
So any time your gettin low
stead of lettin go
Just remember that ant
Oops there goes another rubber tree plant
When troubles call, and your backs to the wall
There a lot to be learned, that wall could fall
Once there was a silly old ram
Thought hed punch a hole in a dam
No one could make that ram, scram
He kept buttin that dam
cause he had high hopes, he had high hopes
He had high apple pie, in the sky hopes
So any time your feelin bad
stead of feelin sad
Just remember that ram
Oops there goes a billion kilowatt dam
All problems just a toy balloon
Theyll be bursted soon
Theyre just bound to go pop
Oops there goes another problem kerplop
LMAO. As I said before, don’t quit your day job
ouch