Sun, Jul 15, 2007 - Page 19 News List

Internet video revolution redux

Veoh Networks Inc 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

By BRAD STONENY  /  NY TIMES NEWS SERVICE , New York

The creators and consumers of user-generated Internet content like video-file sharing site YouTube and social network MySpace.

Dimitry Shapiro brings an unlikely gadget into meetings these days: a TV remote control.

As chief executive of Veoh Networks, an Internet video company based in San Diego, Shapiro uses the remote to navigate the company's new software program, VeohTV, on his laptop. The software acts like a Web browser but displays only Internet video, presenting full-length television shows and popular clips from the Web's largest video sites, like NBC.com and YouTube. It lists those videos in a program guide and plays them in a small window or across the entire screen.

The product, now in a private testing phase, will be available to the public later this year. It has the potential to be a popular and practical way to watch online video. But like a long line of other innovative high-tech tools, VeohTV could also threaten and alienate traditional media companies and even cause some of Veoh's Internet rivals to consider legal remedies.

For the last two years, Veoh Networks has operated a video-hosting Web site, Veoh.com. The site works much the way YouTube does, with a few notable exceptions. The company does not impose any time limits on the length of videos and does not use digital fingerprinting technology to filter out copyrighted material. That has led to some rights holders to complain that Veoh has fallen behind in protecting intellectual property.

Nevertheless, Veoh.com has been growing fast: It draws about 15 million visitors a month, up from 4.5 million in January. Veoh Networks is a private company and does not release financial data. YouTube, by contrast, gets more than 100 million visitors and serves up more than 3 billion video clips a month, according to several market research firms.

"It's impossible to compete with YouTube as a video sharing site now," said Josh Bernoff, a vice president at Forrester Research. "Veoh is a good example of a company that decided to go off in a new direction."

That direction is VeohTV. To support the new effort, the company raised about US$26 million this summer from investors, including Time Warner; Goldman Sachs; Spark Capital, a venture capital firm in Boston; and the former Disney chairman Michael Eisner, who joined the Veoh board and counsels Shapiro, a 38-year-old, Russian-born engineer. The company introduced VeohTV as a beta product last month, making it available for testing to a group of invited users.

I found VeohTV to be easy to use. Once the software is downloaded to a computer, it offers an easy-to-navigate directory of 114 video channels, including listings for CBS, NBC, Fox and YouTube. On the NBC channel, there are dozens of episodes of Heroes, 30 Rock and Studio 60 on the Sunset Strip. On the Fox channel, there are several full-length episodes of the dramas Bones and 24.

Those shows are free and available for streaming on the NBC and Fox sites. The VeohTV player, Shapiro said, is just giving them a new audience.

"There are full-length episodes at Fox.com, but many customers don't know how to find them," he said. "The Web browser is fine for short clips. But if you just want to sit back and watch video on the Web, this is what you will want to use."

Major media companies, however, are more interested in protecting their copyrighted programs. Veoh does not ask for permission to play material from other Web sites, though Shapiro says he wants to strike advertising-sharing deals with content owners to ensure that shows appear in high-quality video. But Veoh does not think that it needs consent because VeohTV is doing nothing more than playing what is already online, including any commercials shown during the programs.

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