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Tuesday, 28 August 2007

Veoh: Different Approach, Same Goal

Joost and the BBC's iPlayer have hogged many of the headlines around IPTV in recent months. These two high profile IPTV platforms work in markedly different ways to the point where they are almost mutually exclusive. I was critical of the iPlayer's lack of streaming functionality while Joost is also struggling for content because of its ring-fenced system design.

It is worth looking at Veoh, not because they are set to take on the world, although they might just get lucky. The reason is that there are bits of their service which others could learn from and if nothing else the Veoh model challenges the establishment in a number of ways.

Veoh Today: Cheap Thrills
Veoh have an existing YouTube clone that seems to be finding its niche in 18+ rated content. Of the most popular 20 videos yesterday, 13 were rated 18+. I could go on to explain the inadequacies of the family filter, but that is not the point of this article.

Perhaps Veoh's new service, VeohTV, is an attempt to move out of the gutter - it is certainly has a lot more respectable content - with its new interface that challenges some of the boundaries of existing services. If it can make its recommendations engine work as promised and if its open network philosophy wins, it could indeed justify it's own hype of being a Joost Killer. There is a game going on between the content owners too, you know...

Very Limited Success
Everyone has heard of YouTube and Joost. Even Babelgum has managed to get itself on the radar by virtue of its "alternative" approach to content. Many people outside the US won't have heard of Veoh though, because it is so small. Alexa ranks their web site as the 27th most popular in the US, in the UK it is number 67. Globally they are down at number 107.

Data from Nielsen/NetRatings shows that there are now nearly 140m viewers of online video, up from just under 60m a year ago. YouTube has managed to grow its share of the market (37% up from 33%) in spite of advances by Yahoo! (11% up from 5%) and AOL (11% share in 2007).

Veoh's share is only 1.8%, up from 1.2% last year. Yes, they are growing but where Google has 69m viewers, Veoh has 2.5m so why am I bothering to write about them? It's not like they are a new company, but there is something about the brashness of it all that is worth noting. VeohTV is an interesting evolution.

A History of Disruption
Currently, veoh.com is a YouTube like service for a combination of user and professionally created content. It has two advantages over YouTube, although on the face of it, these have not been particularly effective.

For viewers, they offer download and store PVR functionality (like iPlayer) as well as streaming of videos (like YouTube & Joost). Publishers in veoh.com have their content automatically added to YouTube and Google Video as well behind the scenes. Publish through Veoh and you get Veoh + YouTube. Publish on YouTube and you just appear on YouTube. Clever, if sneaky.

VeohTV: Rising Above
VeohTV is a very different service - although the philosophy is the same. The VeohTV play is to rise above the content owners and emerge as Your Online Video EPG. VeohTV is a Video Browser - users are presented with a consolidated list of hundreds of web sites in a wide range of categories that already host free video on the internet.

The VeohTV Video Browser is a step up, tailored to improve video playback over standard web browser capabilities that power veoh.com and YouTube. Veoh's value add is the personalisation that its overall set of services learn from the users behaviour. This means that in the long run, the service increasingly recommends content to you that you are likely to enjoy.

On VeohTV you have channel lists by name, category, favourites etc so you can make it work for you. On the standard lists, ABC News right next to the link for CBS News and CNBC. It's an EPG where you can drill down and see a further list of programmes on that channel to watch either streamed live or for download and store.

Controversy Lingers
Users browse videos that are posted anywhere on the web through VeohTV's EPG which has VeohTV adverts on it. Veoh claims not to require partnerships with content owners before they can include the videos in their EPG, but this is controversial. Users do not see the ads on the content owners site - which VeohTV has disintermediated from the delivery chain.

This costs the content owner site traffic, which may be an important source of revenue and branding. It may even be why the video exists - to generate and maintain site traffic. Although the content owner can still embed ads within the video, any branding on their original web site is lost and replaced with the Veoh branding (sponsored by Verizon) on the customer's interface.


See the two different interfaces to the same content firstly an ABC.com and secondly the same programme on VeohTV. On their own version, ABC is getting paid by QuietAgent for the ad-link directly beneath the webcast link. On the VeohTV version, this revenue opportunity is lost.

AI on the EPG
VeohTV's value add is the AI that they are building to help you navigate the huge volume of available content on the open network. There is a recommendations engine bolt on coming. This delay is pending the patent of the AI that supports this feature. If they can make this work to predict what people want to watch, they will be extremely well placed to take on the role as the IPTV EPG.

This is where what VeohTV offers touches Arootz because both claim to be able to proactively download what you are going to want to watch so that it is there when you need it. Unlike Arootz, VeohTV is not at present designed for multicast so the implications on the networks could be very different. Where Arootz uses Multicast, VeohTV is a unicast service and this proactive ability in VeohTV promises to increase the burden significantly.

When combined with the recommendations engine, this PVR capability means that VeohTV can download a whole bunch of stuff on the off-chance that you might be interested - using your network resources to their maximum potential. With enough hard disk space and a fat pipe, you could have the whole schedule punted to you every day.

Standards War
There is a standards war being played out for what I have previously termed the IPTV operating system. Specifically these are the components that deal with content upload, EPG, hosting, distribution, caching and the client video player and DRM. Most of the recent developments like Joost have offered this whole set as their core service to the content community.

VeohTV is different because it is just an EPG & video player. It simply directs the user to the content owners own CDN - my stream from ABC news on VeohTV came from a server within my ISPs network, the same source as when I viewed the same file on ABC.com. When a user downloads a file for later viewing, the application has a P2P option although in the ABC news example exclusively preferred the download server within my ISP again.

This isn't some specialised VeohTV caching, it just happens that my ISP has a cache with ABC content on it. A YouTube clip downloaded through VeohTV came from Google servers on the internet, so VeohTV clearly leaves the hosting and distribution costs with the content owners.

The Battle for Eyeballs
The winner of the standards war will be where a significant chunk of advertising revenues land. Joost are aiming for the same pot but offers the whole OS in its value proposition. Perhaps in doing so, Joost gains a little more control than the media moguls want to give up yet. There is definitely some hedging of bets going on, with VeohTV as one of the disruptive forces, but this is a battle where inb the end "there can be only one" (or two perhaps).

Consumers are not going to runs lots of different software applications to watch different channels - there is an aggregator role to be filled. In spite of the technical and philosophical differences, VeohTV is fighting Joost, YouTube, Babelgum and even Kontiki for this role.

VeohTV's stance as a light touch aggregator rather than a value added network provider is interesting as it gives content owners the choice between open and closed networks at a time when the right way to distribute video is still unclear. There are elements of closed networks like DRM which weigh heavily in its favour, but VeohTV effectively deals with other features like specialisation and video playback quality that were also thought to favour closed network applications.

On the other hand, open networks have often won internet standards battles - or at least held onto a position in the face of a proprietary goliath - because no managed service can properly scale to deal with the breadth of the opportunity in an open system. Veoh's model has a chance of survival, even if it may not dominate.

More Than Meets The Eye
While there has been aggressive posturing and threats of legal action from those who want us to believe that VeohTV's approach amounts to piracy, Veoh is not entirely alone out there - Michael Eisner, formerly CEO of Disney sits on the Veoh board and Time Warner are also investors. Disney own the ABC service I tested - oh, what a tangled web we weave...

Many might not notice the time-lag between a video appearing on ABC.com and on Veoh's ABC channel, but it is there if you are interested in the above screenshots. Old news anyone? These snaps were taken at 2.45pm on the 17th August, before the webcast from that day was released so ABC.com is current. Veoh still has the video from the 15th August as its most recent - a day out of date. How does this happen...? Does the day's webcast need to be uploaded into the directory after all, or do Veoh and Disney's owners ABC have a delayed publication deal?

The delay is enough to make me wonder whether VeohTV really is an open network after all or whether it just another publishing platform with gatekeepers at the door. Perhaps given the nature of the content on their first generation service, we should be glad that they are managing content more closely this time.

Labels: Arootz, catch-up TV, IPTV advertising, Joost, Veoh, video on demand

# posted by Jeremy Penston @ 8/28/2007 09:54:00 AM