The race to marry TV with the Web has a new entrant: Veoh Networks, which is looking to combine a Napster-like peer-to-peer network with a viewing recommendation engine to create a limitless video universe with hyper-targeted advertising.
The San-Diego startup, which launches Wednesday, envisions a world of limitless video delivered through broadband Internet connections, where cable and satellite companies are bypassed as content gatekeepers. The key to its system is a peer-to-peer network that uses shared computing power to deliver large amounts of high-quality video. Those videos can then be viewed through TV sets connected to a user's computer, or on iPods and PSPs.
Unlike the original Napster and other early peer-to-peer networks, Veoh is looking to go legit, maintaining a centralized system that will not let users post pirated video. Instead, it is looking to partner with individual content producers, large media companies and users to create a deep library of niche content, compensating creators either through ad revenue or charging subscription fees. Its system lets viewers create their own channels based on their interests, rather than searching site by site. "People understand the right way to watch TV is not to search, but to set guides for what you're interested in," said CEO Dmitry Shapiro.
Veoh is banking on attracting ad dollars by using collaborative filtering, like that used by Amazon's product-recommendation engine, in order to push related content and ads. In the next three months, it will also begin selling 15- and 30-second pre-roll video ads, targeted by viewers' profiles and viewing habits. The ads will be interactive, inviting viewers to watch long-form video for more information. Users' preset channels will also have related ad videos.
Shapiro said this would allow advertisers to create dozens of ads targeting different audiences. "Today, TV advertising is restricted to the privileged few," he said. "[Smaller advertisers] need more targeting than traditional TV advertising can provide."