Veoh Shuts Down; What Happens To The Lawsuit?

from the that's-not-good dept

Thu, Feb 11th 2010 6:00pm — Mike Masnick

Veoh was one of a number of online video YouTube-wannabes that, despite being connected to Michael Eisner and raising money from Time Warner and Goldman Sachs, never got very much actual traction... and... got tangled up in a lawsuit with Universal Music pretty quickly over alleged copyright infringement, despite Veoh abiding by the DMCA. Every single step of the way, Veoh basically won big in the lawsuit. Time and time again, every trick that Universal Music tried -- including suing Veoh's investors directly, was rejected by the judge, and the final ruling late last year was that Veoh abided by the DMCA and was protected by its safe harbors from Universal Music's lawsuit. It was a complete victory.

The only problem? Veoh spent a lot of time, money and effort on this lawsuit, and no one was using Veoh.

I'd heard about a month ago that the company was flat broke, but that it had a good chance of raising more money to continue fighting the appeal from Universal Music... but it looks like that fell through. The company has laid off everyone and is shutting down. Those involved with the company are blaming Universal Music... and certainly it's tempting to blame UMG and this pointless lawsuit, which definitely sucked up a ton of resources. But, let's also face facts: no one was using Veoh. When was the last time you were sent a Veoh video? I get sent videos on YouTube, Hulu, Vimeo and even DailyMotion every so often. But I can't recall ever hearing about a Veoh video.

Still, with the company declaring bankruptcy, I'm not quite sure what this would mean for Universal's appeal in the lawsuit. While the company was a total flop, the district court ruling last year set a very important precedent in clearly stating that the DMCA's safe harbors did protect such sites (like YouTube) as long as they complied with the takedown process. Without a company to continue fighting what happens to the appeal? I'm not that familiar with how bankruptcy plays into such lawsuits, so any lawyers here want to chime in and let us know....

Update: Surprised that no one actually answered this question in the comments, but thankfully Eriq Gardner from THR, Esq. has a post explaining what happens to the lawsuit now in all probability:

If Veoh declares Chapter 7, a bankruptcy judge would issue an automatic stay in the case. UMG would likely file a motion with the bankruptcy court seeking relief from the stay to perfect its appeal. The trustee would engage legal counsel and make financial arrangements to cover the costs of defending the case before the 9th Circuit.

We're betting that all of this happens. The requiem on Veoh is now being written, but the company could continue to play a significant role in helping shape copyright liability for tech companies. (We wouldn't even be surprised to see Google acquire Veoh just so it could share in the fun of the action.)

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Filed Under: copyright, dmca, lawsuits, video
Companies: universal music, veoh

23 Comments

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Zebragravy, 11 Feb 2010 @ 6:46pm

vewho?
I know I never heard of Veoh until the news about lawsuits started appearing. Sure, Universal might be part to blame... but the company really didn't promote itself very well.

I have, however, heard of all of the other sites listed.
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Nick Mc, 11 Feb 2010 @ 6:50pm

Huh?
Again, who are Veoh? I admit to being out of the loop. Never heard of them either. Could this be a reason why they went belly-up? If people don't know who you are and there'e no 'buzz' (bad word to use today...sorry) about you. How will you succeed?
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Epsyle (profile), 11 Feb 2010 @ 6:52pm

I quite liked veoh actually. Used to watch different shows on various sites and it was almost always either an embedded video using megavideo or veoh. Veoh was pretty decent as far as the actual player, never been to the website however.
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Nick Taylor, 11 Feb 2010 @ 7:41pm

Didn't Veoh need you to download a special player or something?

The most I know about it is that they managed to trick google video search into thinking they were providing actual-length videos, when really they were tricking you into watching 5 minute excerpts and if you wanted the whole thing you needed to download the player.

Or something.

They had a lot of good documentaries etc though. People were uploading stuff - but they got the memetic angle wrong.
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bob, 11 Feb 2010 @ 7:51pm

Grok and SCO
"I'm not that familiar with how bankruptcy plays into such lawsuits"

Go to groklaw and check out SCO.
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manangel, 11 Feb 2010 @ 7:53pm

id never heard of Vimeo or DailyMotion (which i thought was a picture sharing site) and hulu is only avaliable in the united states of self-interests.. i would have preferred that veoh become the main video site, except it was more DLC than people uploading whatever.
like mininova, it was a bastian of anti-corperate ideas and its a shame to see that much more freedom of expression gone form the world
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Anonymous Coward, 11 Feb 2010 @ 8:07pm

A lot of anime fansubs hit veoh. As far as I can figure, that was actually the main reason to go there. Their allowed video length was actually even setup with the idea of anime episodes. They tried to curb it to something much smaller for bandwidth bills, but found that since the main userbase required a certain length, that they couldn't sustain any users without them.
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Epsyle (profile), 11 Feb 2010 @ 9:02pm

Re:
I shall now have to resort to megavideo and it's 72min per few hours limit. :(
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xenomancer (profile), 12 Feb 2010 @ 12:29am

Resource Drain
Don't forget the redirection of funding to legal fees probably weighed heavily on Veoh's advertising budget. As is a risk in many markets, Veoh suffered from obscurity in that a lack of traffic directly impacted its lack of income.
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Anonymous Coward, 12 Feb 2010 @ 5:37am

I had a Veoh plugin in my old xbox (with XBMC). I haven't visited or seen Veoh since I built a full HTPC.

You can't entirely blame the lawsuit, but that's money that didn't go into improving the service, so it didn't help.

Either way, a huge win for Universal despite losing the case. I mean, best case for them had to be getting the site shut down right?
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Burgos, 12 Feb 2010 @ 5:37am

Re: Re:
fastpasstv, videostic, youku?
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Jami, 12 Feb 2010 @ 6:14am

I used Veoh and I liked it to find good quality music videos I wasn't able to find on YouTube anymore. Vevo launched not too long ago and it is much better as a music video webstie in my opinion.
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Josh in CharlotteNC (profile), 12 Feb 2010 @ 7:25am

Re: Grok and SCO
This situation would be very different than the SCO saga. With SCO, the company who kept the lawsuit going was the one that was bankrupt. SCO kept getting investments in order to keep the pointless lawsuit going in the mistaken attempt the lawsuit would be successful and they'd get a ton of money.

With Veoh, the company defending against the pointless lawsuit is the one that is bankrupt. Even without the lawsuit, Veoh isn't profittable, so I doubt there'd be any investors, because even with a win, all they get is a ruling that says Veoh doesn't have to pay any money to Universal. But they're still bankrupt.
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Kevin, 15 Feb 2010 @ 11:21am

Veoh killed Veoh
Those idiots, they did this to themselves. They spent so much time and money on lawsuits, and no one used Veoh, but for some reason they never stopped to wonder why? Or answer to their own community? So many people, even core users, complained about their download client. How it uses tonnes of computer resources just to run without downloading, how it forces you to update to a beta even if you don't want to, cause the beta was often full of bugs. One time I even somehow ended up with two seperate veoh downloading clients. They annoyed their audience so much that no one ever wanted to go there.
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Finland, 15 Feb 2010 @ 2:12pm

Hollywood should keep VEOH alive
Otherwise Bollywood is going to burn the Hollywood. VEOH is the American movie dream and Hollywood should keep it alive. Bollywood can adopt the technology of Veoh and distribute their movies to millions of world citizens!

http://www.veoh.com/users/burninghollywood/
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Epsyle (profile), 15 Feb 2010 @ 9:28pm

Re: Re: Re:
Haven't heard of the other too and youku has always been kinda faulty on me. Think I found a new one anyway. :D
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Vella, 15 Mar 2010 @ 4:21pm

Why are you posting if you haven't heard of anything? Keep using your IE, Hotmail and YouTube, and leave commenting for the people who understand something.
After brilliant Stage6 was gone, there was still Veoh...
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Silver, 12 Apr 2010 @ 8:33pm

This sucks! I loved this site. I posted tons of videos on facebook for it and tried to get my friends to join. It will be sorely missed. This was a great source for fansubs(anime) and such.
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Shucks, 12 Apr 2010 @ 9:08pm

Sad!
I am actually very sad that Veoh is gone. I didn't like it when you had to download there plugin to watch a full length video or when they changed the plugin. But I got used to it because they gave the least trouble when watching something full length. Even if it lasted 3 hours. Megavideo has it's limits, so I barely go there. I am disappointed because Veoh was one of my best options. I hope they come back under a new name. Here's to hope for a new beginning!
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Anonymous Coward, 12 Apr 2010 @ 9:20pm

Re:
Their player was a pretty much a video version of music sites like Pandora or Last.fm, you can watch the embedded videos, or load them to your Veoh library, after a while, it gets a taste for what you like, gives recommendations. Although, it seems that it is useless now, since I can't find any operating Veoh links or embedded videos anywhere.
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Anonymus, 13 Apr 2010 @ 6:16am

i did like watching videos from veoh, it had better quality and was quite a lot faster than youtube, so i dare to say that veoh was better than youtube when i was watching something.
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Megla, 13 May 2010 @ 2:01pm

Veohs biggest flop was banning more than half the world from their site with no prior notice at all.

But i did enjoy visiting their site before they banned my country.
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Jessie, 13 May 2010 @ 6:57pm

I love Veoh
I am from Asia and Veoh was used to be one of my best choices watching full-length movies (in English or with English subtitles) with good quality. There're quite a ton of rare (and good) movies in Veoh that I could barely find out in other sharing spaces, such as YouTube and Stagevu. I've downloaded more than 50 full-length classic films around the world from Veoh and I haven't heard of Hulu or Vimeo before. Veoh was indeed an amazing place full of treasure if you know how to dig them up. I am sad that they have to shut down, but Veoh will always remain as one of the greatest sites in my memory.
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