Online video-sharing Web site Veoh announced Wednesday that it was laying off 20 percent of its workforce, or about 20 employees, in the face of a softening ad market.
A Veoh representative blamed the uncertain economic climate for the cuts, but insisted that company revenue was growing at a healthy clip.
"We know the realities of the market," spokeswoman Gaude Paez said Wednesday. "But no one knows how soft the ad market will get."
Paez went on to say that the company is "in good shape" and has "plenty of cash in the bank." Although she wouldn't reveal how much funding remained, she did say the company was growing revenue 20 percent each month and that revenue was in the "double-digit millions" range.
The layoffs come less than a month after it denied rumors that it was gearing up to lay off 40 percent of its workforce. At the time, Paez told CNET News that the only recent or planned cuts were the elimination of 15 to 18 jobs based in St. Petersburg, Russia, that were transferred to the U.S., Paez said.
The company announced in June that it has received another round of funding, this time for $30 million, from such new backers as Intel and Adobe Systems. Previous investors include Goldman Sachs and former Disney CEO Michael Eisner. The investment brought the company's total money raised to $70 million, giving the video-sharing site a valuation of about $120 million.
However, Veoh, which competes with YouTube and Hulu, hasn't managed to break out of the pack of also-ran video sites.
There seems to be some disagreement over the financial health of Veoh.
The online video-sharing site allegedly laid off 40 percent of its 110-person workforce, according to tech gossip blog Valleywag, which on Monday credited "an online-video industry insider" with the tip.
However, a representative for the company told CNET News that the report was false.
"I have no idea where their sourcing is coming from," spokesperson Gaude Paez said Monday, adding that she was disappointed Valleywag didn't contact the company for comment. "Everyone who was employed here Friday was employed here today, and will be tomorrow."
Veoh had eliminated 15 to 18 jobs based in St. Petersburg, Russia, and was in the process of transferring the jobs to the U.S., Paez said. Paez also told NewTeeVee that a rumor posted to that site saying Veoh would be "$20 million in the hole" at the end of the year was untrue.
The company announced in June that it has received another round of funding, this time for $30 million, from such new backers as Intel and Adobe Systems. Previous investors include Goldman Sachs and former Disney CEO Michael Eisner. The investment brought the company's total money raised to $70 million, giving the video-sharing site a valuation of about $120 million.
However, Veoh, which competes with YouTube and Hulu, hasn't managed to break out of the pack of also-ran video sites.
Doug Morris, chairman and CEO of Universal Music Group, confirmed that his company is considering a plan to build a Web site to showcase its music videos instead of posting them to YouTube.
Morris, impresario of the largest of the four top recording companies, told Billboard that if the company decides to go ahead, the site would launch in January and would likely partner with another label. But why is he dissatisfied with YouTube?
"With YouTube, the quality (of video) isn't great; it gets low [cost per thousand, or CMP]," Morris, 69, told Billboard. "On the other hand, more professional (services) get a higher CPM. So the idea of us getting tied into a lower CPM isn't a smart thing. Why would you want to be in the middle of music-generated product that doesn't demand high CPMs? I haven't made up my mind completely."
Last month, CNET News broke the story that Universal was working on a Hulu-esque site that would feature videos and other content from the label's artists. Sources familiar with the plan told CNET that Morris had for a long time believed that the company should look at music videos as a revenue generator instead of just a promotional tool. They said he has recently grown dissatisfied with the ad money coming from YouTube and was considering alternatives. It's been well documented that YouTube has struggled to attract premium advertisers and apparently Morris believes his music videos deserve higher rates than what YouTube typically gets.
Asked to respond to Morris' comments, a YouTube spokeswoman issued this statement: "We have great partnerships with major music labels all over the world that understand the benefit of using YouTube as another way to communicate with their fans."
Universal is amid talks to renew its current agreement with YouTube, which brings up the question: is Morris seriously considering a YouTube competitor or is this just a negotiating tactic?
YouTube, the world's largest video-sharing site, attracts about 75 million viewers worldwide each month. How long does Morris think it will take him to attract that many eyeballs? On the other hand, music videos are typically YouTube's most popular clips. Universal's videos have logged more than a billion views.
As for the promotional benefit YouTube is supposed to provide, Morris is skeptical. "We don't look at anything as promotion. Take a look at MTV. It turned out to be a disaster for us. We sold some records, but they built this huge company and we gave them our (music) for nothing, and what did we get?"
Later he said: "At some point we changed our video business from a deficit to a profit because we're getting paid every time someone views one of our videos."
Universal Music makes well over $20 million a year on videos, according to Morris. As for the rest of the interview, the former songwriter said Steve Jobs is the smartest person in music: "We consider him a friend." He also discussed the company's strategy of taking equity stakes in music services, such as MySpace Music: "No one's going to build a business off our backs if I can help it without us being part of it."
On the music industry's policy of suing file sharers, Morris said "People don't like policemen. I understand that. And maybe they're right. But when you see all the stores close and you lose half your employees and you can't sign bands to record them because people are stealing, we do things to try and stop it."
Updated at 12:11 p.m. PDT with comment from a Viacom spokesman.
Video-sharing site Veoh defeated a copyright infringement lawsuit Wednesday in federal court, potentially giving Google's YouTube a tool in its defense against a $1 billion lawsuit filed by Viacom, according to a report posted on PaidContent.org.
Veoh was hit with a copyright infringement lawsuit in 2006 by the Io Group, an adult entertainment company, but it defended its actions, citing provisions within the Digital Millennium Copyright Act. That provision calls for a party to remove copyrighted material from its Web site, when notified by the copyright holder.
A judge for the U.S. District Court for the Northern District of California in San Jose, Calif., found that Veoh was not liable for hosting copyrighted videos that its users uploaded to its site because the company used an automated process to post videos and did not play an active role in getting the material onto its site. The court also found that Veoh removed the material when informed by the copyright holder, putting it in compliance with a "safe harbor" provision of the DMCA law, according to the report.
The ruling may bolster Google's efforts to defend its YouTube video-sharing site against Viacom's $1 billion copyright infringement lawsuit. In a post in The Wall Street Journal, Google issued this statement:
It is great to see the court confirm that the DMCA protects services like YouTube that follow the law and respect copyrights...YouTube has gone above and beyond the law to protect content owners while empowering people to communicate and share their experiences online.
The Google-Viacom case is still pending.
A Viacom spokesman, however, said the ruling does nothing to change the company's stance on the legality of YouTube's operations.
Even if the Veoh decision were to be considered by other courts, that case does nothing to change the fact that YouTube is a business built on infringement that has failed to take reasonable measures to respect the rights of creators and content owners. Google and YouTube have engaged in massive copyright infringement--conduct that is not protected by any law, including the DMCA.
Italian media company Mediaset announced on Wednesday that it has filed a lawsuit against YouTube and owner Google, alleging that the video-sharing site distributed and exploited its commercial property.
Mediaset alleges that it found at least 4,643 copies of its programming on YouTube on June 10, when it conducted a sample survey. That programming represents approximately 325 hours of material, Mediaset claims.
The media company, as a result, alleges that its three Italian television networks have lost nearly 315,700 viewer days, which, in turn, represents lost advertising opportunities for its television programs, Mediaset alleges.
Mediaset is seeking damages of at least 500 million euros ($779 million).
Google and Mediaset were not immediately available for comment.
YouTube, however, issued a statement, according to a Reuters report:
YouTube respects copyright holders and takes copyright issues very seriously.There is no need for legal action and all the associated costs.
In the United States, the issue of viewers bearing liability for watching copyrighted material posted to YouTube has also been raised, as noted in a blog by Surveillance State's Chris Soghoian.
In the case of Mediaset, the allegations could potentially create more of a rift than a garden-variety copyright infringement case.
Italian Prime Minister Silvio Berlusconi controls Mediaset, according to a Bloomberg report.
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