VeohTV (see our review) is an Internet TV application which pulls in videos from thousands of sources — which currently includes NBC, CBS, FOX, YouTube, MySpace, and Veoh’s own video-sharing site — with content browsable via a simple channel guide. The idea is to give users access to a wide range of online video content, all within an easy to use, full-screen cable TV-like interface. And while the software has yet to be released to the public, it’s already coming under scrutiny from the companies whose content VeohTV is aggregating. That’s because Veoh is operating without formal licensing agreements.
The New York Times reports that NBC, in particular, is uneasy with VeohTV’s model. If viewers can access full length episodes of “Heroes,” “30 Rock” and “Studio 60 on the Sunset Strip”, for example, without ever visiting the NBC’s own website, then the company is losing out on potential advertising revenue. In VeohTV’s defense, it doesn’t remove any ads placed inside the video streams themselves, but that doesn’t help expose viewers to advertising placed elsewhere on the originating site.
For example, people who watched an episode of “Heroes” on NBC.com last week also saw for 40 minutes a banner ad for McDonald’s on the same page. VeohTV users watching the same episode would not see the banner. Rick Cotton, the executive vice president and general counsel of NBC Universal, said that streaming full-length television episodes drives traffic to other parts of NBC’s site and exposes users to the ads on it.
Moving forward, VeohTV says that it’s willing to strike ad-revenue sharing deals with content owners, while at the same time maintaining that consent to aggregate “free” online video, isn’t necessary.
Another feature of VeohTV is the ability to download and save certain types of video streams to a user’s hard drive — similar to the newly released RealPlayer 11 (see our post ‘Could RealPlayer 11 encourage more DRM?‘). This hasn’t gone unnoticed by the video sharing site, YouTube, who are also accusing VeohTV of steering users away from ads on its site.
There’s no doubt that VeohTV has the potential to disrupt existing business models and challenge legal boundaries, with its maverick approach to aggregating other companies’ content. On the other hand, it could also be argued that VeohTV, by making it easier to discover and enjoy online video, is helping the major studios stay relevant and appeal to new audiences. And for that they should be commended.
However, in the longer term, I’ll predict that the company will eventually be forced to strike formal partnerships with the big content owners or face heavy legal battles.