Veoh files for bankruptcy
Video site Veoh has confirmed that it’s bankrupt and is selling its assets to repay creditors.
Dmitry Shapiro, Veoh’s founder and CEO, blamed the company’s woes on a costly legal battle with Universal. “Two years ago, Universal Music Group (UMG), the largest music company in the world sued Veoh alleging copyright infringement,” he wrote on the company’s blog.
“While we made every effort to convince them that we were not their enemy and had not infringed on their content, they pursued a relentless war of attrition against us in federal court. We eventually prevailed in a decisive summary judgment that has set an important precedent for the entire industry.
While we made every effort to convince them that we were not their enemy and had not infringed on their content, they pursued a relentless war of attrition against us in federal court
The ruling in question was delivered by a federal judge who found that Veoh was protected by the Digital Millennium Copyright Act. However, while the decision bought the company another six months, ultimately it wasn’t enough to keep Veoh afloat.
Veoh has now let its staff go and is heading for Chapter 7 bankruptcy, under which the company will sell off its assets in an attempt to repay creditors.
Veoh was one of a number of web companies which looked to cash in on the web-video boom – a mission aided by over $70 million in investor funding from companies including Goldman Sachs, Time Warner and Intel.
Despite the funding, 28 million visitors per month, and earnings of $12 million, the company was forced to let a third of its staff go last year, as Shapiro set about trying to find a buyer for the company.