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Summary:

Video-sharing startup Veoh has blocked visitors from all but 33 countries from accessing its site, a spokesperson confirmed to NewTeeVee today. Veoh’s Gaude Paez told NewTeeVee, “The markets we are exiting collectively represent less than 10 percent of our viewer base.” She maintained that the decision […]

Video-sharing startup Veoh has blocked visitors from all but 33 countries from accessing its site, a spokesperson confirmed to NewTeeVee today.

Veoh’s Gaude Paez told NewTeeVee, “The markets we are exiting collectively represent less than 10 percent of our viewer base.” She maintained that the decision was “not about saving resources but rather re-focusing those resources.” Paez was not able to immediately provide the list of countries where Veoh is still available.

Competition is high in the video space and we want to make sure we’re differentiating ourselves in terms of products and ad platforms to monetize. As a startup we just have to make choices.

Paez said the company would soon be enhancing its ad targeting and working to expand access beyond the PC.

Users flooded the Veoh forums with complaints over the weekend, saying they felt discriminated against for being from certain countries: “I’m from Dominican Republic, and when I saw that message I really wanted to cry…. I still want to,” wrote one user, and “this is very unfair not even an email alert i just couldn’t enter, its sucks!!!” said another.

According to Wikipedia, users report being blocked from Lebanon, the United Arab Emirates, Malaysia, Indonesia, Chile, Argentina, St. Kitts and Nevis, Guatemala, Luxembourg, Costa Rica, the Dominican Republic, Venezuela, Brazil, Puerto Rico, Guam, Jamaica, Barbados, El Salvador, Hungary, Malta, Macedonia, Slovenia, Slovakia, Ukraine, Colombia, Cyprus, Romania, the Cayman Islands, Guadeloupe, Saudi Arabia, Peru, Panama, Czech Republic, Turkey, Croatia, Lithuania, Jordan, Egypt, Bulgaria, Serbia, Iceland, Bermuda, Thailand, Brunei, Honduras, the Bahamas, Nicaragua, Anguilla and Guyana.

Paez said Veoh is “absolutely not” running out of cash, but she did confirm the company is looking for funding. “We’re in the midst of talking to additional entities, partnerships and looking at strategic things as well,” she said. Veoh has raised more than $40 million from Goldman Sachs, Tom Freston, Jonathan Dolgen, Shelter Capital Partners, Spark Capital, Michael Eisner’s Tornante Company, and Time Warner Investments. Update 6/3: Veoh raised $30 million more from Intel, Adobe and others.

We wonder if Veoh’s move portends a long-expected shakeup in the online video industry — after all, these services aren’t paying for themselves yet. Lack of overseas revenue is hardly their only problem. Earlier this year, when DivX shut down Stage6, its high-quality video-sharing option, it cited operating expenses. Ironically enough, Stage6 (now just a landing page) prominently recommends Veoh as an alternative for its users (“Stage6 is introducing Veoh Networks Inc. as a site that promises to offer our users a smooth transition. Millions of people use Veoh each month and we feel it is a great fit for our users.”).

Hat tip to Andrew Baron at Dembot.

  1. This seems to be a trend lately. One I don’t understand at all. Why deliberately block out part of your audience or potential audience? I just wrote a blog entry at my site this weekend about how the BBC is blocking US citizens from their shows and even commercials.

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  2. IMO, this seems like a smart business move – why spend money serving every single country on earth when you can’t generate revenue from them? A giant like YouTube has Google’s coffers to help keep service in Malaysia and Cyprus up and running, but it doesn’t make sense for smaller, privately funded companies to sacrifice good business just so they can keep everyone happy.

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  3. It’s all about the ad revenue. Apparently it’s easier to block countries and tell advertisers that you’re specific to x region than it is to combine advertisers in specific regions and videos that are being viewed by a user in x country.

    I’m sure you can hike up CPMs now that the ads are “Geo” targeted.

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  4. [...] All StoriesWebBroadbandInfrastructureMobileVoiceFoundReadStructure 08Archives Veoh Re-focuses, Blocks Some International Access — Has the long-expected shakeup in the online video industry finally arrived? Video-sharing startup Veoh has blocked visitors from all but 33 countries from accessing its site, a spokesperson confirmed to NewTeeVee today, citing the desire to “re-focus those resources.” She said, “Competition is high in the video space and we want to make sure we’re differentiating ourselves in terms of products and ad platforms to monetize. As a startup we just have to make choices.” To continue reading this story, click over to NewTeeVee. [...]

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  5. Hi Devon, i AM from Malaysia , and thanks for your condescending comment.
    And congrats to Veoh, i think you have very successfully differentiated yourselves!

    While i accept downsizing as a sometimes necessary business tactic, it is ‘usually’ accompanied by a timeline and assistance for users to move accounts and services elsewhere. I think they’ve moved suddenly and without warning so as to limit most of the complaints and commentary to those from the affected countries – in the hope that they’ll be largely ignored by the twitterati of the infinitely more important group of 33.

    I alwys thought Eisner was a jerk anyway

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  6. apologies Devon, my frustration should have been directed at Brian E

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  7. Captain Crap Monday, June 2, 2008

    What a bunch of idiots at Veoh, this must be the dumbest thing I’ve ever heard of.

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  8. [...] running out of cash, why would you block all but 33 countries from accessing your web site? Video-sharing site Veoh, has done just that, but is not claiming a lack of funds, but simply a "re-focusing" of [...]

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  9. [...] NewTeeWee gestern berichtete, hat die Online-Video Plattform Veoh den Zugang zu seinen Diensten nahezu [...]

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  10. As someone who runs an online video site, I can understand why Veoh would want to block some countries, but they went about it the wrong way.

    (1) You have to communicate with users and explain things, otherwise you earn their wrath.
    (2) Veoh should offer them a fee-based version for countries that are currently hard to generate revenue from – they will either generate revenue to cover the delivery costs or they will reduce the users from that country automatically due to the new barrier.

    It is extremely hard to monetize limited amounts of traffic from multiple countries because most ad networks are only interested in specific regions. Also, approaching advertisers in EACH country is too time-consuming.

    It makes no financial sense to spend money serving video to users in Jamaica (where I am from) if you generate $0 from that traffic. You either find a way to monetize that traffic and at least break-even, or you eliminate that cost, otherwise you are throwing away money.

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