18 Comments

Summary:

Online video has largely succeeded at many of its goals, but let’s be honest, it’s done more displacing and unstabilizing than it has wealth creation. On the eve of Veoh’s bankruptcy, we can look back and see a lot of VC dollars down the drain.

Online video has largely succeeded at many of its goals: It is democratizing media and encouraging a culture of sharing and participation. It’s pushing the television industry to modernize and become more interactive. It’s freeing content from time schedules and repressive windows. It’s driving cable companies to at least consider the true value of the loyalty of their subscribers.

But let’s be honest, it’s done more displacing and destabilizing than it has created wealth. And with a few possible exceptions — say, Blip.tv and Brightcove — no company but YouTube has really been able to grow a ton of value. (YouTube, Google promises, will be profitable any day now!)

Today, on the eve of Veoh declaring bankruptcy (first reported by MediaMemo), we can look back and see an awful lot of venture dollars invested — many of them that have since gone down the drain.

Veoh was actually the first online video company I ever covered, back in the summer of 2005, and if you know anything about me it kicked off a long fascination with the topic, aka our spinoff site NewTeeVee, which I founded three years ago and edited until very recently. Let’s just say I had higher hopes that the startups we covered would go on to become the new giants. Not so much.

Here’s a chart I made a couple years ago (back when many of these companies had already been walking dead, at least in terms of innovation, for a long while). Not a ton has changed since then.


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  1. Don’t forget DEN (http://news.cnet.com/2100-1023-240741.html) The grand-father of all heavily funded (>70MM) web video flame outs.

  2. Japan Online Videos Thursday, February 11, 2010

    It’s kind of sad to see some of the bigger online video sites starting to fade away. But we will survive.

  3. Oh, and don’t forget about Pixelon. The promise of TV on the web back in 2001. They spent millions for one night in Las Vegas…

    http://www.thestandard.com/article/0,1902,15115,00.html
    http://www.wired.com/techbiz/media/news/2000/05/36243

  4. L’Observatoire des médias » Revue de web, revue de liens du 12 février 2010 Friday, February 12, 2010

    [...] Chart: The Web Video Money Pit – GigaOM Qui est derrière les plateformes de vidéo? [...]

  5. Liz,

    A very detailed chart indeed. The only having a unique business model is Hulu and I have strong reasons to believe that Hulu will beat the competition in long term.

    YouTube is trying to replicate a little bit of Hulu by talking to channels and distributors but they will have a hard time change people’s perception about YouTube being a video sharing site.

  6. Chart: The Web Video Money Pit Friday, February 12, 2010

    [...] But let’s be honest, it’s done more displacing and destabilizing than it has created wealth. And with a few possible exceptions — say, Blip.tv and Brightcove — no company but YouTube has really been able to grow a ton of value. (YouTube, Google promises, will be profitable any day now!) Continue reading on GigaOM. [...]

  7. Fantastic chart. I’m working on an article on Google and Apple envy. In the telecom sector everyone is focussed on the success of Google and Apple. Most of them forget the enormous losses of the industry, including the ones of Google and Apple.

    One can think of Youtube as an enormous success, but also as the 1.65 billion failure of Google Video. Who would have thought that some ex-paypallers could beat Google, Yahoo and MSN Video.

  8. A lot of this has to do with content, and advertisers not valuing web audiences – possibly because they wonder if people watching low production value content for short periods of time are worth spending money to attract.

    Video will none the less play an increasing role in successful sites.

  9. Let’s also not forget pop.com – Hollywood’s failed attempt to make a web film site in the mould of Hollywood – the total opposite to sites like YouTube.com

  10. You can add vidavee… 6.5M invested in ’06, 10M + equity exit to vignette in ’08, subsequent exit in ’09 to opentext.

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