Veoh Quits Viral; Should Portals Make Content?

Veoh last week discontinued Viral, its original video show, by laying off host Sunny Gault. Gault was the only member of the cast and crew who was a full-time employee, the company told NewTeeVee. The show’s final episode is embedded below:

Viral, which debuted in November 2006, looked at the world of online video from the inside, with Gault interviewing web video creators and tool makers. We’d run into her at many a conference and done a couple interviews on the show. But the show never actually went viral itself, said Veoh spokesperson Gaude Paez, only surging into the thousands of views when it was featured on the Veoh homepage, which until earlier this year auto-played a featured video whenever someone loaded it.

“Now it’s probably averaging maybe less than 100, to around 700 views — so not a whole lot of traction,” she said. “It wasn’t getting as much viewership without the promotion.”

Paez described the move as part of a shift to algorithmic and community-driven recommendations, rather than those chosen by the Viral team. Though she did not work at Veoh at the time, Paez said the show’s original purpose was to “surface independent publishers,” and that the site now had a large enough audience that other discovery tools would be more effective.

And meanwhile, of course, Veoh’s promotional real estate is getting more valuable, with ABC paying the site for any traffic it generates. Viral, meanwhile, had not been effectively monetized, said Paez. And Veoh has been making cuts where it can, despite raising a fresh $30 million in funding; it recently shut down access to the site from all but its most-trafficked countries. Gault’s layoff was one of three positions eliminated last week.

Gault, who told NewTeeVee she would continue to pursue opportunities to be a new media producer and host, wrote on the Viral blog that while being laid off “sucks,” she understood Veoh needed to focus on being a technology company:

I would say this came as a complete surprise, but I’m smarter than that. Anyone who’s working in new media knows this is a risky business. New companies are emerging all the time….all claiming to be the best. On their way to the top, these companies are bound to restructure, reorganize and reposition themselves. So, you really can’t fault Veoh. They’re thinking about the overall well-being of their company and their employees, and I respect them for that. In fact, I totally agree with their decision.

Viral‘s discontinuation brings us back to a point we’ve been discussing a lot lately on NewTeeVee: should web video portals make their own content? In this day and age everybody thinks they can do Internet video — us included! But when should you compete with your users and content producers? How can you make corporate content interesting? And can you actually make any money off of a promotional series?

Clearly, there’s a place for online content shops to both make and aggregate content; we love CollegeHumor’s Hardly Working, for instance. And despite our skepticism, it’ll be interesting to watch Google’s Seth MacFarlane project as well as YouTube’s new independent film initiatives, though they don’t really qualify as corporate content. We’ve heard rumors of a few more original content projects from such sources, and will keep you posted once we can verify them.

Another web video site, Seesmic, also just discontinued its in-house series, Seesmic du Jour, an in-house documentary that chronicled the startup from the day it moved into its first office. Seesmic cited the growing demands of running a business, and said it would continue to produce original content, just not on a daily basis. Yahoo also discontinued its long-running viral video roundup The 9 in March, citing (like Veoh) a need for video content to better align with the portal’s other initiatives. And Mahalo Daily lost its host Veronica Belmont to more focused projects, though it made the best of the situation by mounting a contest to find her replacement.

So what’s the place of original content made by web portals? Do you think it’s a growing opportunity or a waning one? I tend to think production and distribution are two very different skill sets, but I can see the allure of trying to combine the two.