Tuesday, February 16, 2010

Veoh is Bankrupt!

Veoh according to various sources has filed for Chapter 7 bankruptcy last week (Feb 12). It seems though that few people know about this. In layman terms, Chapter 7 bankruptcy is where Veoh will sell its assets to repay it's creditors. In another words, Veoh will cease to exist.

Although the founders of Veoh has indicated that something might be brewing, I could not think of a business model that Veoh could transform into that would rival YouTube. The amount of infrastructure in place to enable video streaming is quite a significant investment and till now, even YouTube has not found a business model that would enable it to be self-sustainable.

I believe that a business is not sustainable if it's just purely dependent on providing advertisements for its revenue. The Internet is a good platform to reach a global audience but in the end, the business plan must indicate how revenue is coming in and how the figures are derived.

IT has always been a difficult line to be in. R.I.P Veoh.

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