Veoh CEO Steve Mitgang may be winning his battle against the perception that his Web video destination is mainly a home for anime and porn.
Veoh, which launched in 2006, regularly attracts about 3 million monthly visitors. It recently struck ad deals with Outback Steakhouse, Mini Cooper, Sony Pictures and Maybelline and has raised more than $69 million in venture funding from high-profile investors including Michael Eisner, Intel, Adobe and Spark Capital. Veoh also has partnered with ABC this year and now runs hits such as “Grey’s Anatomy” and “Desperate Housewives.”

WHAT THE DOCTOR ORDERED ‘Grey’s Anatomy’ is among the ABC shows available via Web video provider Veoh.

The recent financial and advertising wins follow Mr. Mitgang’s efforts to police the site’s racy content more closely. It’s a battle that reflects the tension felt by Web video sites that want the kind of traffic drawn to naughty fare but fear alienating advertisers.
“We do not want to be a focal point for adult content,” Mr. Mitgang said. “We have a fairly rigid policy and we make sure the site isn’t overrun with porn. We have HBO-level nudity and we make sure that content is put in a category of ‘sexy’ and is only enabled by 18-year-old filters and registration.”

Veoh CEO Steve Mitgang

That seems to satisfy advertisers. In the last year Sony, Lionsgate, Mini Cooper and Microsoft have reupped on Veoh, Mr. Mitgang said. He said he expects the site to become profitable in mid-2009.
But lingering perceptions of Veoh, along with the range of programming options on the site, are still causing some confusion in the market. Some Web video experts and advertisers aren’t clear which audience Veoh is targeting and what it’s trying to be.
Other sites are easier to understand: YouTube is the dominant video site, Break draws young men, Hulu houses network content.
“It’s hard to see how Veoh fits in,” said Greg Sterling, principal with Sterling Market Intelligence.
“It’s been a challenge to put them in a specific place,” agreed Chris Allen, VP and director of video innovation at Starcom. “From an ad perspective, if you are looking for professionally produced content to sponsor, most will go to Hulu or ABC.com or even Break for something. Veoh could carve out a niche as the 800-pound gorilla for high-quality content, but it’s tough with Hulu’s backing from NBC and Fox and others.”
Mr. Mitgang said Veoh’s strategy is to be the No. 1 destination for high-quality content online.
“We are one of the top sites on the Internet for watching long-form shows from CBS, ABC, as well as independent material, tech talk training shows, lifestyle and cooking shows, sports and videos, professional and semi-professional. And it’s all getting watched,” he said.
So is the racier stuff. If you turn off the family filter on Veoh Networks, you’ll find a video of two men blindfolding, handcuffing and stroking a young woman who wears nothing but a bikini. Alongside those videos you’d come across a “sex channel,” an “18-plus channel” and an “XXX channel,” which includes clips of topless women delivering the news.
Mr. Mitgang said the R-rated content does not drive most of the views on the site. In fact, the most popular content category on Veoh is animation, he said.
Other recent successes for Veoh include winning an important court battle last month. In August Veoh was granted copyright immunity by a U.S. District Court judge in a case brought by adult-video studio Io Group. The studio claimed Veoh violated its copyright by showing clips from its films. Veoh won the case, but the victory comes with its own complications.
“Of all the people you want to be sued by, it’s probably not a porn company,” said Adam Kasper, senior VP and director of digital media at Media Contacts, a division of Havas.
But Mr. Kasper said he has bought ads for clients on Veoh.
“I would consider them along with any of the other sites out there beyond the network sites that offer high-quality, professionally produced content,” he said, adding that the ABC partnership has helped Veoh become a more credible platform for advertisers.
Will Richmond, analyst with VideoNuze.com, said he views Veoh as a broad-based aggregator of programming from providers such as Howcast, ABC, RipeTV, Celeb.TV and others.
But aggregation is a tough business, because the top criterion for success is traffic, Mr. Richmond said.
“Veoh is going to be competing with aggregators head-on like YouTube and Hulu, and the question is how many aggregators does the world need? That’s not to say Veoh won’t be one of them, but there are only going to be a finite number that make it,” Mr. Richmond said.
Spark Capital is betting Veoh will be one of those that does.
“No one has really captured the long tail in longer-form or semi-professional content, and Veoh has always been going for that,” said Todd Dagres, a partner at Spark Capital, a Veoh investor. He also expects Veoh will turn a profit in 2009.
In July Veoh delivered 48 million video streams to 2.8 million unique users, according to Nielsen Online.
Online audience measurement service Hitwise reports Veoh’s users are evenly split between men and women.
In terms of age demographics, for the four-week period ending Aug. 23, about 30% of Veoh’s users were 45 to 54, 20% were 35 to 44 and 21% were 25 to 34.
The top four sites driving traffic to Veoh are Google, which accounts for 18% of the traffic to Mr. Mitgang’s operation, followed by YouTube, MySpace and Yahoo. Those numbers suggest consumers are actively seeking out either Veoh itself or the type of video content the site houses via search engines.
Mr. Mitgang said Veoh is adding more functionality related to search and discovery of content on the site.