updated 2/12/2007 6:48:55 PM ET 2007-02-12T23:48:55

Veoh Networks Inc. is launching a Web video syndication service Tuesday that uses peer-to-peer technology to distribute DVD-quality video and publish it on the Web's most popular sites, including MySpace and YouTube.

The privately held company hopes to become an online television service, allowing content creators to build their own channels and viewers to easily find and download video.

Veoh hopes to distinguish itself from competitors such as Brightcove, Revver and others by the use of a peer-to-peer network that will allow the delivery of huge video files more efficiently. With Veoh, users share the load of transmitting content, which is generally sent in small chunks from PCs that have its software installed.

The company is also touting its virtual digital video recorder service, which allows users to subscribe to programs or download video from any Web site.

The San Diego-based company has raised $12.5 million from investors such as Michael Eisner, former chief executive of The Walt Disney Co., Time Warner Inc. and private venture capital firms.

Once content creators upload their videos to Veoh, the content can be instantly syndicated across the Web to popular sites such as YouTube and Facebook. The videos also can be distributed to blogs, Really Simply Syndication feeds and portable devices such as Apple Inc.'s iPods.

The site has already signed deals with US Weekly magazine to create a celebrity news channel. The Hollywood talent agency UTA also has agreed to create a channel to audition clips from aspiring filmmakers and actors.

The service allows content creators the flexibility to include advertising in their shows or sell clips on a rental or download-to-own basis. Users also could be charged a subscription for a season's worth of programs.

Veoh Chief Executive Dmitry Shapiro calls his service a "virtual cable operator," that can support an unlimited number of channels.

"It's not about the studios coming in and rebroadcasting the same stuff you can find on TV," he said.

With Web video ranging in quality from studio-created shows that are found on iTunes to user-generated clips found on sites like YouTube, analysts say there is room in between for professional-looking amateur content.

"In the middle is where things get interesting," said Joe Laszlo, an analyst at Jupiter Research.

The market served by Veoh will continue to grow but is probably finite, leading to consolidation in the next few years, he said.

"There is a finite pool of talented content creators," he said. "It's vastly overstating the case that anybody can be Steven Spielberg."

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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