Video startup Veoh Networks is dead, reports Media Memo:

Veoh, one of several well-funded startups that have tried and failed to cash in on the Web video boom, is finally calling it quits. The company let go of the remainder of its workforce yesterday, and sources say it plans on filing for Chapter 7 bankruptcy protection in the near future.

At launch, Veoh declared it the start of a “new era of Internet television.”

Veoh blew through $70 million in funding, but bet on a proprietary peer-to-peer video client that may have been good technology, but posed a significant barrier to adoption.

As a result, the company ended up having to try and reinvent itself and play catch up to other video sites.

Today, Veoh announced their bankruptcy.

Veoh’s official announcement:

Veoh launched in September of 2005 with a bold goal: To make it possible for anyone with a video camera and a computer to broadcast video to the world.  While others were working on helping people share short video clips, Veoh created technologies that made it possible to cost effectively transport full-length, long-form, high resolution content.  Some of the technologies we pioneered now form the basis for standalone companies and many are now standard features of video services.  We grew our passionate audience base to over 28 million users per month, built a business with a run rate of $12 million, and helped educate many blue chip advertisers about the bright future that online video holds for them.

We built an amazing team of people that put in countless hours, with great passion in our pursuit of changing the world, and were fortunate to have dedicated, visionary investors that supported us with $70 million and many strategic opportunities.

Two years ago, Universal Music Group (UMG), the largest music company in the world sued Veoh alleging copyright infringement.  While we made every effort to convince them that we were not their enemy and had not infringed on their content, they pursued a relentless war of attrition against us in federal court.  We eventually prevailed in a decisive summary judgment that has set an important precedent for the entire industry.

Unfortunately, great vision, a passionate team, tens of millions of users, millions in revenues and victory in court were not enough.  The distraction of the legal battles, and the challenges of the broader macro-economic climate have led to our Chapter 7 bankruptcy.

I would like to thank all of my fellow team members and their families, our courageous, dedicated investors, our suppliers and attorneys, and all of the passionate people that have made it possible for us to be a part of this great revolution of social media.  This is a critically important time in the evolution of the Internet as an open communications medium, and all of us at Veoh wish those companies that continue to innovate in the space, great success.

This chapter of our lives has come to an end, but a bright new chapter will soon begin, and I assure all of you reading this, that we have lots of important work ahead of us.  Stay tuned, you will hear from us again!

Dmitry Shapiro
Founder and CEO
Veoh Networks, Inc.