Scoop: Skype founders gunning for Netflix with Vdio

Updated. With Skype’s sale to Microsoft (s MSFT) finally sealed, one might wonder: What are Niklas Zennstrom and Janus Friis, the European serial entrepreneurs that have founded KaZaA, Skype, Joost and Rdio, up to next? The surprising answer: The duo Friis is giving online video another shot – and this time, they seem he seems to be gunning straight for Netflix. (s NFLX)

Skype’s founders have cofounder has apparently been quietly assembling an A-team of media and web technology experts to launch a site that seems destined to replicate the model behind their music subscription site Rdio in the video space. The new service called Vdio, which hasn’t publicly launch yet, has been kept secret for almost two years. Until now.

Here’s what I was able to uncover:

The mysterious

Vdio's website features a rotating display of high-profile movies and TV shows. recently went live with a splash page that spotlights popular movies like The Dark Knight and Karate Kid as well as TV shows like Mad Men and The Tudors. The site comes with the slogan “Are You Watching?,” and invites users to log in via Facebook. However, visitors from the U.S. are being told that Vdio is “currently available in the U.K. only.” U.K. residents on the other hand learn that Vdio is “coming soon” to their country.

There’s no imprint, no link, no about page. Nothing tells you who is behind Vdio – with one exception: The Vdio logo comes with a small trademark symbol, and a search with the U.S. Patent and Trademark Office reveals that the mark was registered in the summer of 2009 by a company called Pulser Music Services, Inc. The very same company was also behind the launch of Rdio two years ago.

There’s little else to find online about Vdio. Just three people on Linkedin list it as their employee, and no one has ever written about it. The company does have a very sparse Facebook page, which claims it was founded in 2010 and features one single comment, left by a Los Angeles-based web designer:

Enter Project WBS

How did Vdio stay below the radar for so long? By operating under a different name, which I stumbled across when I searched for the European trademark for Vdio. Turns out that the Vdio name isn’t owned by Pulser Music Services in Europe, but by a U.S. company called Project WBS Inc., which was founded in December of 2009.

It doesn't get any stealthier than that: The Project WBS website, as it presents itself to outside visitors.

Project WBS raised some $5.6 million in funding in October of 2010, and amongst the people listed as directors in the SEC filing is Mark Dyne, an old buddy of Zennstrom and Friis who was already on the board of Skype and Joost and also instrumental in getting Rdio off the ground.

The same SEC filing also lists a few more very interesting names: Semion Smushkevich appears as the CEO of Project WBS. Smushkevich’s Linkedin profile shows that he works for Europlay Capital Advisors, which recently helped Friis and Zennstrom with the sale of Skype to Microsoft. Then there’s Joseph Miller, who is managing director of Europlay and also director of Project WBS. Also listed as director: Ian Aaron, whose past includes a stint as president of TV Guide.

And if you had any doubt that Project WBS is simply Vdio in disguise, consider this: A site-specific Google search reveals that a copy of Vdio’s website is available at

The killer team behind Vdio

Meet Vdio's CTO: Former Apache Foundation President Justin Erenkrantz.

Other people on the Project WBS team include its CTO Justin Erenkrantz, who used to be President of the Apache Software Foundation until 2010 and also worked as Chief Architect for Joost, Zennstrom’s and Friis’ ill-fated fist foray into online video.

Erenkrantz is joined by his Joost and Apache Foundation buddy Sander Striker, who doesn’t currently list an employer on his Linkedin profile, but recently made some publicly viewable changes to the otherwise very stealthy Project WBS website.

Speaking of Linkedin: The social network lists around ten people currently employed by Project WBS, plus three folks who have owned up to their involvement with Vdio. The team includes a few more Joost alumni and open source / Apache geeks plus people who formerly worked for TV Guide, NBC and the music subscription incarnation of Napster.

There’s also the former leader of Skype’s visual design team, someone who did content acquisition for Netflix, and, just for good measure, a former systems engineer at NASA’s Jet Propulsion Laboratory who’s experienced in “data management and modeling, data analytics, and statistical analyses of large data sets, including data mining, visualization, and interpretation.” Most people are located in Los Angeles, but there also seems to be ties to the Netherlands, Slovenia and Estonia, where previously much of the Skype development used to happen.

What does all of that mean?

When will Vdio start, how exactly will it look like, and how dangerous will it be to Netflix? To be honest, I don’t know. But researching this extensively, I feel confident to make a few educated guesses:

  • Vdio is currently being tested with a small group of users. How do I know that? That’s easy: Vdio’s Facebook app, which is necessary to sign into the service, currently lists “200 monthly active users.”
  • This is all about subscriptions. Fris and Zennstrom wouldn’t align Vdio closely with Rdio if the offerings weren’t somewhat similar, and they wouldn’t secretly work on a project like this if it was just another VOD rental property. It’s possible that Vdio will offer some free content, just like Rdio does now, but the end game seems to be to compete with Netflix, and not iTunes.
  • Vdio is an international play. The site may launch in the U.K. first, but the company is headquartered in the U.S., with a subsidiary in Luxemburg, and it already has a SVP of global licensing. I think it’s only a question of time before Vdio launches in the U.S. as well.
  • This will get serious. One of the biggest lessons of Joost’s demise was that you won’t compete with the big boys if you don’t have the right content. Judging from the content that’s currently teased at, this could be different this time around. The movies and TV shows displayed on the site come from Warner Bros., AMC, Showtime, Sony and Fox. That’s an impressive list. Sure, Netflix has tied up the U.S. rights to shows like Mad Men, but that doesn’t mean that Vdio won’t be able to scoop them up elsewhere.
  • The timing couldn’t be better. Netflix has been in a crisis ever since its botched attempt to separate its DVD and streaming business, and Hulu’s future seems more uncertain than ever after a proposed sale of the company didn’t go through. Many wouldn’t have given a newcomer like Vdio a chance just six months ago. But now, everything seems up for grabs.
Update: Vdio has now been officially confirmed. Check our follow-up post for a Q&A.

Update 2 (10/18/2011): We’ve been told by a spokesperson for Niklas Zennstrom’s VC company Atomico that Zennstrom isn’t actually involved in Vdio. We’ve corrected the article to reflect this information.