VHX Raises $1.25 Million From Lerer Ventures And Angels To Democratize Video Distribution Online

For years, independent video producers have waited for the time when it would finally make economic sense for them to cut out the middle man and distribute their content directly to their fans. Then a funny thing happened: Louis CK sold an hour-long comedy special online for just $5, DRM-free — and it was a huge hit. Since then, a few others — like fellow comedians Aziz Ansari and the indie producers behind Indie Game: The Movie — have decided to try their hands at the same model, forgoing traditional delivery platforms and going straight to the consumer.

It’s a trend that is slowly gaining steam, and one that New York City- and San Francisco-based startup VHX is looking to take advantage of. To that end, it’s raised a seed round of $1.25 million, which was led by Lerer Ventures, with Chris Poole (moot from 4chan) heading up that investment. The funding also included participation from Bedrocket Media Ventures, indie film producer Keith Calder, Buzzfeed co-founder John S. Johnson, WordPress’ Matt Mullenweg, Reddit founder Alexis Ohanian, MTV founder and Clear Channel CEO Robert Pittman, and Chris Sacca.

Early last year, longtime collaborators Casey Pugh and Jamie Wilkinson launched VHX.tv, a site for discovering cool new videos online and sharing them with friends. But lately the two have been working on a whole different side of the video distribution business, providing a platform that helps independent artists to connect directly with fans and sell them content.

The result has been the release of a couple of high-profile videos that VHX powered: The first was Aziz Ansari’s comedy special Dangerously Delicious, which was sold for $5 directly on the comedian’s website. VHX followed that up with the online release of Indie Game: The Movie, which was made available for $9.99.

In both cases, VHX allowed customers to stream the movie at any time, or to download the video in multiple formats DRM-free. That’s a big contrast to selling on platforms like iTunes or Amazon, which have onerous pricing schemes and put all sorts of DRM and restrictions on videos sold through their platforms. And that’s not even mentioning the user experience, which makes all movies look like they’re being sold by iTunes or Amazon. VHX hopes to provide an alternative, Wilkinson told me by phone, by allowing content owners to create beautiful, highly branded user experiences of their own.

“Before, the Internet was where you went if you couldn’t get a distribution deal,” Wilkinson said. But now, “creators are realizing that they no longer need the distributors to reach an audience… Creators are coming around and realizing that people are really happy to open their wallets.”

According to Wilkinson, that awareness means that VHX has a lot more projects in the pipeline — which is why the startup has raised funding. It’s got a designer, but it’s looking to hire a few more employees to improve the tools it provides to independents to allow them to sell their content. In the meantime, it’s going to continue working closely with creators to help them put their content online and make it available, without having to nab a big TV or studio deal.