Eisner, Time Warner Back Veoh

NEW YORK Former Disney CEO Michael Eisner and Time Warner were among the investors in a $12.5 million financing round closed by Veoh, a peer-to-peer video service.

Eisner’s new firm, The Tornante Co., joined Time Warner and Spark Capital in the series B round, which follows a $2 million Series A round by Shelter Capital Partners. Eisner will join Veoh’s board of directors.

San Diego-based Veoh is among a clutch of tech start-ups looking to fundamentally change the television distribution business through new digital technologies. Veoh’s system is a peer-to-peer network that uses shared computing power to deliver large amounts of high-quality video. Those videos can then be viewed through TV sets connected to a user’s computer, or on iPods and PlayStation Portables. Since it harnesses a network of computers, Veoh can distribute long-form content easier than video sites like YouTube.com and Google Video.

Veoh is trying to convince traditional media companies to use its platform to distribute their content, allowing users to conduct their own personalized video channels based on their interests, rather than surfing to individual sites for programming, in much the same way they might set a TiVo Season Pass.

In a statement, Eisner said he was attracted to Veoh because it promises to replace the traditional media programming gatekeepers and offer content owners a flexible way of making money, either through advertising or fees.

“Cable and satellite fundamentally changed the way television was distributed by creating the capacity for greater choice in programming,” he said. “Veoh revolutionizes television again by leveraging the Internet to expand broadcast capacity to the point that every single user, whether an individual or a media company, can create their own ‘channel’ and every ‘channel’ can be supported by its own business model.”