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Mobile ad network Greystripe’s founders are taking the reigns on video startup YesVideo, the company announced today.

The move comes after Greystripe co-founders Michael Chang and Andy Choi sold the mobile ad company to ValueClick for $70 million last year, which lead to them looking for a fresh new challenge.

YesVideo, which launched back in 1999, is that challenge. The two men have invested $5 million into the startup and will now assume leadership positions, with Chang as CEO and Choi becoming CTO.

YesVideo offers a service that takes a person’s old videos (e.g. VHS and 8mm tapes) and converts them into a digital format for DVD playback and online storage. The overall process of doing this takes a few weeks, and the company has had over 7 million customers since launching. As the resident “tech person” to most of my friends’ parents and my own extended family, I’m frequently asked how to put all those VHS home movies online — so, I can see how YesVideo is fulfilling a need in the consumer market that’s not being met. However, with people only capturing their videos via digital formats these days, I’m uncertain how big of a need there will be for this in the long term.

“We estimate that there are 1.5 billion units of old media out there. That is $20 to $30 billion of digitization services that we are going after, Chang told VentureBeat. “All the digital media companies – like Apple, Amazon, and Roku – are chasing professional content and theatrical movies for their platform. They are missing the boat on the most valuable content for their customers: their personal family memories. You can’t imagine how sticky this service is.”

The company points out that there is a shelf-life on all those old tapes, which will eventually degrade and be lost forever. Chang said there’s also plenty of opportunity to drive business to YesVideo, which no one else is doing in regards to conversion.

“YesVideo is a pioneer in this area, and the only company in the world to have created a massively efficient operation that can easily process over 6,000 physical videos per day,” Chang said in a statement. “Our plan now is to scale our digital products by unlocking various sharing opportunities — via Facebook, Twitter, and YouTube, and by building out our editing tools.”

The Santa Clara, Calif.-based company has raised a total of $26 million in funding from Chang/Choi, Kodak, LSI Logic, and ROVI. It currently employs 300 people and holds 11 patents related to video conversion processing.

Filed under: cloud, media, social

Michael Chang and Andy Choi, the founders of mobile ad network Greystripe, are taking the reins at a new company. However, it’s not the hot new startup you might be expecting. Instead, they’re joining YesVideo, a company founded back in 1999.

The pair has invested $5 million in the company. Chang is now YesVideo’s CEO and has joined the company’s board, while Choi is the new CTO. (The photo on the left shows Chang and Choi at YesVideo’s Santa Clara facility.)

YesVideo takes personal videos in old formats like VHS and 8 millimeter film and digitizes them, so that they’re stored online and on DVD. The process takes less than three weeks, and customers get their originals back when it’s done. This sounds useful (the company says it has already served 7 million customers) — but not, perhaps, like a business with a big growth opportunity or real long-term prospects. Chang admits that one of the common questions he’s been getting is, “Isn’t that a dying business?” His answer? That there are an estimated 1 to 1.5 billion units of personal video still out there, and the need to convert them is becoming more urgent as the material degrades.

YesVideo is also starting to move beyond digitization. As Chang puts it, “Once the content is in the cloud, now what can we do with it?”

So YesVideo has started to build sharing products, so that customers can eventually take their converted videos and easily post them to Facebook, Twitter, and YouTube. Chang also says he could imagine an app in the future where users could watch YesVideo content. He argues that there’s currently a gap in online video — you can find longer, commercial content on sites like Netflix, and you can find shorter, personal videos on YouTube, but there’s no place for stuff that’s both longer and personal. (A skeptic might counter that personal videos are only bearable because they’re short, but we’ll see …)

As for how this all came together, Chang notes that after ValueClick acquired Greystripe last year for $70 million, neither he nor Choi had to stick around to wait for an earnout. Still, they stayed at ValueClick for nine months, and Chang says he still feels good about how Greystripe is doing. But he also acknowledges that “things change” and says, “We just decided that it was time to move on.” Meanwhile, YesVideo’s founder and then-CEO Sai-Wai Fu was ready to move on, and Chang was already an angel investor in the company, so the two started talking and decided that this would be the right move.