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Summary:

Another day, and another online video deal! This time it involves an aging media-entertainment giant, Sony, and a tiny California start-up, Grouper. Sony is ponying up $65 million for Grouper, once a leader in the P2P sharing space, but now a straggler lagging behind some of […]

Another day, and another online video deal! This time it involves an aging media-entertainment giant, Sony, and a tiny California start-up, Grouper.

Sony is ponying up $65 million for Grouper, once a leader in the P2P sharing space, but now a straggler lagging behind some of the newer rivals. The deal, while good news for Grouper team, indicates a larger malady that has gripped Sony: confusion.

The deal is between Sony Pictures, but the management teams are talking about devices, cameras and in house distribution. Sony Pictures does legal content, Grouper – well it has a bit of “anything goes” culture. Given Sony’s past track record when it comes to “synergies” this buy is mysterious at best.

Sony has bigger problems: it is an electronics giant which hasn’t had a hit in years; it doesn’t have a single must have device on the market; the future of its savior in recent times, the PlayStation, is still questionable, and its core CE business is getting commoditized. Without great devices, Sony is just another fading brand, living off its glory days. Music and Movie businesses are going nowhere fast.

What it needs is complete revitalization, a focus and a plan – maybe Grouper is start of that, but I am not holding my breath.

Update: Hitwise data shows that Grouper.com has increased its market share of web visits by 1,678% from January 2006 to July 2006. Comparing the week ending August 19, 2006 versus the week ending January
7, 2006 Grouper.com has increased its market share of visits by 1,144%. Grouper.com received 41.10% of traffic from the Yahoo! Video Search website for the month of July 2006.
(Read the press release, that says it all.)

  1. no Sony hits? And Bravia is what–chopped liver?

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  2. How many of your neighbors have Bravia? How many in your friends circle. And that is the issue. Even PSP did not pan out for them really!

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  3. my gosh, onm, your bubble fever is heating up. congrats and all to the grouper folks, but what the heck does it mean to say “Grouper.com has increased its market share of web visits by 1,678% from January 2006 to July 2006″? That would be true if Grouper had only one “web visit” in Jan 06 and then 17 in July 06, no? (What exactly is a “web visit” anyway? Is it a unique visitor? Or a unique visit? Or none of those?)

    Likewise, what in the world does it mean to say “Comparing the week ending August 19, 2006 versus the week ending January 7, 2006 Grouper.com has increased its market share of visits by 1,144%”? Again, have they increased from one “visit” in the first week to 12 in the latter? And does that mean they have a big site user base? Compared to what? And by who? And what is a “visit”?

    Hot dang, we be bubblin’!

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  4. This deal is all about two things IMO:

    1. Sony wants to stay cool and relevant (think eBay-Skype)

    2. The platform. Grouper is a web-p2p hybrid media distribution platform. Sony, if its smart, will leverage it to pioneer a standard in commercial, hi-res video and film distribution. A more likely scenario is that Sony will be Sony, and make it a propriety platform for their content and devices only.

    At any rate, the shakeup is upon us. Look for other hip Web 2.0 startups with hybrid web-p2p distribution platforms (MetaCafe, Veoh, Pando) to get gobbled up next.

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  5. Steve, you right. We be bubbling. Anyway I was being greedy and saving rest of the information for another post. You guys want me to post the comparative data etc, in this post or a new one. Your call. Saves time for me.

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  6. For my money, Metacafe gets gobbled up first – Disney would be a perfect partner for them. Or TW, if they can figure their game out.

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  7. For Sony the $65M investment, is not a large one, but one which may enable Sony to create some new and interesting products.

    It is no doubt that the music and film industry must renew themselves, if they are going to make headway now and in the future. One of the key elements that Sony will need to focus on, which I am sure Sony is doing, and that is to find a way to make money off their films and music online.

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  8. [...] to join its corporate parent, Sony Pictures Entertainment. The move comes more than two years after Sony acquired Crackle, then called Grouper. It is also being accompanied by the departure of most of Crackle’s [...]

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  9. [...] join its corporate parent, Sony Pictures Entertainment. The move comes more than two years after Sony acquired Crackle, then called Grouper. It is also being accompanied by the departure of most of Crackle’s staff, [...]

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  10. [...] fruit. Total streams on the site are up 84% in the first quarter. At some point Sony’s $65 Million acquisition of the former P2P sharing site will start paying [...]

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