Summary:

Orange could benefit from a set of relationships with content owners in its revised approach to digital content distribution if it buys the remaining stake in video service Dailymotion as French reports suggest.

Dailymotion

Mobile network Orange has resolved to buy, by January 2013, the 51 percent of video site Dailymotion it does not already own for more than €72 million, according to Les Echos.

This should not come as a surprise. When Orange acquired 49 percent of Dailymotion for around a €60 million investment in January 2011, it was described as a “two-part transaction, with the rest to follow shortly”.

A full buy-out, which Les Echos says would be made with other partners, appears to make sense for Orange, which has been steadily building up content businesses to operate over its fixed and wireless infrastructure.

 

In 2005, Orange set a target of achieving €400 million in “direct pay content” revenue (music, TV, VOD, games and other) by 2008 – 17 to 22 percent of it from VOD. It operates a large IPTV business in France, one of the world’s top IPTV-consuming nations, and once launched a news portal called 24/24 Actu.

But, in 2010, new CEO Stephane Richard unpicked Orange’s strategy of owning that content, turning its Orange Sports PPV IPTV channels in to bouquets for alternative broadcasters.

In the same way, owning Dailymotion would mean owning an aggregator with which many content owners have struck distribution arrangements.

Orange’s IPTV Livebox in France already carries a Dailymotion app, as do several connected TV sets nowadays. The service claims up to 140 million monthly uniques, is already integrated on to Orange’s web portals, uses Orange’s content delivery network (CDN) and its video advertising sales effort.

But fully consolidating Dailymotion could let Orange itself inherit that set of online content rights, and in a more cost-effective way than by launching expensive TV channels.

Orange still has not launched the VOD site it was reportedly planning in 2009.

The fact Dailymotion is now profitable, after several years of investment requirement, also likely helps Orange’s decision.

Orange last year closed its 24/24 Actu news portal. But it has a key relationship to offer music subscription service Deezer to its customers, so don’t rule out a similar ownership position in future.

One key date, however, is on the horizon ahead of the rumoured Dailymotion buy-out – the site is due to hear in September the outcome of a multi-million euro case in which broadcaster TF1 sued Dailymotion for copyright abuse.

That case was related to the suit TF1 filed against YouTube, which was in May rejected by a French court.

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