Sony Hooks Up With Grouper

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.)


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