Sony Pictures Buys Video Sharing Site Grouper For $65 Million

The rumors were true: Sony Pictures has made its first Internet acquisition in a long long time, and officially enters into the social media arena: it has bought video sharing site Grouper, for $65 million. The company had about $5.25 million in funding, from T-Ventures, T-Online’s investment arm, and Duff, Ackerman, Goodrich.
Grouper was started about two years ago, by Josh Felser and Dave Samuel, previously founder of, which was sold to AOL for $320 million in 1999. The company started as a P2P file sharing client, and then morphed into a video sharing site last year…it has had some success, though nowhere near YouTube in terms if usage (not that anyone else is near).
So the valuation is not really based on traffic…what it does have is a solid management and technical team (CTO Aviv Eyal founder Friskit, for those of you who remember from the late 90s). And user tools which build upon basic sharing, with ability to download any video to iPod, PSP and others portable devices, video commenting and other features. It also has a simple video editing program built in called “Groovie”.
FT: Grouper has just 8 million unique users last month (internal company figures for last month…ComScore says 542,000 unqiyes last month, compared to 16 million for YouTube…Grouper disputes the numbers, says WSJ)). Michael Lynton, CEO of Sony Pictures, said the studio saw a number of possible uses for Grouper, from distributing and promoting its films and TV programs on the internet to serving as a pipeline of new ideas and creative talent. He also argued that Grouper overlaps with Sony Pictures’ consumer electronics parent company. Visitors to the site, for example, frequently use Sony cameras and computers to help create and edit their videos.
Release: No immediate changes are planned for the site. Over time, Lynton said there is potential for development of ad-supported and premium content businesses.
Some points: It’s about Sony realizing they don’t have to invent everything, and trying to prove they can bring in good people and let them do something solid. Secondly, this probably signifies the start of a shakeup in the video sharing space, where other also-rans are struggling to find their footing against the YouTube juggernaut. So you’ll probably see similar buyouts in the next few months…others in the line: Revver, Guba,, Veoh,, PureVideo and countless others.
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