Bolt, one of the larger independent online video sites, is selling itself to GoFish to escape its copyright battle with Universal Music Group. We had been tracking this story as it developed, but the New York Times now reports the deal has gone through.
GoFish is a publicly traded video aggregation and search company. It went public through a reverse merger last October. GoFish had 1.4 million visitors in December, as compared to 5.3 million visitors to Bolt, according to comScore. GoFish is paying up to $30 million in stock for Bolt, out of its market cap of $134 million.
In an interview before the deal was done, Bolt CEO Aaron Cohen told us Bolt would be changing its focus, once acquired, to content creation. He said video aggregation, along with its legal intricacies and stiff competition, was no longer an interesting business. Bolt, he explained, would offer its skills at attracting and fostering an internet audience to would-be online video stars.
Bolt-GoFish would look to develop a roster of web content creators, and allow them to keep ownership of their content, Cohen said. This is a similar to efforts from companies such as CNET, blip.tv, and PodTech.
As for its existing content, Bolt is paying a settlement of several million dollars to Universal, and agreeing to pay royalties on any future videos that contain Universal’s music. While Bolt and other sites had defended themselves by citing the DMCA safe harbor — which allows them to wait a takedown notice about copyright infringement rather than using filters to screen videos– it seems that the law is carrying less weight these days.
Since the courts weren’t involved in the case, the law does not change. However, with sites under increasing pressure to police their clips or cut content licensing deals to support them, the precedent is being revised.
Cohen and Bolt president Jay Gould are also involved in a new project, called WikiYou, which has received seed funding from First Round Capital and Mayfield Fund.