Sony Pictures Buys Video-Sharing Site
Posted on: Wednesday, 23 August 2006, 00:00 CDT
By GARY GENTILE
LOS ANGELES - Sony Pictures Entertainment has acquired online video-sharing site Grouper Networks Inc. for $65 million, giving the movie studio a foothold in the fast-growing world of user-generated video.
Sony said Tuesday it does not immediately plan to sell its movies or TV shows on the Grouper.com site, although it may in the future.
Media companies, including Sony, have begun to offer content side by side with videos shot by amateurs on sites such as MySpace, Guba and BitTorrent.
Grouper will remain an independent company based in Sausalito and will retain its current management team, the companies said.
"Consumers are spending more and more time on sites like Grouper, and as one of the world's largest creators of entertainment, we want to be where the audiences are," said Michael Lynton, chairman and chief executive of Sony Pictures, part of Sony Corp.
In addition to featuring short videos uploaded to the site by users, Grouper also provides software that allows people to place those videos on social networking sites such as MySpace and Friendster using its peer-to-peer network. The software also allows others to e-mail the videos to friends and to download them to portable devices.
That kind of "viral" video sharing could be valuable to a studio like Sony looking for new ways to market films and TV shows.
Lynton said Sony views Grouper as a profitable stand-alone business that could boost revenue in the future by selling ads. Big media companies are searching for ways to profit as advertisers move dollars online, away from traditional broadcast outlets.
Sony could also discover new talent on the site, Lynton said.
"If we can find great talent on Grouper, it would be an added benefit," Lynton said.
One of the most popular features on Grouper is "mashups," which encourage users to create new videos from snippets of other videos.
Sony was a pioneer in that area, offering its own Web-based video creation tools in 2001 on a service called Screenblast. The site allowed users to combine clips from Sony movies and tracks from Sony recording artists to create new videos.
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Source: Associated Press/AP Online
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