Sony Moves on Web Video With Grouper Buy

Sony Pictures Entertainment is making a foray into the fast-expanding world of Web video sharing by acquiring Grouper Networks, the privately held operator of the grouper.com website.

The Sony unit will pay US$65 million to acquire the company, which counts itself as number two in the Web video market behind YouTube, said Jonathan Shambroom, vice president of product development at the Sausalito, Calif.-based company, in a telephone interview.

Like competing services, grouper.com allows users to upload their own videos and watch other videos through a Flash player. In addition, the site also allows users to download videos to the desktop and offers versions formatted for viewing on Sony’s PlayStation Portable and Apple Computer’s iPod with video. The site also makes it possible for video material to be integrated into a user’s blog and lets users append video comments by webcam to existing material.

Sony Headquarters
Sony Headquarters

Grouper also offers a software tool that allows users to edit video, add soundtracks and captions, and produce finished video pieces. As a result of the acquisition by Sony, it’s possible users could bring in Sony-owned content and combine it with their own material to produce new videos that can then be further shared online, said Shambroom.

The various copyright and digital rights management issues required should Sony add its own material to the site have yet to be fully worked out, but the possibility of Sony content coming to Grouper was a major attraction in acquisition talks, he said.

Under the terms of the deal with Sony, the current management of Grouper Networks will remain in place.

The acquisition comes at a time when Web video-sharing sites are booming. In July for the first time, a video-sharing website broke into the top 50 most popular sites as ranked by comScore Networks’ Media Metrix. YouTube entered the monthly chart at position 40 with 16 million visitors, a 20 percent increase versus June, the research company said.

Grouper claimed 10 million unique visitors to its website in July.

The popularity of online video also helped push up traffic to the video sections of portal sites. MySpace Videos, which had 20 million visitors, saw traffic double in July, and top-ranked Yahoo Video recorded a 28 percent jump in visitors to 21.1 million, comScore Media Metrix said.

-Martyn Williams, IDG News Service (Tokyo Bureau)

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