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Sony Buys Video Sharing Site Grouper.com

23 Aug, 2006 By: Erik Gruenwedel

Sony Pictures Entertainment has acquired user-generated video sharing site Grouper.com for $65 million.

Under the terms of the deal, Sausalito-based Grouper will continue as a stand-alone property retaining its current management, including co-founders David Samuel and Josh Felser, who previously started Spinner.com, an Internet-based music destination they sold to AOL in 1999 for $320 million.

Sony's acquisition of Grouper mirrors increased efforts by movie studios to harness the popularity of teen network Web sites such as MySpace and YouTube as conduits for marketing and selling movies, DVDs and ad-supported TV programming.

Video helped spike by more than 20% July traffic to MySpace and YouTube, according to data released by media tracking service comScore Media Metrix. 20th Century Fox announced it would soon begin selling downloads of movies and episodic television on MySpace, which is owned by parent News Corp.

Grouper, which had 8 million unique visitors in July, allows members to browse videos and post them directly to personal pages on third-party sites (including MySpace, Blogger, Friendster and Wordpress) or download to their desktops, iPod and Sony PSP. The site also provides video editing tools enabling content to be uploaded from cameras, camcorders and webcams.

“We see a lot of potential opportunities,” said Sean Carey, EVP of digital distribution and acquisitions for Sony Pictures Home Entertainment. “We see Grouper as a stand-alone business that [Sony] as an entertainment company should be involved with. A large segment of the [movie] audience is spending more and more of its time on user-generated content sites. And as a content provider we want to be where the audience is.”

Carey said that from a studio perspective, reaching the A-segment (18-34) of the audience requires having a big online component. He said opportunities with Grouper range from providing promotional materials to allowing users to interact with Sony's upcoming movies, DVDs and TV releases to perhaps ultimately buy (download) or view content.

“Will find fun and creative ways to share [Sony] content with the Grouper audience,” said Carey. “We think it fits very nicely in [Sony's] bouquet of [entertainment] businesses.”

To date, Sony has not put content on Grouper in any formal way with the exception of occasional trailers.

“There is a segment of the audience that is spending more time on community and end-user generated video sites and that is a primary driver why we think owning Grouper will be a nice business unto itself,” Carey said.

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