August 23rd, 2006
What the Sony-Grouper deal means for YouTube
Since Sony made the announcement this morning that it is acquiring video-sharing site Grouper for $65 million, I have been re-evaluating my prospectus on which company just might buy YouTube.
I had Sony fourth most likely, but $65 million is a lighter bite than $1 billion, which is often thought to be the fetching price for YT.
Mike Arrington doesn’t think the comparison is all that applicable, though. His thesis: Sony is buying Grouper for the P2P, and while $65 million might be a trivial expense for Sony, why not use The Torrents if all you are mainly interested in is P2P distribution?
That’s a fair question, but with all due respect to this type of argument, I think that YouTube (which has about 30 times the traffic of Grouper) is not about distribution so much as it is an opportunity to monetize the content contributions and associated product and lifestyle marketing choices that tie in with audiences of millions who create their own digital content.
That’s why I think that the rationale for a YT deal would follow more of a Flickr or MySpace acquisition model.
I just went back over my article, and given the plausibility of co-opting existing distribution technologies to distribute digital content, that would minimize the case for NewsCorp. or Time Warner to buy YT.
I still think Yahoo! would be the best acquirer, if only for the opportunity to build on their Flickr base.
That’s not to say some other companies would do well to pursue content distribution deals with YouTube. What about, say, InterActive Corp. affiliating with, or buying a minority stake in YouTube and then offering self-made viseo distribution to all those Match.com members?
Russell Shaw is an enterprise computing journalist, analyst and author based in Portland, Oregon. See his full profile and disclosure of his industry affiliations.
