Sony Pictures Entertainment is the latest traditional media company to make the crossover to new media. And it's about time. The production studio just completed a $65 million takeover of Grouper, a Web startup that specializes in user-generated video. Grouper has about 8 million users, up from 1 million in March. Its video-sharing technology allows users to post Grouper-created videos on social networking sites, like MySpace or Friendster. Sony Pictures execs say the video-sharing technology will help the studio distribute and promote its films and TV programs over the Web. But Grouper is no YouTube. It has only a fraction of the video-sharing king's usage. One wonders how successfully Sony Pictures will be in promoting its films across a network whose worldwide user base is just 8 million. There are still way too many pretenders to the video-sharing throne--and only one superpower. It's a strange acquisition for a movie studio; video file-sharing is a grassroots phenomenon that involves sharing short-form videos that are often copyrighted. Moviemaking is as mass media as mass media gets. And while promoting one's films on a file-sharing site is an interesting idea, it would seem that buying a channel from YouTube would be cheaper and reach a greater audience than acquiring a fringe player. However, Sony could use the acquisition as an on-ramp for budding filmmakers, its most obvious usage. Sony execs say they still haven't figured out how it will collaborate with the file-sharing site.
Read the whole story at Financial Times »