Sony Pictures Entertainment Acquires Grouper Networks

Sony Pictures Entertainment has acquired Grouper Networks, a Sausalito, Calif.-based company that operates the user-generated video/video-sharing site, Grouper.com, for $65 million. It says that the company, which in its two-year history had raised a little over $5 million in venture capital, will retain its current management, but will work closely with a team at Sony Pictures. "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," Sony Pictures Entertainment chairman and CEO, Michael Lynton, said in a prepared statement. "This acquisition demonstrates the breadth of involvement of Sony Corporation in the field of digital online entertainment. Many people in the Grouper community use Sony cameras to create videos and Sony VAIO computers and mobile devices to store and view them. It makes sense to complete the circle by having Grouper be a part of Sony Pictures Entertainment, which itself creates so much content for people around the world." Added Grouper co-founder and CEO, Josh Felser: "When you pair Grouper's innovative video-sharing platform on the Web and the desktop with Sony's connected devices and copyrighted media you create a dynamic and exciting environment for consumers. We have an opportunity, as part of the Sony family, to bring together user-generated and copyrighted content across platforms and devices for the first time."

Grouper positions itself in the increasingly crowded video-sharing/user-gen space as providing end-users with the "flexibility to take their videos with them across site and platform." It allows end-users to post videos to a range of third-party sites, including MySpace, Blogger and Friendster, and also to download videos to mobile devices such as the Sony PSP and the Apple iPod. Its service is powered by peer-to-peer technology, which it says is designed to enable fast downloads of high-quality video. It also provides end-users with video-editing tools. Sony describes the Grouper acquisition as "a strategic initiative in the field of digital entertainment and consistent with Sony Pictures' vision of making entertainment accessible to consumers whenever, wherever and however they want." It says it has no plans to make "immediate changes" to the site; however, it does say that the site has "potential for development of ad-supported and premium content businesses," and that it may even use the site as a talent farm for its professional productions: "There is value in connecting an enormous amount of imaginative content with a studio that is always interested in finding new ideas and talent for the movies, television shows and games it creates for audiences around the world," Lynton was quoted as saying in Sony's press release announcing the acquisition.

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