Grouper, Sony, and the Copyright Card

Posted by: Heather Green on August 23, 2006

It makes absolute sense that Grouper, one of the many startup video sharing sites, got bought up by a Hollywood player. Sony paid $65 million for them. Grouper has good technology, a proven team on innovators (the pair behind pioneering online radio service Spinner)—and has been loud and clear in stating that it works to protect copyrighted works.

That’s a siren call to any Hollwood player’s ears. And it’s what trying to figure out who would buy YouTube or how much they would pay is a tricky bit of speculation. TechCrunch speculates that, based on Grouper’s valuation, YouTube must be worth $2 billion. Yet, any kind of straight correlation has to take into account some kind of discount because if they get bought by a studio, the studio is going to have to move quickly to pull copyrighted works. Doing this without losing the momentum of the growing audience would be a work of art.

It’s an interesting evolution for Grouper too. The company first debuted as a site for sharing music, videos, and photos among private, closed groups of people—30 or so. Through limiting this sharing to a group and only allowing folks to stream these works, Grouper was trying to carefully walk the copyright line. But it was a very undefined line, and Grouper certainly drew the attention of the music and radio industry.

When Grouper relaunched last year as a more straightforward, open video sharing service a la YouTube, its execs were forceful in their statements, saying they were proactively blocking sharing of copyrighted and pornographic videos.

TrackBack URL for this entry: http://blogs.businessweek.com/mt/mt-tb.cgi/