Sony Pictures is buying Grouper for $65 million in cash. This should open the floodgates for online video sharing startup acquisitions, following similar patterns in social networking and Web-based office productivity tools.
Google and Yahoo! will be acquirers in this area, but as the Grouper deal shows, so will traditional media companies. For example, I’d expect Fox, which is actively building a digital media empire, to do a video distribution acquisitions before long.
One interesting question this sets up is the competition between centralized services like YouTube and distributed P2P approaches. Given skyrocketing valuations, the window may be closing for YouTube to be acquired pre-IPO, although I wouldn’t be shocked to see Yahoo! or AOL make a multi-billion dollar offer. (At some point, though, it’s going to be part of a larger portal.)
Either way, the bandwidth demands of centralized video hosting are going to be astronomical. Google, with its dark fiber and distributed computing capabilities, could probably handle it, as could Microsoft,but over the long run, I think everyone else will have to go do a P2P approach. It’s just fundamentally more efficient. How that affects the shape of the market, now that big media companies are finally willing to work with P2P platforms (and vice versa) is a really interesting question, which I don’t think anyone has fully thought through.