Web video-sharing and the movie industry
By Jon Fernquest[Introduction|Vocabulary|Article]
[Reading Questions|Answers]
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Sony Pictures, one of the largest producers in the movie industry, is buying a video-sharing site.
Video-sharing is a new grass roots movement.
Traditionally, a large movie company produces an expensive movie and then releases it to the public that might or might not like it, watch it, and generate profits for the company.
Nowadays, if you're a gifted filmmaker, one way to become famous is simply to share your films over the internet.
Let's say, an unknown person with almost no money at all, throws together a movie, and shares it on the site. Video fans vote on the new video. If they like it, the unknown movie producer becomes famous overnight. If not, then it's back to the drawing board to try out another movie idea to win the hearts of viewers on the video-sharing site.
In short, the entertainment industry is becoming more democratic. New technology makes production, distribution, and viewing, anywhere, by anyone, a lot easier.
Aspiring musicians have been using this strategy for a long time. MP3 music players have been around for years. Portable video players like the iPod are just starting to take off. They take up a lot more communnications bandwidth and computer disk space.
The way we watch movies may undergo some radical changes in the near future.
Reading Questions
Here are some questions to guide your reading (See answers at end):1. What kind of company did Sony buy?
2. Is the company that Sony bought the largest company in its industry?
3. Why did Sony buy the company?
4. Does Sony want to replace professionally produced media with user-generated content?
5. What kind of media are video-sharing sites similar to, according to the chairman of Sony Pictures?
6. What two kinds of commercial products can video-sharing web sites be used to distribute?
7. What new kinds of distribution do video-sharing sites use?
8. How is Sony unlike other large entertainment companies like Disney ABC, NBC, CBS, and Fox?
9. How might Sony make amateur videos shared at Grouper.com into commercial products?
Article
Sony Pictures snaps up video-sharing site
ERIC AUCHARD and YINKA ADEGOKESan Francisco/New York - Sony Corp's entertainment unit said it had agreed to pay $65 million to buy Web video-watching site Grouper.com, marking the growing embrace of the user-generated video craze by big media.
Sausalito, California-based Grouper is one of a number of Web start-ups operating in the shadow of YouTube.com - the most popular destination for user-generated videos, which plays host to an average 100 million video showings a day.
Grouper has attracted a following of millions of its own fans not just as passive viewers of Web-based videos but also as creators of their own videos, which can in turn be shared by users or downloaded to portable video-playing devices.
The acquisition by Sony Pictures Entertainment (SPE), the Hollywood movie and television production unit of Japan's Sony, aims to infuse the studios with new ideas and talent for movies, television shows and games, a top executive said.
Michael Lynton, Sony Pictures chairman and chief executive, said in an interview that user-generated content as a complement to professionally produced media has been a hot topic within Sony's different businesses for more than a year.
"I think user-generated content and the sites around (them) are businesses or platforms unto themselves in the same way that television networks (are),'' Lynton said. "There is a big piece of the entertainment/media business this touches,'' he added.
Sites such as Grouper give big media companies like Sony a ready-made network to deliver both Hollywood produced content and niche-market consumer-created videos using so-called "viral distribution'' where users share favourite items with friends.
Unlike Walt Disney Co with ABC, News Corp and Fox, General Electric Co's NBC Universal or CBS, Sony does not own a broadcast network. So it does not have a direct distribution outlet for movie and television.
Viacom Inc has MTV. Last year, MTV bought iFilm, another popular Web video destination. Also last year, News Corp bought MySpace and has its Fox TV and cable arms.
Grouper encourages viewers to browse through videos and post their favourite items to their profile pages on other popular websites, such as MySpace, Google Inc's Blogger and Friendster.com.
In effect, Grouper becomes an online talent audition for Sony. And while Sony might feature promotional movie trailers on Grouper, the site also gives the media conglomerate access to hundreds of thousands of consumer-generated clips, which can be mixed with copyrighted movies and TV that Sony produces.
"Just as News Corp buying MySpace gave social networking legitimacy,'' said Allen Weiner, an analyst with market research firm Gartner Inc. "This is a deal that adds huge legitimacy to the consumer generated media space.''
"It's easier for them to buy rather than to build at this point,'' Weiner said of media giant's moves to partner or acquire other Internet video start-ups, which beside YouTube and Grouper also include companies like Blinkx and Guba.com.
No immediate changes are planned for the Grouper.com site, Lynton said, although over time Sony may develop ad-supported and premium content businesses - Hollywood jargon for selling video episodes online.
While Grouper will retain its current management and work within Sony Pictures, the acquisition also fits with several other Sony business arms, including its consumer electronics and video gaming groups.
Grouper videos can be downloaded to connected devices like Apple Computer Inc's iPod music and video players and Sony's own popular PSP handheld gaming and Internet device.
Grouper's backers include T-Ventures, the investment arm of Germany's T- Online, and DAG Ventures, which recently led a $10 million financing round for Friendster.
In May, Grouper.com said it had surpassed eight million unique visitors to the site. REUTERS
Vocabulary
grass roots - interacting with actual people (for example in grass roots politics politicians mix with actual people to generate support and learn about their problems)
back to the drawing board - have to redesign an idea that failed
aspiring - want to become
take off - become a success (like an airplan taking off from the ground)
snaps up - buy something quickly (because it is cheap or just what you want)
the growing embrace of x - x is becoming more popular (and gaining power among consumers)
x is operating in the shadow of y - y is a large company that dominates the market, x is a smaller company in the same market
passive - don't take action, just let things happen to them
infuse - fill someone or something with a quality, for example the singer infused the girls with excitement
attracted a following - generated interest in his work, so now there is a group of people waiting to watch the next thing he produces
x as a complement to y - x and y go together well (for example wine is a nice complement to fish
viral distribution - (See Wikipedia on viral video and viral marketing)
audition - a short performance by an actor or musician to show an employer what they can do if they are hired
conglomerate - a large company that owns many unrelated businesses (See Wikipedia on Conglomerate)
legitimacy - people accept it (they see it as reasonable and justified)
premium content - "selling videos online"
jargon - special language used by a group of people (here the group of people are people in the movie industry)
Answer Key:
1. What kind of company did Sony buy?
Sony bought a video-sharing web site company.
2. Is the company that Sony bought the largest company in its industry?
No, YouTube.com is the largest video-sharing web site.
3. Why did Sony buy the company?
They want to get "new ideas and talent for movies, television shows and games."
4. Does Sony want to replace professionally produced media with user-generated content?
No, user-generated content will "complement" existing professionally produced media. This means it will be used together with and add value to traditional commercial productions.
5. What kind of media are video-sharing sites similar to, according to the chairman of Sony Pictures?
They are similar to television networks.
6. What two kinds of commercial products can video-sharing web sites be used to distribute?
They can be used to distribute traditional commercial movies and television ("Hollywood produced content") as well as new specialised content that hasn't been commercial up to this time ("niche-market consumer created videos").
7. What new kinds of distribution do video-sharing sites use?
They use viral distribution in which "users share favourite items with friends."
8. How is Sony unlike other large entertainment companies like Disney ABC, NBC, CBS, and Fox?
It does not own a broadcast network to distribute movies and television.
9. How might Sony make amateur videos shared at Grouper.com into commercial products?
Sony will use Grouper as an "online talent audition" and may mix "consumer-generated clips" (amateur) with commercial movies and television.
