Grouper Targets the Corner Store: Remember That $65m Video Acquisition?

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Grouper, the video sharing site Sony bought in August for $65 million, is announcing a partnership this morning with mass market video camera company Pure Digital. Starting in November, Pure Digital camcorders will ship with software to enable automatic video upload to Grouper or two-step upload to Google Video.

This is one of a number of new distribution partnerships that constitute an important part of Grouper’s value, along with the company’s P2P distribution system and video editing software.

Pure Digital sells cameras for under $200 at pharmacies and big box retailers; users can take their cameras back to the stores to get video or photographs transferred to DVDs. The Grouper distribution deal has been in the works since before the Sony acquisition and is similar to one Grouper has had for some time with webcam makers Logitech. A week after the Sony acquisition, Grouper also announced a partnership with Buy.com to power user generated product reviews on the shopping site.

In a crowded sector like online video, having good technology isn’t enough – you need clear ways to get your services in front of large numbers of users. If YouTube leveraged copyrighted video for early audience building and video capturing plug-in VideoEgg is aimed to offer ads on its now substantial network of social network partners – in these kinds of partnerships Grouper clearly has a powerful distribution channel of its own.

When Sony bought Grouper in August we compared the site’s traffic numbers with its acquisition price and then with numbers for YouTube. While acknowledging that Grouper was bought more for its P2P and video editing technology than its user numbers – the dollars per user worked out to suggest a YouTube valuation of around $2 billion. At the time, some people were very resistant to that idea. In the end, Google paid in total 25 times as much for YouTube as Sony paid for Grouper.

Grouper today looks like a property that can not only support P2P distribution of Sony video to desktops and PSP devices, it can also partner with companies like Logitech, Buy.com and now Pure Digital to drive mass market video publishers to the Sony/Grouper channel. That’s a relatively new phrase – mass market video publishers. Grouper itself says it only has 10,000 webcam-recorded videos uploaded on its site so far. While YouTube has clearly built a much larger user number than anyone else, Grouper’s deals to create direct links between themselves and the hardware market are smart.

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