DivX Shuts Down Popular Piracy Site Stage6

We covered Stage6, a DivX-owned site, in October 2006 as part of a roundup of up and coming video sites. The site, which allowed users to upload video in the high quality Divx format, streams video that makes YouTube look shabby in comparison.

The site won’t be around long, though, Uploads have already been shut down, and the site itself will go offline on February 28. The official reason: “So why are we shutting the service down? Well, the short answer is that the continued operation of Stage6 is a very expensive enterprise that requires an enormous amount of attention and resources that we are not in a position to continue to provide.”

Translated, that may be that the pirates took over the site. New movies and tv shows were constantly being uploaded and then taken down by the site staff. Sites like Joox.net took all that pirated content and repackaged it on their own site. The combined costs of hosting, plus all the monitoring for infringement, may have been more than Divx was willing to deal with.

Update: Ok, we’ve been shaking the trees on this story a little. According to one source, the planned spinoff of Stage6 from DivX apparently had $24 million or so in committed venture capital but negotiations with the DivX board broke down over ownership percentages. We’re still digging.

Update2: Comscore says Stage6 has 17.4 million monthly unique visitors and 360 million page views. We also hear that their monthly CDN bill from LimeLight is $1 million, about 11% of their revenues. That’s going to hurt them.