Bolt Sells to GoFish to Pay Universal Music Settlement
Marshall Kirkpatrick
41 comments »
Video sharing site Bolt.com is being acquired by GoFish - a smaller but richer rival, in order to pay the settlement the company has agreed to with Universal Music Group for copyright infringement. The New York Times broke the story tonight. Bolt will go for an estimated $30 million in GoFish stock (update: forms filed Monday indicate that the acquisition was for about half this amount) ; the three year old GoFish was the first video sharing site to go public last October. Though it has just begun to bring in revenue from licensing deals, GoFish stock closed Friday just under $6 per share with a market value of $134 million.
The settlement was for “several millions of dollars” in cash, stock and advertising credits - presumably much less than the original demand from Universal of $150,000 per infraction.
The acquiring company GoFish, not to be confused with the wildly successful singles’ site PlentyofFish, has recently seen a huge spike in traffic. It was at 1.4 million monthly unique visitors as of December but reports more than 6 million uniques last month. Bolt sees more than 5 million unique visitors monthly (according to Comscore) and turned that traffic into $7 million in revenue last year. GoFish has reported no revenue but has deeper pockets. It was given birth to by Palo Alto investment firm Global Asset Capital.
Universal Music sued both Bolt and the already Sony acquired Grouper in October for hosting copyrighted music videos (our coverage). The next month, Universal sued MySpace, alleging that the practice of transcoding video uploaded by users represented participation in copyright violation. The Times reports tonight that no settlement talks are underway between Newscorp or Sony. Some people believe these cases will test the Safe Harbor provision of the DMCA, which is believed to shield websites from liability as long as they remove copyrighted content on request. That’s been the standard defense among media hosting companies for the past year, but it’s faced little scrutiny in courts.
Bolt’s CEO said tonight that the acquisition is “economically painful to Bolt shareholders,” but that the legal situation demanded it. It would be great if Sony and Newscorp could come to an amiable resolution with Universal that was good for all parties, video consumers included. Universal signed a deal with YouTube, just prior to the Google acquisition, but that deal may rest in part on the unfulfilled promised of automatic copyright detection technology at YouTube.
Bolt and GoFish both say now that they plan on using technology to detect copyrighted music as well. Presuming those promises mean anything, you have to wonder how much money, time and creativity will go to waste trying to develop that elusive means of content control. The story of Bolt’s acquisition may well be a story of an entrepreneur’s dream strangled while DRM takes its own last breaths. (Note: MySpace rolled out today what it says is effective filtering for copyrighted video.)
Liz Gannes at NewTeeVee reports that the Bolt CEO now plans on moving into the content creation business, as video sharing technology is no longer an interesting business. While you can understand why he’d say that, this seems to me like a sad end to the story. If it’s a part of market maturation, though, things could certainly be worse. I wouldn’t be surprised to see some interesting things come out of GoFish and Bolt in the future.
Marshall Kirkpatrick is the Director of Content at SplashCast and will be assisting with TechCrunch while Michael Arrington travels.
Kind of cool that there are other viable video sharing sites out there. Good luck.
sorry to see Bolt get unbolted - succombing to a smaller fish, forced at that
inevitably somebody had to be first in universal’s lawsuit pecking order
Legal tussles are getting too common now days with people even getting into them knowingly to gain publicity and stay in news.
http://www.tekno-world.blogspot.com
It’s too bad that because of lawsuits “video sharing technology is no longer an interesting business”
they are both deadpool bait. blowfish.
This is a very positive development for us at veetube.com as we look forward a pay day.
…no one even noticed who wrote this post?
First thing I noticed when I just checked my feed reader.
Marshall’s back! Maybe, sorta, kinda. Even temporarily, I’ll take it!
Sweet, Marshall is making a few cameos! This acquistion or how I’d like to characterize it, “CRACKquisition” is very fishy (no pun intended). On the other hand, it is a shame that the legal powers that be are forcing this to happen, while YouTube is generally going home free in a lot of ways. I’ll be watching this company and what goes on pretty closely.
-JLB
I did. BTW, stop commenting, you’re suppose to be on travel. Welcome back Marshall.
I still think, companies are suing from the ground up. They start with the small fish to build precedence in the courts.
- Then once only youtube and a few others are left, they hit em’ up big.
- YouTube (google) will have to ither cave or enable those filters. But they won’t be able to defend themselves, becuase all the other lost cases.
- Google better settle soon! with all the majors in a 10+ yr contract.
- Also its only natural that the smaller video sites merge for protection and also to compete with the bigger dog on the yard.
-Rb
I’m not sure why everyone thought that these types of services actually had DCMA protection anyhow. The law is very clear that a service has no protection if it’s generating money on copyrighted content. It’s never been challanged in court, so these companies were just stalling for time hoping for a big acquisition, like YouTube.
I think ‘07 will be the year that content owners start asserting themselves.
It’s worth noting that Gofish signed an agreement with Universal Music Group quite a while ago to license their music videos. This looks like a smart move now, as it presumably has helped them avoid a lawsuit.
Read about the agreement here:
http://www.universalmusic.com/News.aspx?NewsId=360
Am I mistaken, or is this deal actually for $18 million, $5 million of which only kicks in if certain aggressive 2008 revenue targets are met?
http://biz.yahoo.com/e/070212/gofh.ob8-k.html
$500k in stock up front
$12.5 million in stock to be paid over a 3-year period
$5 million in incentives based on 2008 revenue
What am I missing?
Orton, you’re right - the first night’s coverage didn’t have those details but I’ll update the post with a link. Thanks!
Guys:
I think the key for Bolt and Gofish is combining to do something very different from YouTube. The clone business is dead. We’re going to emphasize more made-for-internet programming and try to get away from the low-cpm social media model. Obviously, we will have more to say about this in the coming month
Having been through the litigation process I do believe it will continue to be an issue and I believe that video sites would survive by aggressively removing copyrighted content, though many lawyers would say that you lose the safe harbor of the DMCA by removing most but not all copyrighted content.
Ultimately, I think the music and the television industry will go after an increasingly large number of individual targets. I think our industry needs to figure out how to work constructively with the copyright owners because litigation is a very time and money consuming process for small companies. Bolt, btw, has 25 people.
I like what Gofish is doing.
POST-1…Birth of a New Internet Bull Market
First and foremost, GoFish is the only pure publicly traded online video company in the entire market. As word gets out about the company and its stock, there’s going to be a ton of investment dollars-both institutional and retail-buying this stock.
Why?
Because Wall Street desperately wants a piece of the online video market. They got shut out of the room in the YouTube deal. I mean, YouTube was a private company. There was no way for Wall Street or individual investors to buy stock in it.
But with GoFish, you can.
The word on the Street is that GoFish will hit $10 to $15 a share in the near term . . . and possibly $20 a share in 12 months’ time.
This assumes, of course, that GoFish isn’t acquired first by some big media company.
We’ve already seen this with YouTube, which you know was acquired by Google for $1.65 billion.
But did you know that other online video and “social networking” sites are being snapped up at huge premiums?
These sites are hotter than Super Bowl tickets. Take a look:
• News Corp. buys MySpace for $580 million in 2005
• AtomFilms acquired for $200 million by MTV/Viacom on August 10, 2006
• Grouper.com bought out by Sony Pictures for $65 million on August 22, 2006
• YouTube acquired by Google for $1.65 billion
POST-2…Before I go any further, I’d like to talk about the YouTube acquisition, because financially, it’s not much different from GoFish.
You see, YouTube was financed mainly by a venture capital firm called Sequoia Capital. They invested roughly $11.5 million in the company in the past twelve months.
It turned out to be the investment of a lifetime.
That $11.5 million grew YouTube into a $1.65 billion buyout. We’re talking about a gain of over 14,000%!
GoFish is pretty much in the same situation. They’ve raised $12 million in financing . . . yet investment bankers were ready to investment 16 times more.
And it’s easy to see why Wall Street is salivating to get a piece of the action. With traffic to these websites growing every week, advertisement dollars going into online video are expected to grow dramatically.
ut one of the reasons I really like GoFish is that, in addition to allowing user-generated video (which is the business model of YouTube), GoFish is making itself unique by merging traditional media with cutting-edge Internet broadcasting.
You see, over the summer GoFish launched an Internet reality show called America’s Dream Date, a Web series that relies heavily on user-submitted video clips.
The launch was a stunning success, pushing GoFish into the number-four spot for user generated video on the Internet. As a result, GoFish caught the attention of major media.
On August 3, PC Magazine wrote “. . . some newer forms of networks, such as GoFish, create content to be broadcast exclusively online. Traditional networks like Food Network can run spots on television and on their Web sites to promote online programming, while newer online networks such as GoFish rely on the Web 2.0 culture of share and share alike to promote the show America’s Dream Date, which is a hybrid of The Dating Game and American Idol for the Web.”
GoFish plans to take the capital raised in financing to develop more proprietary Internet shows like America’s Dream Date.
This is going to be huge. And I think it spells the beginning of a new bull market in technology.
http://finance.id3mag.com/id3?.....ediaViewer
The conference will start @ 8:30 am Tuesday 2/13/07 Pacific time! http://www.wsw.com/webcast/mcm5/gofh.ob/
February 09, 2007
Publicly Traded GoFish.com: The Next YouTube
Could it be possible to use Alexa traffic data as a future indicator of the direction of a company’s stock price? We think so, as long as the company’s success is derived from the amount of traffic it receives on its site. Take GoFish Corp. (OTC: GOFH) as an example, a publicly-traded online video company that is ranked in the top ten of all online video sites. GoFish’s Alexa data for the site’s reach rose from 780.5 to 1,845 users per million in just little over a month. How can we confirm that the traffic at GoFish has increased to justify the Alexa ranking? Take the company’s word for it. In a recent press release, the company subtly mentioned that it has now built a community of nearly 6 million monthly unique visitors. In December when we last reported on the stock, GoFish had nearly 2.5 million visitors a month.
Recently, the company has signed numerous content license agreements, not solely relying on user generated content, to build its online video collection. GoFish has also signed an alliance with Kaleidoscope Sports and Entertainment LLC, to build exposure of the brand and increase advertiser awareness. The company hopes to take advantage of the industry norm of charging a rate of $25 per thousand impressions for ads shown before the playing of its videos.
The stock has risen from $4.37 in early December to yesterday’s close of $5.63, a nice 22% rise, but hardly reflective of the tremendous traffic growth and potential for that traffic to be monetized. GoFish has a market cap of just around $130 million. More should be known about the company’s results and further growth potential when it gives a presentation at Merriman Curhan Ford & Co.’s IP Video Conference on Tuesday and when it reports quarterly results.
JJ, that is fascinating! How can I get a piece of this HOT, up-and-coming company??
listened to conference. a key point i noted.. with bolt they are 20-25 percent of reported comscore domestic size of youtube…. whatever that means?? youtube got bought out for 1.6 billion we are trading around a 125 million market cap. im telling you this can go up 4 times these price levels this year…http://finance.yahoo.com/q?s=GOFH.OB
Up 4 times this year??? That would mean I’d make 4 times my money in a year if only I invest now!! OMG OMG OMG
Where do I send the check???? BTW what does .OB mean?
very useful stuff over here. thanx. http://order-xanax.da.cx
Bolt Settles Universal Copyright Suit
By JONATHAN VUOCOLO
The Wall Street Journal Online
March 9, 2007 11:43 a.m.
Vivendi SA’s Universal Music Group and Bolt Inc. said they reached an out-of-court, multimillion dollar settlement resolving the lawsuit brought by UMG against Bolt last year.
Bolt, which owns the Bolt.com online video site, will pay UMG for damages for past infringement, against a percentage of the value of the company. The exact amount wasn’t disclosed.
Bolt also agreed to introduce filtering technologies within the next 60 days to prevent its users from posting UMG artists’ music and videos on Bolt.com without payment and consent.
Bolt, New York, will be acquired by GoFish Corp., which has been a licensed partner or UMG for the last two years.
In October, Universal sued Bolt and Grouper.com, which was acquired by Sony Corp. for $65 million in August, claiming they illegally let users share music videos and other copyrighted material without permission. Bolt said at the time that it had always complied with music companies’ requests to remove copyrighted video after the fact.
So-called user-generated content sites have been an increasingly hot issue for music companies and other copyright holders. Universal and two other big music companies reached blanket licensing deals with YouTube Inc., shortly before it was acquired by Google Inc.