After we thought the bizarre story of Stage6 was over, Brad Greenspan’s LiveUniverse has gotten involved, and the plot gets even thicker.
According to a release from LiveUniverse, the company offered to acquire Stage6 prior to the site being shut by DivX 25 February. The offer was $11 million in cash & carriage plus an equity Stake in Stage6 and Promotion of DivX Software. LiveUniverse then claims that the DivX Board “refused to engage in any direct dialogue with LiveUniverse for over 5 days, and during this time, DivX shuts down Stage6.”
Despite the site being shut for nearly 2 weeks, LiveUniverse still wants to buy it and is appealing to DivX shareholders to pressure the company into selling. DivX shareholders can visit www.livevideo.com/SaveStage6” to take initiative and proactively push the Board to do the right thing for shareholders.”
LiveUniverse is claiming that “despite daily outbound calls and emails, LiveUniverse was and is unable to reach any of the DivX executives including General Counsel David Richter who LiveUniverse was originally referred to for the purposes of buying Stage6.” The go on to say that “Directors of public companies have a fiduciary duty to shareholders to try to get the best deal and represent their interests, first and foremost” and “DivX Board’s decision to destroy website and its community when there was and is a firm superior offer on table from LiveUniverse raises questions of whether proper sales process was followed.”
The one part missing from LiveUniverse’s statement is why? why do they want to buy Stage6? Sure, it was a great site with a ton of traffic, but it was only great because it offered a BitTorrent style smorgasbord of pirated content without the need to download it. Without the pirated movies, the traffic on Stage6 means nothing. Either LiveUniverse knows something we don’t about the site, or they’re taking a big risk.
Please let this be true, Stage6 was one the best video sites around.
Jason
it is true, but I’m not sure it will happen.
They know something you don’t.
despite daily outbound calls and emails, LiveUniverse was and is unable to reach any…
This seems very similar to try and arrange a deal with LiveUniverse.
Otherwise… combine the Revver and DivX platform and extend all that technology to livevideo… awesome platform! Those guys actually can code. If only their corporate level wasn’t the biggest nuisance.
I also inquired about purchasing Stage6 the day it announced shutting down. A person by the name of David Richter at Divx responded saying:
Jay, No plans to sell the domain name at this time, but am of course always open to offers. Best regards, David
So let it die off instead of take $11m.
Again, I say: Idiots. All of them.
While you do not see much value in Stage6, I think that there are tremendous value in the brand itself. Brand recognition is an asset that cannot easily be bought except with million dollars worth of advertising, which can easily be over $11 million.
Up until your article is published, I don’t know anything about LiveUniverse. Now, because of its involvement of this deal, and thanks to your report, I know about them.
Now, if LiveUniverse is interested in launching a video community site, it would be far easier to revamp an already recognized name, instead of creating a new buzz on its own. When you think of Stage6, you think video. When you think of Flickr, you think of photograph. Those are huge assets, and should not be underestimated.
Cheers,
SML
Ah, as the DivX turns.
11 million seems cheap for stage6. Not a high risk because the valuation is so low, IMO. Lots of theories are bouncing around message boards about why DivX is not spinning off stage6 and this confirms that they at least had offers. I personally think it has something to do with Daddy, I mean Sony, who could threaten to pull their distribution deal with DivX if it turns out they still “cater” to pirates. Also, DivX management may want to get new potentially lucrative distribution deals with other studios. I think their new CEO is trying to give DivX a squeakier clean image than their old one, Jordan Greenhall did, and that is the cause of this drama.
The other possibility is that they have a buyer, but they dont want to pay for bandwidth anymore and they cant disclose anything for some legal reason. This is pretty unlikely.
Or they really want to wait it out until they get the best possible offer and they think shutting it down will help. This is probably what a lot of fans are hoping, but is pretty dangerous from their perspective, due to all the damage control they now have to do.
Then there is the unknown possibility, the one we haven’t thought of yet, or mere incompetence from an inexperienced management and/or board. This is the theory that Arrington seemed to allude to in an earlier article with “leaked” information. Although those juicy bits probably came form the Greenhall camp, who probably is not happy about the whole thing, since their bid did not go through.
I really hope this happens, stage6 was so good. Its one of the few websites I missed after it went down
I disagree with the it’s only good for the pirated content assertion. For example, when everyone was watching Paul Potts on YouTube, Stage6 had this nice high quality version with much better audio that I could demo much more nicely on TV. Music video’s and the like just seemed to play much better through the web divx player.
A high-quality streaming video with true HD resolutions site such as Stage6 has tremendous value aside from only hosting pirated content. Indie films, video podcasts, lectures, speeches, do-it-yourself and eventually personal videos (As HD videos slowly become the norm) that are 5 minutes plus are tremendously more valuable in HD as users are more likely to sit at their computer and watch them.
While 11 million isn’t an insane price for Stage6, especially if they can get some sort of working revenue model, but the rumored million plus burn rate is incredibly high for a site that has the possibility of attracting numerous lawsuits. I think getting the burn rate down would be essential whether that is by using a cheaper CDN that is a bit slower or just getting the company itself scaled back the 1M+ is going to scare away plenty of buyers. Does anyone know if that burn rate has been confirmed?
the shutdown of Stage6 is a condition of a deal DivX is in the process of executing.
oh man pleeeeeeeeeeeeeeeeeez let this be true.
someone has to be the savior for stage6
we need that beautiful divx and that nice clean web interface to return
great usage of the ‘tag’ being watched and all those nice ajax features
please
bring it back!
Stafe6 is the best platform, it has led by example, It has delivered on demand TV quality streaming over the net. It will never get any better than that!
Obviously the single most important factor is the legal cases being brought by the majors. Ask any CEO what it’s like to live with court cases that threaten to bury your baby 1 billion underground.
However, the big losers are the majors, Stage6 is worth billions to them. If they could monetize it with legal content it’s game set and match for a new world order.
Highly interesting news! The assets of Stage6 have to go somewhere. One question is remaining, what DivX is going to do with all the Stage6 videos? A website relating to Stage6 is http://www.stage6community.com which is worth of visiting
I have reliable information that DIVX is in the process of signing major multi million dollar deals with major corporations in the film industry with the precondition that Stage 6 be shut down to prevent its use a vehicle for piracy. DIVX is on its way to becoming HUGE, VERY HUGE!
http://www.livevideo.com/SaveStage6
What is up with that URL and channel? Provides absolutely no information on what is even going on, how could this news be taken seriously?
Is TechCrunch getting duped into marketing LiveVideo for Brad? Or was this paid for??
I discovered stage6 2 days after it was discontinued, I found it at a portal site in the video section when I typed in a celebrity name they took me to stage6.I saw the message the maker made and no media. This public appearance of this celebrity cannot even be found at youtube. They should at least the video be transferred to other sites but. Another good media site that was discontinued was grouper.com, no fair man.
I don’t see why they’d want to acquire it, but I’m sure they have some very interesting monetization ideas, I wouldn’t mind them bringing it back though because all those pirated videos were great.
Yep, what Jason said Stage6 kicked ass and it was gutted when I heard about it closing down.
Here is a copy and paste comment I have left in the Finance Talks section of the NASDAQ:DIVX
——————————
DivX made a poor decision in closing off its talks and negotiations
with LU regarding the purchase of Stage6. DivX, Inc. specifically
stated that the shut-down of Stage6 was in the best interest of both
DivX AND its investers/share-holders. During this time, (Today and the
announcement of Stage6 shut-down) DivX market price or its
monetization fell severely. Many lost much money at the very
announcement and panic of Stage6’s closure. It did recover quite
quickly, but still not to what DivX, Inc. had projected their
revenues. With this public announcement by LiveUniverse, we see that
lack of full disclosure to its share-holders regarding Stage6 and
possible acquisition or merger with a 3rd party willing to purchase an
asset that DivX had deemed a poor investment and that shutting down
was its best interest, was actually NOT in its best interest nor that
of Stock holders.
Not at all. DivX, Inc. SHOULD have both announced their decision NOT
to allow the purchase of or merger of Stage6 with LU, and explained to
its Investors/Stock-holders the discrepancies in the market value of
DivX, Inc. in comparison to what would have been the actual monetized
value should it have proceeded with LU’s offer.
Come Monday (March 10), many investers will want answers to these
questions. This also has been timed perfectly, and with good reason.
DivX Quarterly revenue report followed by conference call, is
scheduled for next week, Tuesday March 11; The day after that DivX
Inc. will be confronted with the Press release by LiveUniverse.
That’s my thought. As well as my concern of vested interest
If DIVX stated that the shut-down of Stage6 was in the best interest of both DIVX and its investors/share-holders, I am sure that they will be able to back it up at their conference call after they disclose their financial results. Why would they announce a Stock Repurchase Program just before they state their financial results and hold their conferences call if their shares were not undervalued? No sensible corporation closes a segment of its business when they can sell it at a premium unless there is a lucrative benefit accruing to the company and shareholders behind all this exceeding Live Universe’s. This one is a NO-BRAINER.
Live universe may publish there classic movies for free and new movies with monthly subscription. instead of renting DVD’s using divx is more cost efficient and for its quality. For example for a fiver a month you can get millions of subscribers if not billions.
stage6 is pretty neat but so far, it’s not as user friendly as youtube in terms of video uploading. and also i’m not sure though, some of the paths are not easily accessible.
Stage6 wasn’t just great because of pirated content. I was on the site since Day One till Day of Death and could never figure out what drew the people in. For the first year, it certainly wasn’t the “pirated” content.
What stage6 had, and what every other video site out there is lacking, was a community. The people who used that site insanely got addicted to the community AND the content. And, it was nice to watch things like Pure Pwnage and 10 MPH and the Ghostbusters fan movie, as well as every movie preview ever made all in one location and all looking FANTASTIC.
Since stage6 I’ve tried to find a place that I can enjoy and I’ve found all of them to suck.
Blip.TV - at least I can watch the movies as they were originally uploaded using the divx player. But, I can’t make comments because no matter how many times I put in the captcha it doesn’t work. I also can’t write a blog or figure out how to make friends.
Veoh - hate the quality and again don’t like the community features. At least they email you when you get a comment or a message though.
Hulu - decent quality, stuff I want to watch and it’s legal. But I can’t share on that site nor can I easily join a community to make friends and even talk about what I’m watching and like.
OK, let’s face it. I’m spoiled with DivX and I mostly hate flash so I’ll probably never like any sites out there.
Well, there’s a plenty of pirated films on other sites as well. Veoh being the best example and that doesn’t stop them from living. Eithics by side, piracy is a major issue for the producing industries, but the sharing sites are barely affected by it (even though they get quite a few lawsuits). Look at Rapidshare! It’s been alive for years and keeps making big bucks out of illegally distributed games, films and so forth.
PS: And then Stage6 had a plenty of great fair-used licenced documentaries.
OH MAAAAAAAAAAAAAAAAAAAAAAAAAAAN LAT TEEEZ BE TRUE MAAAAAAAAAAAAAAN STAGESI6 PLEEASE COME BAAAAAK SAVE US STAGESI6 PLEASE IM DIENG SAVE ME STAGESI6 IT IS LIKE WATER TO US VIDEOS