Grouper’s completely scrapping their old site and being reborn as Crackle. The new site aims to discover the top online video talent for their parent company, Sony, by offering producers the chance at fame and fortune. All the old Grouper accounts will be transferred to Crackle.

The new property will be a destination video site, consisting of 12 branded channels for different show concepts such as comedy, music news, and animation. The site consists of a channel guide and high quality 16 x 9 embeddable video player. Advertisers will be able to place 5 to 15 second ads between the videos and banner units on the site.

Crackle’s Branded Channels

Crackle will seed the channels 1000 of their own professionally produced videos. They will add the top user generated content following the channel’s show concept (comedy, music, etc.) as selected by the community and their team of editors.

In return, Crackle will reward the producers in varying degrees, ranging from revenue shares to mid seven figure production deals. All winners will recieve distribution across Sony’s network of hardware and film properties. Sony’s distribution network and 60 person advertising team really pushes this open studio model beyond anything other video startups can currently offer.

The site is launching with 4 of the 12 user supported channels. Judgment Day is a channel where the hosts will “judge” other people in the public and then find out if their judgments are right. Scrambler is a video music magazine for indie rock. High Wire is a virtual stage for stand up comedy. Wet Paint is an animation channel. They also have a channel devoted to America’s Firehouses, whose content will be paired with Sony’s “Rescue Me” series. Finally, Moving Targets is a sketch variety channel coming soon.

Rewarding Producers

Crackle will allow users to climb the “fame pyramid” as pictured on the right. Anyone will be able to submit a video to the channels, which will be put into a general video library. Viewers will vote for the best videos and during contest periods for special deals, the two top user selected videos will join the editors picks to be chosen for production deals.

The possible rewards for producers will vary based on the channel. All the chosen content will be distributed across their network of embedded video players, along with Sony PSP, Bravia, and Sony Vaio. Crackle claims an audience of 25 million unique visitors per month.

Quarterly winners of their Shorts and Moving Targets channels will get a pitch meeting with Columbia Pictures about deals produce more videos. Winners on the comedy channels will get the chance to perform on stage at the IMPROV comedy clubs in LA, NY, or Chicago and pitch their shorts to IMPROV Comedy Lab. Animation winners will get a cash prize, the chance to pitch the studio on a theatrical release of their short, and tickets to Siggraph 2008.

Their first example is Mr. Deity, a comedy show produced by Brian Dalton, which Grouper lured from YouTube with the promise of greater distribution. Since March, the show’s 10 episodes have received over 5.7 million views. Sony has picked up the show for an additional 10 episodes to premiere on their Moving Targets channel.

How Does it Stack Up

Crackle is a big shift from the plans originally announced after Grouper turned down a $10 million second round and sold to Sony last August. We reported Sony would use Grouper’s technology to share lower quality Sony videos online, distribute DVD quality video by P2P and allow users to create mashups of select Sony media properties. Both of these ideas were very similar to what Veoh and Eyespot are already doing.

YouTube can still drive more traffic to your videos (this one did over 1 million in a day) and make you famous. However, Crackle has what no other video network has, Sony, which means they can offers top producers access to fatter budgets along with Hollywood style fame.

It is a model that can be reproduced with some effort by other sites. iFilm, with it’s parent Viacom, could similarly strike deals with top producers and distribute across their properties. Other social video sites like Veoh, with their P2P player, Joost and Babelgum, while lacking Sony’s clout, could also step into the ring. Increased competition for top content from all of these sites spells good news for the burgeoning internet video industry and may mean bad news for existing video content networks that can’t match what Sony has to offer.

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This morning Grouper sent social search engine Searchles a C&D letter and, of course, it was published to the web. Here’s Searchles’ response. Grouper doesn’t like Grouper videos being streamed on the site’s new Searchles TV product. Grouper’s main complaint deals with the re-skinning of the the videos in the Searchles player, which removes their branding and feedback features.

If complaints like this have any teeth, it bodes badly for media remixers such as the video multimedia player Splashcast and Cuts‘ video editor. This would be particularly bad for AdBrite’s video player, which doesn’t host it’s own content and posts its own ads to boot.

The C&D letter is posted below:

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Grouper, which won the acquisition lottery last year and is now part of Sony, is beginning to take down user videos with copyrighted content.

The Grouper blog post discussing the policy says music from Universal is being taken down starting immediately (see our coverage of the Universal lawsuit against Grouper). Grouper is using Audible Magic’s sniffing software to find the offending videos, and warned users of the change last month.

It looks like the removals aren’t limited just to videos containing Universal music, either. Robert Mowery, a Grouper user, forwarded a take down email today involving a certain Kenny G song, Midnight Motion. Kenny G’s label is Arista, a subsidiary of Sony and a sister company to Grouper. This comes just after recent news that Sony was softening their stance on this kind of thing.

He writes “The video they mention here was set up as Private view only for family and friends, so it is not even on mainstream. Second, my wife and I put the family video together and used one of the Kenny G CD’s that I had bought for her to pull music for the video. So, not only did I use purchased music - it was for private viewing.”

Here’s the email from Grouper:

TOS Violation Notice

Dear Grouper User,

This is to notify you that we have not allowed the following video clip to be posted on Grouper.com because the audio portion of the content appears to be unauthorized by the copyright holder:

Title: The Kids Enjoying Summer in July 2006
Description: Liam, Jacob, and Madison enjoying summer moments of Liam’s birthday, swimming lessons, and Madison’s Christening.
Video ID: 1436087
Artist: Kenny G
Song Title: Midnight Motion
Record Label: Arista Contemporary

Please Note: Repeat incidents of uploading material alleged to infringe a copyright will result, at our discretion, in the deactivation of your account and all videos uploaded to that account. In order to avoid this, please delete any video to which you do not own the right, and refrain from uploading additional videos that infringe on the copyrights of others. For more information about Grouper copyright policy, please read section (3) of our Terms of Service agreement (TOS). http://grouper.com/tos/

If you believe this video was removed or disabled in error and the video does not violate anyone else’s rights (including rights in the audio portion of the video), please provide a written communication showing that you are the copyright owner or are otherwise authorized by the copyright owner to make this restoration request, including:

Your physical or electronic signature

Identification of the material that has been removed or to which access has been disabled and the location at which the material appeared before it was removed or access to it was disabled.

A statement under penalty of perjury that (1) you have a good faith belief that the material was removed or disabled as a result of error and your posting of the material does not violate anyone else’s rights and (2) you are the copyright owner or are authorized by the copyright owner to upload this material.

This written communication should be sent to:

Copyright Violations
Grouper Networks
475 Gate 5 Road, Ste. 255
Sausalito, CA 94965

Or email: copyright@grouper.com

By submitting this written communication, you acknowledge and agree that we may forward the written communication and other communications with you to third parties for verification.

We will investigate your claim as quickly as possible.

Thanks,
The Grouper Team

Personally, I wouldn’t mind other video and music sites taking a similar stand again the inclusion of Kenny G music in user generated content.

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On the day of the Google/YouTube acquisition, YouTube announced a licensing deal with Universal Music. Apparently, Grouper and Bolt.com didn’t get the memo. Universal Music has come out swinging in their first online video-related lawsuit against two of the lesser-known online video sharing websites, Bolt.com and Sony’s recent acquisition, Grouper.

The lawsuit takes aim at the websites’ ability for users to swap pirated versions of its’ musicians videos and seeks as much as $150,000 for each incident of copyright infringement.

Bolt.com operates much like YouTube, allowing users to only view Flash versions of the videos in their web browser without any ability to copy the video to their physical computer. Shutdown Bolt.com or remove any materials from the website, and they are no longer accessible by anyone. Alternatively, Grouper users can download the videos to their computer, iPod, or PSP. Thus, similar to how the old Napster operated with music, if a user downloaded a physical copy of a Grouper video to their computer, then the user will be able to view it indefinitely, even if Grouper were to shut down or remove the videos from Grouper.com.

Surprisingly, other websites weren’t mentioned in this lawsuit. Metacafe is larger than both Grouper and Bolt.com (according to Alexa data) and a search for Universal Music artist Mariah Carey resulted in several music videos of her, along with a pre-roll video advertisement for CareerBuilder. Another that wasn’t named in the lawsuit is Guba, which has blatant copyright infringement occurring on their website as a result of their indexing pirated videos from Usenet. Despite teaming with the MPAA and supposedly cracking down on piracy with software called “Johnny,” users can easily view tons of music videos on Guba’s website or download them to their computer, iPod, or PSP. A search on Guba for Universal Music artist Mary J. Blige, returned several of her music videos.

According to comScore, Bolt.com had 8.1 million unique visitors in August and Grouper had 1.8 million — whereas YouTube had 72.1 million.

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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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Sony Pictures is announcing the acquisition of online video startup Grouper tonight, Tuesday, at midnight EST. The acquisition price, confirmed by Grouper, was $65 million in cash. Our previous coverage of Grouper is here.

Sausalito, California based Grouper has built three key technologies: an online video sharing site, a desktop video editor and most importantly a closed (non-bittorent) P2P network for distributing media. Michael
Arrington called Grouper Version 2 a “near perfect product” when he reviewed it at launch in December. The company reports that it had 8 million unique users last month (which, unsurprisingly, conflicts completely with Comscore data discussed below). Grouper was backed by $5.25 million in funding, largely from Deutche Telecom’s T-Online.

Sony says they will use Grouper’s technology to share lower quality Sony videos online, distribute DVD quality video by P2P and allow users to create mashups of select Sony media properties. Grouper says the P2P network took the company two years to build. The fact that Sony is strong in both content and hardware made Grouper more interesting than other video startups, though company President Josh Felser told me that several studios were interested in an acquisition. Prior to being CEO of Grouper, Felser was the President of Spinner.com, acquired by AOL for $320 million in 1999.

It’s obvious that online video is hot right now. Major companies have been making distribution deals and launching their own download services.

However, the Grouper acquisition price is out of whack when compared to other recent video acquisitions. US Comscore data says Grouper had about 542,000 unique visitors in July 2006, compared to YouTube’s 16 million. Viacom’s recent acquisitions of iFilm (December 2005, 3.3 million U.S. uniques) and Atom/Shockwave (August 2006, 1.3 million U.S. uniques) for $50 million and $200 million, respectively suggest a per-unique-visitor valuation of $15-$20. Grouper’s per-unique-visitor valuation, by comparision, is roughly $70 - $120, depending on whether you look at June or July 2006 data.

It’s hard to use Comscore data for meaningful analysis as it doesn’t necessarily reflect total videos uploaded or viewed, and doesn’t reflect videos embedded on third party sites. I also only have U.S. Comscore data. However, noting those issues, the $65 million valuation on Grouper suggests a YouTube valuation of around $2 billion.

Of course, it looks like Sony was most attracted to Grouper’s P2P technology for movie distribution, meaning YouTube comparisons are inappropriate. $65 million is still a lot to pay, however, and bittorent, as well as services like Red Swoosh (covered here), are proven and effective means of moving large amounts of data over the Internet.

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Grouper, a video sharing site we’ve covered a number of times before, has launched a very cool new feature that could disrupt the crowded world of online video sharing. Viewers can now add their own video comments to Grouper videos and the comments can be watched inside the same embedded player. In just a few weeks the embedded players themselves will be able to record the video comments - right now you have to click through to the Grouper site to record.

Here’s a Wordpress blog post with an example of the new feature, though not all videos autoplay like this one. Account registration is required to leave a video comment, but it’s a remarkably painless registration. Comments appear without approval but can be removed individually by the publisher of the original video.

Text comments are possible in Grouper, but as they say - text comments in response to videos are usually boring.

Grouper used to operate exclusively through a Windows desktop client, but the company told me that since it enabled web based sharing in October its user numbers have grown from 1 million to 8 million. The company was originally funded by its founders (who sold Spinner.com several years ago), a number of angel investors and a $1.5 million investment from Deutche Telecom’s T-Online, the 3rd largest broadband ISP in the world.

The company’s business model is primarily based on corporate partnerships. MTV, for example, has videos featured on Grouper. In another interesting partnership, the company recently announced that Grouper would be folded into the software for Logitech digital cameras. That’s a pretty big deal.

The good news just doesn’t quit for this company. They also told me that they’ve hired Chris Amen-Kroeger, former Director, Streaming Network Operations for AOL and VP of service delivery at Salesforce. Amen-Kroger starts work at Grouper on Monday.

A very compelling feature set, great user experience, big partners and an experienced team. Grouper is a company to watch and a service you might enjoy using.

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As I’ve written many times before, the online video space is getting fairly….ahem…crowded (more).

One company in the space, Grouper, is dealing with the competitive heat through humor (in an intelligent way - by using their product as the host).

An internal Grouper email was sent out to all employees today that said “Grouper Street Fighter. Description: It’s coming for you…watch Grouper destroy the competition“. The email also had a link to a (Grouper) video that shows Grouper beating up (literally) its competitors.

My favorite part is when Grouper does a flying face kick to YouTube.

Previous TechCrunch posts on Grouper are here.

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As I continue my journey to find the flickr of videos, I may have found the (near) perfect product - version 2 of Grouper which launches tonight.

Grouper is only available for windows and requires a download. But it’s worth it. The product is currently free and allows unlimited uploads of photos and video. Each piece of content can be shared with the public, kept private or shared just with a select group of people.

The publisher can also tag content for easy search/find later. And RSS feeds are availble for tags and publishers.

Grouper is a Windows XP based application that allows users to share their personal media with the world and/or safely within private groups. With Grouper users can upload video and photo previews to Grouper.com where anyone can view them and then choose to download them via our distributed download network. Grouper also uses P2P technology to connect you directly to your friends’ hard drives where they can share large media files in a safe, encrypted environment. Grouper is a simple install and requires no firewall reconfiguration.

A key feature is the ability to create your own “Groovies”, or movies. This is a set of tools which allows users to mash up various video clips, photos and music/audio, along with title pages. These basic tools, all free, give users the power to create really cool videos on the fly and share them with others.

Based on the name, I suspected that Grouper was saving them in a proprietary format that could only be viewed on their website or via their client, but there is an option to download and share these files in WMV format. This is absolutely awesome.

I feel as though I’ve only touched the surfact of Grouper, and I’m going to continue to test the product. They just may have set the new standard for video sharing on the web (at least for the windows platform).

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I’ve been tracking a number of sites that offer flickr-like services for video.

I’ve taken a look at as many of these services that I could find. The most well known is YouTube, which we profiled in August and which recently raised venture money from Sequoia.

But there are at least eight others worth looking at as well. In addition to YouTube, these are CastPost, ClipShack, DailyMotion, Grouper, OurMedia, Revver, Vimeo and vSocial.

Instead of writing individual profiles on each of these, I’ve created a quick chart that give a basic overview of the features. I’ve included only those companies that provide a web-based (v. client) service that hosts the videos on your behalf. Because of these requirements, great services like VideoEgg (profile) are not included.

Here’s the chart. I’ll update it as needed.

Most of these companies convert video to Flash. This reduces file size significantly and also allows most platforms and browsers to easily view the content. Two, Vimeo and DailyMotion, convert files to quicktime instead. A couple do not convert the files at all. One benefit of those services which do not convert is that the files can be downloaded by others, emailed, etc. QuickTime format can also be downloaded.

One service that has a unique feature is Revver. Much like FruitCast for podcasts, Revver will auto-insert advertisements directly into your videos and share revenue with you.

A couple of additional notes. Grouper has not launched their video publishing product yet. When it does launch there is a good chance it will involve a client download which would remove them from this list. Also, while I’ve noted which services allow tagging of videos, there are a wide variety of tagging options within these services, and many of them also provide comments, rankings, etc. and which are not noted in the chart. Finally, the tools to allow blogging, friends lists and other sharing are varied and more useful in some products than others. Which product is best for you depends on what types of features are most important to you.

UPDATE: I’ve updated the chart above with more information. People have left great comments and have included new companies I’ve missed. If you are associated with those companies, please email me relevant information and I’ll include it in the chart. The most interesting comment is from Vinu, who tells us that he heard a rumor that Flickr will be adding video support soon. That would have a significant impact on this market, of course.

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