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Grouper is the eighth-largest, web-based video streaming site on the net. It get about 1% of all traffic and it’s viewers typically spend 5 minutes on the site. On teh other hand, YouTube has 43% market share and viewers spend 13 minutes on the site in a sitting. Sony Pictures has chosen to purchase Grouper as their entryway into the web based content landscape. Competitors in the sector number more than 200. Besides YouTube, some of the other video sites that have attracted attention are Revver, Metacafe, Heavy.com, Dailymotion and Guba.

“Connect (Sony’s digital music site) has been horrible,“ Bajarin said. “They definitely need an iTunes’ equivalent. What they are likely going to want is to capitalize on their own content and marry it with some user-generated content.“ Bajarin said Grouper’s users are mostly teens and young adults who are comfortable buying on the Web. To such an audience, Sony may be able to sell music and consumer electronics, as well as movies over the Web.

The Sausalito, Calif.-based Grouper was founded in 2004 by a group that included Josh Felser, one of the founders of Spinner.com, which was sold to AOL in 1999 for $350 million. Felser, 42, has remarked recently that the market for video-sharing sites has been heating up but that Grouper’s leadership was not seeking a buyer. “We had other options including financing,“ Felser said. “When this started, we were pursuing an operating deal with them. We made this deal because we want to win and we think Sony will help us do that.“

Read [News.com]

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