Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

Stage6 Shutting Down...What's The Future For 100+ Other Online Video Sites?

Posted by Tom Foremski - February 25, 2008

It seems that the consolidation in the huge number of online video sites is beginning...

Stage6 is closing February 28. This is a high definition video site set up by DivX to promote the high quality video codec and then it was spun off as a private company in July 2007.

The problem that Stage6 ran into was that it is an expensive business to run especially when the business model for online video sites has yet to be determined. It's a problem that the other 100+ online video sites are facing each day. It's clear that many of them will make the same choice as Stage6 and shut down.

What happens to all the video work from users that uploaded and linked to the content? A lot of broken links...

Here is a statement from Stage6 about its closure:

I'm Tom (aka Spinner), a Stage6 user and an employee of DivX, Inc., the company behind the service. I'm writing this message today to inform you that we plan to shut down Stage6 on February 28, 2008. Upload functionality has already been turned off, and you'll be able to view and download videos until Thursday.

. . . In many ways, though, the service did succeed, beyond even our own initial expectations. Stage6 became very popular very quickly. We helped gain exposure for some talented filmmakers who brought great videos to the attention of an engaged community. We helped prove that it's possible to distribute true high definition video on the Internet. And we helped broaden the Internet video experience by offering content that is compatible with DVD players, mobile devices and other products beyond the PC.

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. There are a lot of other details involved, but at the end of the day it's really as simple as that.

. . . As Stage6 grew quickly and dramatically (accompanied by an explosion of other sites delivering high-quality video), it became clear that operating the service as a part of the larger DivX business no longer made sense. We couldn't continue to run Stage6 and focus on our broader strategy to make it possible for anyone to enjoy high-quality video on any device. So, in July of last year we announced that we were kicking off an effort to explore strategic alternatives for Stage6, which is a fancy way of saying we decided we would either have to sell it, spin it out into a private company or shut it down.

I won't (and can't, really) go into too much detail on those first two options other than to say that we tried really hard to find a way to keep Stage6 alive, either as its own private entity or by selling it to another company. Ultimately neither of those two scenarios was possible, and we made the hard decision to turn the lights off and cease operation of the service.

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