Why Sony Buys Grouper

The SF Chronicle reports that Sony Pictures Entertainment is paying $65 million to buy video-sharing site Grouper, based in Sausalito.

So what does that mean? Certainly, Sony is looking for a “playstation” to promote its entertainment content, albeit Grouper is not really a leader in attracting eyeballs: the site logged about 630,000 viewers last month, according to Nielsen/NetRatings, whereas YouTube has 30 million. Still, the rationale makes sense: "We want our movies wherever consumers are spending their time," said Sean Carey, Sony's executive vice president of digital distribution and acquisition. "There's a shift where the audience is spending its time and it's increasingly on user-generated sites." But Grouper users could also mash-up Sony television shows and films on the site, combining them with their self-generated content.

What might excite Sony even more is the prospect of having access to user-generated content it could push out to one of its mobile players. The recipe is clear: Combine user-generated content, location-based services, social networking and tailor it to mobile devices - and you have a killer app for the “anywhere, anytime, anything you want to know about me” generation (think mobile video dating sites etc.).

The staggering Japanese giant desperately needs some hits – the company has every reason to be nervous about is postponed PS3 launch and is now also haunted by the recent battery disaster.