Media & Fruits Part I: Orange in Daily Motion

Orange bought 49% of Dailymotion. This information is creating some buzz lately, especially related to the backstage discussions: VC’s, french government, Viacom…

There are a few interesting strategic implications in this deal:

  • Dailymotion was already profitable, which means they succeeded finding a place in the aggregation spot with revenue streams. Orange’s markets could trigger interesting leverage…
  • Dailymotion and Orange were already partnering at infrastructure level, apparently. Indeed, the main cost of an online video portal is hosting and bandwidth. This deal could have a positive impact on Dailymotion’s cost structure, without being too heavy for Orange (thanks, Alex, for this one)
  • Orange announced recently a new strategy more focussed on content aggregation than content production. I recently found out through DIRT that aggregation is the tipping point for Digital Information Consumption and Distribution Ecosystems Business Models. So this is a growth area without the hassles of content production…
  • Dailymotion won all its trials for copyright infringement (TF1-case court decision has not been made yet) which makes it a clean platform at regulation-level. Proximity with french government cannot be bad on this field…
  • Aggregation is about platforms and audience. Platforms growth is key to customers and complementors relationship (read past posts about Platform Utility) and audience is easier to monetize than content these days
  • Online video is one of the key growth trend (see this Morgan Stanley Report, slide 35) in the coming years. Turning bandwidth into customer attention and engagement, or even money if bandwidth is not yet a commodity… Orange and Dailymotion have the right ingredients for this explosive mix!

So, even if the price doesn’t sound as the deal of the century for none of both parties, leaving latest valuation figures around american social networks out of space, it sounds as a clever win-win partnership for both companies growth.

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1 Response to Media & Fruits Part I: Orange in Daily Motion

  1. Pingback: Media & Fruits Part II: Attack of the Paper-Killing Apple |

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