Dailymotion nears ownership switch with kids subscription plan

Gigaom

YouTube rival Dailymotion is making its first foray into subscription video on-demand (SVOD) with a €4.49-per-month bundle aimed at children, as it aims to show circling investors it can be more sustainable.

Dailymotion’s France EVP Martin Rogard tells Les Echos the Dailymotion Kids Plus package, will host a library of over 1,000 videos after acquiring licenses from producers, who will be paid according to subscriber numbers, including Inspector Gadget maker Cookie Jar.

The launch is interesting for three reasons:

  1. It shows Dailymotion is searching for more non-advertising income.
  2. It further illustrates that operators are attracted to chargeable kids’ content.
  3. It comes as Dailymotion’s ownership is likely to change in the next few months.
1. Dailymotion fortunes

Dailymotion recently tied up with Pirate Bay co-founder Peter Sunde’s Flattr system to allow viewers to make micropayment donations to video creators they value.

But that pales against a full paid video strategy, which is ramping up. Dailymotion is likely to follow up its kids’ package with further categories including movies, Rogard tells Les Echos:

“We’re starting to educate our partners on the subject. Systematically, we will propose a mix of free and paid content. For us, it is important to walk on our own two feet.”

2. Kids boom

Netflix recently carved out its kids section with a separate UI. Amazon recently launched an unlimited kids content strand atop Amazon Prime. Each clearly believes  that on-demand cartoons and other shows are assets modern parents will happily pay for.

And why not? Prospects for kids content payment are healthy. FT:

“A study of 2,200 iPad-owning parents in the US and the UK, carried out by Kids Industries, found that parents downloaded an average of 27.2 apps for their children each year, spending about $100 in total.”

3. Investment coming

Today, Orange owns 49 percent of Dailymotion following its €61 million 2011 investment. When it invested, the telco also took an option to buy the remaining 51 percent. That right must be exercised by the looming spring 2013.

Although Orange may soon do so, such a deal would not be forever, 01net reports:

“Orange does not intend to stay a 100 percent shareholder of the site for long.

“The telephone company is looking for a new shareholder, and it has already mandated two banks — Messier, Maris & Associés of France and Raine of America.

“One avenue under consideration is to find a U.S. shareholder which would help to develop Dailymotion overseas.”

The implication here is that Dailymotion’s venture backers want out, and that, in their absence, Orange does not want full long-term ownership either.



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