Netco shifts strategy with acquisition
Video Web site Bolt.com is planning to shift from user-generated content to original production as part of its acquisition by GoFish.com and settlement with Universal Music Group.
GoFish announced a deal to acquire Bolt earlier this month to acquire Bolt for up to $30 million in stock, as well as a settlement with UMG. Both deals have been rumored to be in the works for several weeks.
UMG sued Bolt and fellow viral video site Grouper in October for copyright violation in a clear bid by the label to encourage video Web sites to sign revenue-sharing deals.
Left without the resources to fight UMG in court, Bolt agreed to be acquired by GoFish. As part of the agreement, GoFish, which already has a deal with UMG to share revenue, extended its pact to include Bolt and add new provisions. Bolt’s settlement with UMG is believed to be worth several million dollars and include some equity.
In a unique addition to its existing deal, GoFish will allow users to put UMG music on any clips they upload. Netco will then pay a fraction of a penny to the diskery for each play of a video with its songs.
“One of our competitive differentiations is going to be our ability to make deals like this with labels and video companies,” said GoFish topper Michael Downing, whose site is growing but is still dwarfed by the biggest players, especially YouTube.
Bolt topper Aaron Cohen will be taking a senior position at the combined company and will focus on developing original content for the Web.
“User-generated content is not the future for this business,” he told Daily Variety. “It’s in enabling users to participate in the framework of better-produced assets.”
He added that Bolt is already producing its own video content and also plans to work with outside producers.