Cuts Admits It Chose a Crowded Market

Cuts, an online video editing startup that launched in February, has sold to DVD commentary site Rifftrax for an undisclosed sum. Interestingly, Cuts investor Josh Kopelman of First Round Capital admits in his blog post on the topic today that the company elected to bow out of a crowded space at a loss to the investors’ expectations.

Although Cuts.com’s product has been praised for its ease of use and fun, the market for a stand-alone video editing site has quickly become very crowded and competitive. And while this transaction was not the huge win we were playing for, I’m happy that Evan and his team were able to find a home for their business.

I wasn’t quite sure what to make of Cuts when we first profiled it in February, though we were on the whole optimistic. At the time, I wrote:

What I’m having trouble with is deciding whether video editing is a novelty — as seen in Jumpcut’s contest-oriented business model — or a tool. I mean, it can’t be that good of a tool; Cuts, Jumpcut, Eyespot, and Motionbox alike tout the simplicity of their features. If you really want to mess around with a piece of video, they say, buy a piece of software. The web is for small tasks and instant gratification.

Cuts had been a bit confused all along; when it launched at DEMO last year the company was making a piece of desktop software which parents and teachers could use to recut DVDs to be appropriate for children or classroom settings. When it dove into the online space, it was a bit late, with competitor Jumpcut already being bought by Yahoo. But more importantly, it’s interesting to see the online video sector start to shake out. Consolidation seems inevitable; we’re just waiting for some of the smaller players to swallow their pride.