Written by Liz Gannes
Posted Friday, February 27, 2009 at 3:00 AM PT

The Shakeout Begins! Video Startups in Play

It didn’t take long after the credit crunch last fall for waves of layoffs to hit online video startups. But surely all those tweaks and cuts didn’t successfully revive every single company’s fate. And now, we’re seeing the ensuing wave of startups putting themselves up for sale (and we don’t mean in that “we’re always open to a great offer” kind of way).

ManiaTV has a week or two left in it, at most, according to laid-off employees. At least 15 more were let go this Tuesday as the company rushes to close a sale. This came after investors decided to pull out at the beginning of the month, and on the heels a previous round of layoffs in October as well as significant attrition.

60Frames, which also made significant layoffs last October, is another company whose name has come up as an active would-be acquisition target.

A spokesperson for 60Frames offered a wide-open official statement:

The company experienced a tremendous amount of success in 2008, and is excited about projects underway this year, several of which will be announced soon. 60Frames has, per its original business plan, begun conversations concerning its next round of financing, and is currently exploring a number of options and partnerships with both financial and strategic partners.

Another name that keeps dropping in our inbox (and around town) as a shutdown/sale target is HBO’s HBOlab/Runawaybox, the digital unit that’s long been run separately from premium TV network and makes show such as Man in the Box and Hooking Up. According to sources, some assets are close to being sold off, but not for very much. We’ve put in many, many calls but nobody will give us an official comment.

And these are just three examples. We heard from one prospective video site buyer that he’d seen some 20 slide decks in the last two weeks!

So who’s strong enough to weather this storm without being forced to sell? Especially considering the rapid encroachment of big media companies (and now even the cable cos!) fighting for web eyeballs. Considering the unavailability of VC money and the terrible market, there seem to be more healthy startups than you might think. We’re surprised on a daily basis at how much positivity people can wring out of the current climate (and perhaps more importantly, how cash many companies still have in the bank). If they can hold onto their investors’ goodwill, and keep chugging away at the bottom line, we may well still have an online video industry next year.

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Topic: Startups

Comments (8)

You nailed it on the head… this is an amazing article, Liz.

Jon Labes — 7:04 AM on February 27, 2009 Reply
I could give these video start-ups to my web developers and have them replicated in a couple of months, I would be interested to see how much they sell for though…

Neno Brown — 7:20 AM on February 27, 2009 Reply
Who cares if you could “replicate” the site, the site design doesn’t make the companies, content, relationships with content providers, advertisers, media and other backend people processes are what make the sites.

You could replicate the site all you want, doesn’t mean you are going to have big networks and premium content providers clamoring to put their content on their site.

William — 8:40 AM on February 27, 2009 Reply
Exactly!

So whats the differentiator?

Neno Brown — 8:46 AM on February 27, 2009 Reply
Quit the false bravado Neno. You couldnt assemble a team that could build a YouTube or Vimeo copy in less than 18 months.

Jonathan Marcus — 9:23 AM on February 27, 2009 Reply
@Marcus

AaaaRggh You hurt my software developers ;0)

Neno Brown — 9:56 AM on February 27, 2009 Reply
Positivity? Thank you Ashley Tisdale.

jim

Jim Louderback — 8:43 PM on February 27, 2009 Reply
The silly part is that ManiaTV used to have a differentiating model from day 1. Viewers could interact with the live DJs via chat, or webcam, and they had a video stream with live DJs 24/7. You could actually interact and get yourself on screen, etc. But the frauds who took over the station like Hoskins wanted to blow money ten times faster by moving to L.A. and hiring washed-up douches to produce shitty content. Now all the VC money has finally dried up and their paychecks are about to bounce, so they’re trying to get rid of it.

Your Mom — 4:09 PM on March 2, 2009 Reply

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