Tuesday, February 26, 2008
San Diego based, Divx, best known for the popular mpeg4 licensing business, today announced that they are shutting down their Stage6 video sharing website. This has rightly gotten a good bit of play in the blog technosphere (see Techcrunch, Gizmodo, GigaOM, Webware, Mashable, Etc), as Stage6 was a pretty popular service. I personally used Stage6 all the time as it was a good source of content (both original and piratted), and felt quite superior to your typical Youtube knockoff, both in terms quality and speed.
According to their official blog response the reason for the shutdown was "that the continued operation of Stage6 is a very expensive enterprise that requires an enormous amount of attention and resources that [they]are not in a position to continue to provide." Of course as Techcrunch and some of the other blogs have dug into, when they passingly mention that "there are a lot of other details involved" what they really mean is that a rediculously stupid power trip originating from the Divx board over how to properly spin off the new company was a huge problem.
As Arrington put it, "throwing the baby out with the bath water" was certainly the case here. Stage6 had impressive funding to branch off and a business model that was actually working. Throwing out the revenue that Stage6 was making, as well the positive consumer impact it had on the Divx brand because they didnt have the resources to devote to it or the stomach to pound through the internal politics is amazingly short cited on their own. Even just considering Stage6 as its own entity its pretty easy to see that they come out of the gates with great traction and a semi niche, both of which any one of the new video sharing sites we see pop up daily would kill to have.
Overall on the business end this whole thing just exemplifies bad leadership and decision making. Plus as a consumer, I have just got to say I'll be sad to see Stage6 go.