Orange takes on YouTube? Telco buys 49% stake in Dailymotion

26/01/2011

French telecommunications provider Orange is in talks with video hosting site Dailymotion to buy a 49% interest for EU58.8m (£50.8m). The deal, which is expected to close within a few months, also gives Orange the option of buying the remaining stake in 2013.

Orange is keen to buy Dailymotion, a key rival to Google's YouTube, in order to become a multiplatform content aggregator and distributor. In July, Orange bought a smaller stake in music streaming provider Deezer, and the two have released a co-branded music subscription service in August that now has half a million subscribers.

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Before these latest negotiations with Dailymotion, the two worked together, allowing users to access the site using Orange set-top boxes.

Future collaborations could involve streaming premium content from Dailymotion to higher-end Orange subscribers not only at home but when mobile as well.

The deal should also help Orange expand beyond its own market, as nearly 80 percent of Deezer's traffic comes from outside the country.

Concern has existed that such controlling stakes could be used to violate net neutrality principles by favoring content hosted on DailyMotion while charging extra for or slowing down traffic from a rival like YouTube.

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