Serious Drama, And Lots Of Stupidity, Behind Stage6 Shutdown

Yesterday San Diego based DivX announced the shutdown of popular video site Stage6, to the surprise and dismay of the site’s 17.4 million happy monthly visitors (the post on the shutdown has over 5,000 comments).

There’s lots of speculation around why DivX is shutting the site down, ranging from piracy issues to the spiraling CDN costs of streaming all that HD content. But what really happened, according to multiple sources, is that a ridiculous battle of egos at the DivX board level caused most of the team to simply quit. DivX, essentially, snatched defeat from the jaws of victory.

First a bit of history - just before DivX went public in late 2006 it launched Stage6 as a way to show off the capabilities of the DivX codec. Without any promotion at all the site quickly gathered users. By mid 2007, when the site went into beta, it had millions of users and tens of millions of page views. The high quality video was key - users simply flocked to it.

DivX cofounder and CEO Jordan Greenhall knew he had a potential hit on his hands. He decided to explore a sale of Stage6, and hired investment bank Montgomery & Co. to see who might buy it. He also started pitching VCs on the idea of funding it as a spinoff. Given the conflict of interest, he resigned as CEO of DivX - president Kevin Hell took over the company. Darrius Thompson, (DivX co-founder), Mark How (DivX VP Business Development), Mark Chweh, Chester Ng and about 20 other DivX employees joined him. All shared the title of “cofounder” at Stage6.

Montgomery spent the second half of 2007 pitching Stage6 to buyers, although there wasn’t much interest. But VCs were eager to buy in to the idea of a spinoff. By November they had commitments from Crosslink Capital, Sofinnova France and Mission Ventures to invest $20 million at a $90 million post money valuation. Another $5 million was committed from a strategic investor, plus $2 million more from “friends and family.” All in all, Stage6 was preparing to close a $27 million round. DivX was to retain 20% ownership in the new funded entity.

Not only was DivX to receive a substantial chunk of equity in the new company, they’d be able to get the operating costs, estimated to be around $1 million/month in CDN costs alone, off their books. And Stage6 was to give most of their 2008 revenues back to Divx as well.

Those revenues were not immaterial. Everyone who views a video on Stage6 must first download the DivX player. Packaged with the download was an option to download the Yahoo Toolbar. The revenue from Yahoo to DivX is around $16 million per year. Our sources estimate that half that, or around $8 million/year, was due to Stage6 downloads. And that share was growing - 2008 toolbar revenues may have been as high as $10 million, making Stage6 almost breakeven.

At a meeting in late November the DivX board was asked to approve the spinoff and venture financing. But at the last minute the board decided to cancel the spinoff and retain control of Stage6. It’s not clear why they did this - perhaps they were surprised at the valuation and wanted to keep control of the assets. Or perhaps the revenue from Stage6 was too material for them to let it go over the long run. From what we hear a massive battle of ego’s ultimately killed the deal. But when the decision was made, the key Stage6 founders resigned. DivX made a brief announcement about Greenhall’s departure, and added that it “expects to take additional time to consider the alternatives available to the Company related to the future of the Stage6 service.”

From that point everyone expected DivX to just continue to run the site. But over December and January they may have become concerned again about the costs of streaming the video and running the site without most of the key team there to look after things. Three weeks ago, we hear, DivX re-approached Greenhall and asked if they’d like to do the original deal. Greenhall declined.

So then DivX announced the closure of Stage6. When it shuts down all those millions of DivX downloads and associated Yahoo revenue goes away with it. At the end of the day DivX threw out the baby, the bathwater, millions of dollars in revenue and tens of millions of users. Their board and executive team, in short, look like fools. Investors seem to agree - the stock hit an all time low today.

DivX declined to comment on this post.

By

Michael Arrington

Canon HV30 - Camcoder

The Canon HV30 is the successor to the award winning HV20 camcorder, building upon the same core as the HV20 adding some extra features in response to fans and critics. On the surface the cameras look very similar with the HV30 coming in black instead of silver and retaining the same barrel shaped form factor to accommodate the 10x optical zoom lens. Alongside the same lens the HV30 uses the same progressive capture 1/2.7" CMOS sensor that records video in the HDV format (1440x1080 resolution) onto miniDV tapes. The major improvements come from fixing some annoying design decisions of the HV20 and the addition of a 30p recording mode for Internet content.

Pros & Cons

Pros:


•30p mode is a very welcome addition
•Same great recording performance as HV20
•Much improved hot shoe cover that doesn't fall off
•Great manual controls
•Fast auto focus

Cons:

•No focus ring
•Worse than Sony for ease of use
•Auto-Focus snaps to focus instantly

More information

Specs

10x optical zoom lens
3.1MP CMOS sensor
up to 1080i video recording
miniDV tapes for storage
2.7" LCD monitor, 211K pixels
Internal lens cover mechanism
Battery life: 1 hour
Data ports: USB2.0, Firewire
Video ports: Component, S-Video, HDMI

The instant auto focus mechanism uses a separate AF sensor to determine distance to the subject, with the image processor handling the finer adjustments. In good lighting conditions and using the standard 60i recording mode the AF takes about 2 seconds to work. The number decreases when the lighting is lower and can be dramatically increased if the AF sensor is covered, and the 24p/30p shooting modes are used.

The 24p shooting mode is a carry-over from the HV20 and attempts to simulate the more blurred motion of natural film movies. Canon also includes the cine shooting mode that changes gamma and color settings to achieve a more muted film-like look. New for 2008 is the introduction of the 30p mode. This mode captures a progressive image at 30 frames per second. The benefit of 30p is that it converts better to Internet formats that are usually viewed at 15 frames per second. Alongside the natural blurring that occurs at the 24p/30p modes, these slower capture rates have the added benefit of better low light performance.

Nubrella

The Nubrella is a hands-free umbrella that sits on your shoulders and covers your upper body with a waterproof canopy. The Nubrella basically eliminates the problem of your umbrella turning inside-out and allows you to have 2 hands free while walking, making it easier to talk on the phone or carry things when it's raining. Nubrella is a patent-pending design, created by Alan Kaufman.

Pros & Cons

Pros:


•Can bike with an umbrella
•Hands-free umbrella
•Reasonably priced

Cons:

•Goofy looking
•Can't share the umbrella

More information

Features

Tested up to 50mph
Folding design
Over-the-shoulder carrying case
Weight: 2.6 lbs
Spring-loaded opening and closing
Push-button opening
Canopy materials: thermoplastic polyurethane and nylon
Adjustable shoulder straps


• Official Nubrella site - http://www.nubrella.com/

Sony VAIO TZ150N Laptop Review

I purchased the Sony VAIO TZ150N to replace my outdated desktop and after only a couple of weeks, I'm coming to realise it's been the best purchase I have made in quite a long time. As a first time expensive computer buyer, I wasn’t quite sure what to expect when I first purchased the laptop. I’ve come to find that the Sony VAIO TZ150N is top of the line in just about every way, including speed, power, and appearance.


Processor Brand: Intel
Processor Class: Core 2 Duo
Processor Speed: 1.06 GHz
Mobile Technology: Intel Centrino Duo
Installed Memory: 1 GB
Hard Drive Capacity: 100 GB
Display Size: 11.1 in
Operating System: Microsoft Windows Vista Business
Weight: 2.6 lbs


The Sony VAIO TZ150N’s design is what catches your eye to begin with. It’s has a wonderful look that really draws the eye. Unlike a lot of computers today, this one is slim and light. It seems like Sony has taken the initiative to join in with the rest of the computer makers who are offering slim computers. I’ve discovered that this one is not all flash, though. There are some big time features, as well. .


The first thing that caught my eye was the excellent battery life. On average, the battery lasts for close to four hours, so you never have to worry about your machine dying at the worst time. This was a draw for me, since my old computer had chronic battery problems. In addition, I appreciate the added performance that I get out of the machine. It comes equipped with 1GB of ram and has an Intel Core 2 Duo, which makes it one of the most powerful machines on the market. .


The fringe features are something to write about, as well. This machine is small and is only about an inch thick. That didn’t stop them from outfitting the Sony VAIO TZ150N with a DVD burner, though. This extra feature allows me the freedom to copy video files without having to leave the house. The computer also features an enhanced sound system, which makes movie watching an absolute pleasure. Before I purchased the machine, I read some reviews that were critical of the computer’s screen. I have had no such problems, though, and still find the screen to be both functional and good looking. .


I was particularly concerned with getting a computer that had flat keys. The keyboard is much like many Apple computers, in that the keys are evenly spaced out and the keys are not raised. This makes typing much easier and allows me to complete papers and other assignments without too much trouble. In addition to that, the touchpad is highly functional and quite easy to use. I have long been a fan of the button on IBM computers, but this new touchpad has opened my eyes to a new way of doing things. .


All in all, the price of this computer is fairly high compared to many other computers, but is somewhat low on the Sony scale of things. It checks in at just under $2,300, though I managed to get mine on sale. It comes with a standard one year warranty, but that can be extended to a two-year warrant for only $149. That is what I did and it makes me feel much better about my machine. .


The Sony VAIO TZ150N is the perfect computer for a person who cares about sleek design. It’s a thin, powerful laptop that packs a lot of punch. That, combined with the powerful battery, makes this computer a great buy. Because it’s so expensive, it’s definitely a good idea to go with the extended warranty, though.