Dailymotion in Critical Condition One Year After Vivendi Acquisition

This month marks the one year anniversary of Vivendi’s acquisition of Dailymotion for over $272 million, but, as often happens in acquisitions, the companies have struggled to integrate.

The result — Dailymotion will shutter its Palo Alto office and is hemorraging employees faster than they can replace them including its senior team. French publication LeMonde cited that Chief Operating Officer Martin Rogard will be wrapping up his role over the next few months. Rogard is among the last of the legacy senior executives to depart the company. One source has told VideoInk that the company has lost over 100 employees, and that this past month was the first in many that the body count wasn’t in the negative for the online video platform. Another executive noted that the company is giving bonus incentives to employees who refer new hires. Dailymotion’s U.S. operations will hub from New York and Los Angeles.

Dailymotion is primarily recruiting for the engineering team, which is led by Guillaume Clement, another executive who had been on his way out the door before being elevated to Chief Technology Officer, a “save” that one executive claims was crucial for team morale and signaled Vivendi’s commitment to scaling Dailymotion’s product.

There’s no question, Dailymotion has been in transition, both preceding and following the acquisition.

Virginie Courtieu-Peyraud

Shortly after the news of the deal, the company announced internally it would be replacing CEO Cedric Tournay, but failed to do so for many months. Dailymotion finally announced Canal Plus’ CEO Maxime Saada would take over CEO responsibilities while also maintaining his post at Canal Plus, the cable network also owned by Vivendi. In addition to Clement’s C-level title change, Dailymotion has started to assemble a team to serve under Saada that includes Chief Creative Officer Virginie Courtieu-Peyraud.

Furthermore, sources claim there’s been a significant amount of friction between the collaboration with Universal Music, which is a part of the Vivendi family but has a stake in music-video platform Vevo. On one hand, VideoInk has been told that there’s resistance on the Universal Music side to shift its business over to Dailymotion, crippling Dailymotion’s competitive edge in the market. On the other, we’ve been told that Universal has been very accommodating but that Dailymotion’s tech and publishing rights aren’t in a position where Universal can safely, or smartly, distribute music on the video platform without financial risk to its artists. Vevo, which still pulls most of its traffic from YouTube, on the other hand, has publishing rights and has the protection of ContentID on YouTube.

Music presents significant opportunity for Dailymotion given the cross-border potential for the content, as well as the chance to compete with YouTube and Spotify, which have both made moves into the video and music streaming space.

“There’s just no faith in the strategy,” one executive who preferred to remain anonymous told VideoInk, but “the budgets are there and there’s a good commmitment from both Universal and Vivendi to make this work,” another said.

But the reality is that Dailymotion, under Vivendi’s guidance, needs to pull the trigger on a big strategy that commits the platform to being either a tech and product solution in the OVP space, alongside Brightcove, JW Player, Zype, and Ooyala, or towards becoming a true content company that produces, distributes and monetizes premium video.

If, and this is a big if, Dailymotion commits the big budgets required to make a splash as a video streaming destination, nails its publishing and music rights tech, then the assets under the Vivendi family paired with Dailymotion’s tentacles spanning nearly every continent could bring the company to a tipping point. Otherwise, the company would be better served shuttering the consumer facing brand and moving hard into the tech space. Dailymotion has tried on multiple occasions to pursue both pathways, seemingly without success.

On the outside looking in, it would appear Dailymotion is a hopeless ticking time bomb, but executives inside the company claim the temperature is much warmer internally than one might expect. According to one exec, the company seems to have “turned a corner, in a good way.”

And so, Dailymotion continues its decade-plus quest to compete with giants like YouTube as the little French engine that could.

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