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Dailymotion buy-out could boost IPTV efforts by Orange

Mobile network Orange has resolved to purchase, by January 2013, 51 percent of the video site Dailymotion it not already own for more than € 72 million, according to media reports.

It should not come as a surprise at all. When Orange got 49 percent of Dailymotion for around € 60 million investment in January 2011, it was described as a "two-part transaction, others to follow shortly."

A full buy-out, press statements said was made with other partners, appears to make sense for Orange, which steadily developing business content to run over its fixed and wireless infrastructure.

In 2005, Orange set a target of achieving € 400 million in "direct pay content" income (music, TV, VOD, games and other) by 2008 - 17 on 22 percent of them from VOD . It runs a big business IPTV in France, one of the world's top IPTV-consuming countries, and simultaneously launched a news portal called 24/24 Actu.

However, in 2010, new CEO Stephane Richard unpicked Orange’s strategy of proprietary content, to its Orange Sports PPV channel IPTV bouquets for alternative broadcasters.

In the same way, Dailymotion ownership will mean ownership of an aggregator which many owners of content have struck distribution arrangements.

Orange’s IPTV Livebox in France carries a Dailymotion app, like some TV sets connected today. The service claimed up to 140 million monthly unique visits, which already has been integrated to the web portal of Orange, using content delivery of Orange’s network (CDN) and its video advertising sales efforts.

But the fully consolidating Dailymotion can let Orange itself inherit range of online content rights, and in a more cost-effective way than by launching its expensive TV channels.

Orange has not launched VOD site, it was reportedly planning to do so in 2009. The fact Dailymotion earns now, after several years of investment required, also likely contributes to Orange decision.

Orange last year closed its 24/24 Actu news portal. But it has an important relationship that offers a subscription service to Deezer music to its customers, so do not rule out a similar position of ownership in the future.

One key date, however, is on the horizon ahead of the rumored Dailymotion buy-out - the site is due in September to hear the outcome of a multi-million euro case in which the broadcaster TF1 sued the company for copyright abuse.

The case is related to the suit filed against YouTube by TF1, which was rejected in May by a French court.