Yes, it has, for all online video services.
DivX, a digital media company, announced today it is closing Stage6 by Thursday to focus its resources on the company’s core DivX technology/licensing business. Stage6 members cannot upload any more video to the site and only will be able to access content for three more days.
The reason given for shutting down Stage6 is obvious, something faced by all online video sites. “The continued operation of Stage6 is a very expensive enterprise that requires an enormous amount of attention and resources that we are not in a position to continue to provide,” wrote Tom, an employee of DivX, at the Stage6 blog.
While Tom did not go into detail, we can imagine what these costs are — just the bandwidth and hosting expenses had to be staggering, along with the the additional cost of policing content and avoiding potential lawsuits.
YouTube, the online video leader, is owned by search giant Google and has the scale of use and the financial wherewithal to stay afloat, even with exorbitant bandwidth and hosting costs. But it’s not immune to other costs of doing business in the online video world: Google is still being sued for $2 billion by Universal for copyright infringement.
These costs are sinking almost everybody but YouTube. Brightcove, which operated Brightcove.TV, made a similar decision in November to close its online video service to focus on its successful business-to-business division.
A wild ride indeed.