French YouTube Rival Lands $34 Million Funding

Paris-based video sharing site Dailymotion SA has landed a fresh round of funding to help it compete with U.S. rival YouTube, which has been gaining strength in Europe since it launched local versions of its service in June.

Like YouTube, Dailymotion invites visitors to pick from a huge variety of streaming videos, or to upload their own videos to its site.

On Friday, the company landed an additional US$34 million in venture capital funding to continue its development, a spokeswoman said. The investors are Advent Venture Partners LLP and AGF Private Equity. AGFPE's investments include French online dating service Meetic.com and professional networking site Viadeo.com, a rival to LinkedIn.

Dailymotion took an early lead in tailoring content for different nationalities, offering sites for 14 countries including China, Germany, Japan, Russia and Turkey, but in June YouTube, owned by Google Inc., struck back with its own French-language service, as well as localized sites for other countries.

YouTube's internationalization has hit Dailymotion, according to European audience figures from market researcher Comscore.

Starting at 54.7 million unique visitors in February, the European audience for YouTube's properties rose steadily to 72.2 million in July. Dailymotion's visitor numbers also rose initially, from 11.8 million in February to 16.3 million in May, but then they stalled, declining to 14.7 million in July. German site MyVideo.de also grew, but more slowly, from 9.1 million visitors in February to 10.3 million in June, the same number it attracted in July.

DailyMotion still reaches more viewers in its native France than does YouTube, according to Comscore's figures, but its lead is narrowing. Both companies attracted more viewers overall, to the detriment of smaller players in the market.

The German market, too, is becoming a two-horse race, with YouTube drawing further ahead of MyVideo Broadband SRL. Third-placed Clipfish GmbH & Co. KG now has less than half the audience of MyVideo, according to Comscore, which counts unique visitors aged 15 and over, excluding traffic from public computers and mobile phones.

To attract more visitors, Dailymotion is looking to strike further deals with rights owners like Warner Music, which agreed to allow Dailymotion to host music videos in return for a cut of the revenue.

As part of that strategy, it will begin using a digital fingerprinting technology from Audible Magic Corp. to identify the owners of copyright material. As a video is uploaded, Audible Magic's software calculates a signature unique to that file and compares it to the signatures in a central database of works claimed by the copyright holder. If the signatures match, the software signals the upload as a copyright violation.

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