Sony Pictures Entertainment has stepped onto the online video-sharing territory with the acquisition of Grouper Networks Inc. Sony paid a reported $65 million for the second largest share of user-generated videos after YouTube. The agreement states that Grouper is to retain its managerial independence under the current leadership. "Consumers are spending more and more time on sites like Grouper, and as one of the world's largest creators of entertainment, we want to be where the audiences are," said Michael Lynton, chairman and chief executive of Sony Pictures, part of Sony Corp.

Sony Entertainment has stated that it reserves the right to serve movies and television programs to Grouper's customer network, but that such a move is not part of the immediate company strategy.

"This acquisition demonstrates the breadth of involvement of Sony Corporation in the field of digital online entertainment," said Lynton. "I think user-generated content and the sites around them are businesses or platforms unto themselves in the same way that television networks. There is a big piece of the entertainment/media business this touches."