RE:RE:Potential Buyers Oops, slipped on the "post" button.
I don't know if a buyout makes sense, at least from another VOD provider's point of view. Some of them already have some 3D content to some extent (e.g. Vudu); some others have tried it in the past and have given up (e.g. Netflix), and some others have likely decided not to go there at all.
What would they get if they bought 3DGO? I doubt it would make sense for a well-established service to split their product into 2 separate apps or user experiences, so in that context, is there any value to the 3DGO app itself? For example, suppose you are Netflix and buy out SIO for 3DGO; do you offer 2 separate apps (Netflix and "3DGO by Netflix"), or do you integrate 3DGO's 3D content in Netflix? A lot of companies these days tend to consolidate their brands to increase customer recognition and decrease the costs associated with running multiple banners.
So what's left to buy? The content itself... which I'm sure they would have to discuss with the studios first. SIO have their own agreements with studios, but if another provider (e.g. Netflix) steps in and buys them out, would the SIO agreements still stand or would those now be agreements with Netflix? Would the studios and/or Netflix be willing to negociate their regular and 3D agreements separately? Would studios grant the same low-cost deals to a major player as they currently do to SIO? For example, let's say studios have agreed to let SIO show their titles for half the "regular price"; if Netflix steps in, do they still get the SIO special or do they have to pay full price? Would that make sense for them if the number of users remains the same? Best case scenario, the existing SIO agreements stand until renewal a year or two later. So it appears that content wouldn't really be a reason for a buy out, at least not in the long run.
SIO's encoding techniques might have been a factor at some point, but due to the fact that they have adapted their content to be compatible with manufacturers' TVs and not the other way around, I can't really think of an added value to the content they provide over content that can be acquired directly elsewhere.
In other words, other VOD providers don't need to buy out SIO if they want to leverage the 3D market. They basically just need to make their app support 3D (some already do or have done so in the past) and to sign agreements with the studios, and they could easily take SIO out of the equation with their existing brand power. But then, why don't they?
Maybe it's because they're big companies that do a lot of number crunching, and they've come to the conclusion that a 3D offering is just not profitable (as opposed to a one-man business venture of whom the sole purpose is to keep 3D alive against all odds). 3DGO has likely popped on their radar a while ago, but the numbers might have shown that it was better to let SIO do their thing with 3D and just stay out of it.
That being said, I can see two scenarios resulting in a SIO buyout.
1- 3DGO becomes extremely profitable somehow, and a major player (e.g. Netflix) decides to pull the rug out from under SIO's feet; they buy out 3DGO for cheap to basically take them out of the picture, and take control of the 3D VOD market on their own terms.
2- 3DGO becomes extremely profitable somehow, and in a brazen move, a manufacturer buys out SIO in order to get a virtual monopoly on 3D content over their own products. In hindsight, that might prove to be a bad idea, because they would hardly get as many users over a single platform. Moreover, if 3DGO actually became a driving force for 3D TV sales, such a move would basically kill that market for other manufacturers and they'd cut their 3D supply accordingly. I can see how that could eventually make most consumers forget completely about 3D TV, and force the remaining manufacturer to pull the plug as well - so much for that costly buyout...
In all likeliness, I can see either 3DGO and SIO becoming barely cashflow-positive and keep going on indefinitely with a stable SP slightly higher than it is today... or 3DGO failing to take off and SIO being one failed PP away from extinction. Either next Spring or Summer, we'll get a pretty good picture of which one it's going to be.