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AOL Cutting Off Uncut Video Service; More Squeeze On Third-Party Vendors?

This story was written by Rafat Ali.

AOL (NYSE: TWX), as part of its efforts to trim down its non-core and no-revenue generating parts of its portfolio, is closing down the AOL Uncut online user-gen video service, after 2.5 years of trying to compete in the space. The service, started in May 2006, was powered by Videoegg, which has since moved on to become online video advertising network. According to a memo/FAQ to be sent out next week, obtained by Techcrunch, the service will close on Dec 18, and users will have to transfer video off the service before then It is recommending that users transfer videos to Motionbox, the white-label video upload service.

This comes as AOL's video strategy has morphed to focus completely on premium video from its content/media partners (from Hulu and others), and videos that get generated as part of its content site such as Walletpop, and verticals such as AOL Food.

Meanwhile, will this move put additional squeeze on the already-cash strapped online video vendors? As their customers (TV news sites, online portals and others) pare down on non-revenue generating user-gen video, a major source of software licensing revenue could be going away; the other side of the argument is that most sites trying online video in-house will just outsource it to third-party vendors. Some like Brightcove are getting the cream of the outsourced deals, like NYTimes, AOL and Conde Nast. Other smallers one will fall by the wayside.

By Rafat Ali

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