Orange says the Xbox service will include 30 channels via the Xbox live platform, including its on-demand and premium channels that it offers through its Orange TV service. It will be available initially only in France. Meanwhile, the Dailymotion service will see Orange launching a new, free 3D channel on the Dailymotion platform. That will be available everywhere, although the content is all in French.

The Xbox service will include the ability for those who have Kinect for Xbox to use voice and gesture controls with Orange’s TV service—perhaps the biggest way that this differs from the other ways you can already access Orange TV via set-top boxes, connected TVs and the Internet.

While there have been a lot of 3D services and devices launched in the last year or so, it remains to be seen whether this is a gimmicky add-on that comes and goes, or whether consumers really have the appetite for such products. The Kinect enablement, however, is a keeper: the technology has provided a huge boost for Microsoft in the past year and it’s likely we will see more competing TV services entering the market in the year ahead.

For that reason, Microsoft has been busily ramping up its own Xbox/Kinect TV offerings: not only is it enabling TV services itself, but it is signing up IPTV providers, in addition to Orange, to the service—most notably, Verizon and Microsoft have announced that FiOS will also be on the platform.

Gaming consoles are a good channel for pay-TV providers to keep tapping: a survey from Nielsen yesterday revealed that video is already a very popular use of these consoles. In the U.S., 14 percent of Xbox 360 time, 15 percent of PS3 time and 33 percent of Wii time is being spent on video viewing, watching channels like Hulu, Netflix (NSDQ: NFLX) and ESPN.

And IPTV providers really need all the help they can get: they launched services relatively late compared to other pay-TV products from satellite and cable providers, in addition to all the OTT competition. Pyramid Research forecasts that IPTV will be installed in only one percent of all broadband enabled homes worldwide by 2012.

Of course, the Xbox service will also give Microsoft a boost in marketing its consoles in the French market, where France Telecom (NYSE: FTE) is the IPTV leader and will be selling the console in its stores as part of the deal. It looks like it is the only IPTV provider in the market to team up with Microsoft exclusively for the Xbox/Kinect service, at least for now.

Meanwhile, the Dailymotion channel shows how Orange is also using the OTT route to market its own services, and possibly grow its traffic there as well.

The service includes what looks like a selection of content from the carrier’s existing paid 3D channel—which incidentally is also available via the Xbox service. It includes Mag3D, a 30-minute 3D gadget program, as well as some TV and film content. It will also be featuring user-generated content: Dailymotion users have the option of designating their videos as 3D for them to appear in the channel.

As this line-up is designated as “for launch”, there is a chance we’ll see Orange launching more, and possibly paid, services on the channel. It already notes that it will have a mobile version of the service available by February 2012.

Orange, which is a 49-percent owner of Dailymotion, has used the investment to further its business reach online before, including an advertising deal announced earlier this year.

Related

• A Tale Of Two Strategies: Home And Away With Orange And Vodafone
• Orange Duets With Spotify Competitor Deezer On New UK Mobile Music Service
• Microsoft Shifts Strategies To Expand Xbox Live TV, Go Global
• Orange Links Up With Dailymotion For Ads, Seeks The Next Don Draper
• Orange Bets Big On Video, Buys 49Pct Of 'French YouTube' Dailymotion

Vodafone yesterday reported results that indicated that data revenue is still growing strong, rising by 23.8 percent to £3.1 billion across the group. Data now accounts for 14 percent of the group’s service revenue. Similarly smartphones are going gangbusters: in Europe they now account for 21.7 percent of all mobiles on Vodafone networks. Vodafone notes that 58.7 percent of those smartphone users take data allowances with their devices. And in Germany the company has picked up 50,000 LTE customers since launching the service in September.

But in terms overall revenues, which take into account the declines in voice revenues, growth in Europe has slowed right down, with service revenues for the region actually declining by 1.3 percent for the first half of the year.

European countries where Vodafone’s operations have been hit the worst are those being slammed in the current economic crisis: Spain’s service revenues were down by 9.6 percent, while Italy’s were down 2.3 percent. Greece’s revenues are not broken out in Vodafone’s balance sheet (they are listed under “others”) although the company did admit to taking a £450 million ($725 million) charge for that operation.

Not so though in emerging markets, which Vodafone points out are in many seeing higher GDP growth than their European counterparts. Revenues in India were up by 18.4 percent; South Africa’s Vodacom was up 7.3 percent and Turkey up 27.9 percent.

“Vodafone is becoming a little more an emerging market company and a little bit less a European company,” CEO Vittorio Colao said during Vodafone’s earnings presentation (via Guardian).

Overall the company reported revenues up 4.1 percent to £23.5 billion ($37.8 billion), with pretax profits up 2.3 percent rise to £7.5 billion ($12 billion), and increased its dividend payment to shareholders by seven percent: it will pay out £4.7 billion in ordinary dividends this financial year, and an additional £2 billion in January, partly fuelled by earnings at Verizon, which will be paying out a dividend to 45 percent owner Vodafone for the first time in six years.

Vodafone’s focus on and benefits from fast-growing markets outside of Europe is in contrast to some of the recent investments announced by France Telecom/Orange, which appears to be looking to developing new services closer to home as a way of expanding its business, with the start of a VC fund with Publicis and an investment in a French social media company.

Of course, Orange too has extensive holdings outside of Europe, with operations in Africa, the Middle East and Asia, but in the last few days it has proven that it is also focusing on growing revenues at home with a series of new media investments.

Orange has paid €14 million ($19 million) to take a 34.15 percent minority interest in Cascadia, a newly-formed company that holds the web operations for Skyrock, a French radio station targeting 12-24 year-olds.

The deal does not signal a move into traditional radio for Orange; it’s for Orange to get more exposure to young people through new media services, and enhance the services it offers to its existing subscribers—a strategy it has already been investing in with its stakes in streaming music provider Deezer and online video company Dailymotion.

The web operations mainly consist of a blog platform on Skyrock.com, which Orange says is the leading blog platform in France with over one billion page views per month covering some 33 million active blogs. But the company also runs an instant messaging service and is now exploring “future geo-localized and group messaging services for mobile users.”

Orange is looking to leverage the investment with its other holdings from the word go. Skyrock.com and Dailymotion will promote each other regularly, and Orange’s R&D and design teams will work with those of Skyrock.com on new services. Skyrock will also help sell advertising for both Deezer and Liveradio—which, if successful, might prove to be a most direct impact of all on the revenues of these other ventures.

That is not the only investment that Orange has committed to in the last few days: it is also teaming up with the advertising giant Publicis to start a VC fund that the two say digital technology startups.

Among the “likely sectors” are marketing, e-commerce, mobile content and services, online gaming and social networks; as well as related technologies and infrastructures such as middleware, cloud computing, security, and online payments.

The two are jointly putting in €150 million ($208 million) and are looking for more investors to bring the total up to €300 million. The amount invested in each project will vary depending on the stage of funding although the two say that a typical amount for a late-stage investment might be €15 million ($20.8 million).

Which route is likely to yield better returns for the two carriers: more investment abroad or drilling down at home? It will be interesting to see which approach proves the more successful.

Related

• France Telecom, Everything Everywhere See Revenues Decline
• Deezer Signing Deals To Launch In 130 More Countries
• Orange Duets With Spotify Competitor Deezer On New UK Mobile Music Service
• Orange Links Up With Dailymotion For Ads, Seeks The Next Don Draper
• Vodafone Looks West For Mobile Ideas, Opens R&D Center In Silicon Valley

The announcement follows on from last week’s news that Deezer would be extending its service to the UK, headed up by new MD Mark Foster, who has had a long career in the music industry, with executive positions at Warner Music and other labels.

According to the release from Orange, Orange will be the exclusive partner for Deezer Mobile, a service that gives users unlimited access to the whole of the Deezer catalog of 13 million tracks on their phones.

Orange will be using the service as an incentive to would-be customers: those who sign up for Deezer independently will need to pay $9.99 per month to access music tracks, albums, radio channels, recommendations and supplementary content. But those who sign up for Orange’s Pay Monthly “Panther” tariffs—price: between £25 and £80 per month on a 24-month contract—will get a mobile-only version of the service bundled into those phone deals. It’s not clear whether T-Mobile, as Orange’s partner in Everything Everywhere, will have access to offering the service as well.

As it does in France, Deezer will also offer its radio station service—where a user cannot choose which specific tracks are included—free of charge.

Will this deal bring in the masses? We have seen a number of partnerships between mobile operators and streaming music companies—Music Station was an early mover with deals with Vodafone (NYSE: VOD) and others (and has more recently moved into a music streaming service with RIM (NSDQ: RIMM) on the BBM social network); and Spotify works with 3UK, Telia and Virgin Media (NSDQ: VMED)—but it’s unclear whether any of these have hit the high notes everyone was expecting.

But given the current buzz around cloud-based media services and the growing ubiquity of smartphones, we are likely to see more partnerships anyway.

This is not the first time that Orange and Deezer have worked together. In 2010, Orange took a minority stake in the company and the two have been offering a music service since August 2010 in France. While the two have not revealed how many subscribers they have today, the partnership picked up 500,000 in the first six months of operation—a number that is likely to have grown, as the service is bundled into Orange’s broadband and mobile content offerings in France, where it is the most dominant player on both platforms.

Deezer says that overall it has a total of 20 million subscribers worldwide, with services not only across France, but also Germany, Italy and Spain. Of that 20 million, there are 1.2 million taking premium packages. The rest listen using the Deezer’s free radio stations.

Related

• Deezer Streaming Music Service Launching In UK
• Orange Bets Big On Video, Buys 49Pct Of 'French YouTube' Dailymotion
• French Music Streamer Deezer Adding Premium Options, Mobile Streaming
• French Music Streamer Deezer Raises €6.5 Million Second Round

To be clear, a spokesperson for Orange says that its deal with Dailymotion is not directly because of its investment in the company: it benchmarked Orange in each market before signing the deal, it says.

The ad partnership, which Orange says is exclusive to it, will use the Orange Advertising Network to serve local ads in the markets of France (mobile-only), all of Latin America except Brazil (web-only), Poland (web and mobile), Spain (web and mobile), and the UK (web and mobile). These are live already, and apps for the markets, starting with an iOS app, will be coming out in the next few weeks, says a spokesperson from Orange.

Further markets will be announced on a country-by-country basis, she adds. The different platforms, she ads, are due to the fact that Dailymotion already operates its own advertising services in certain cases. The service is also being marketed in the U.S., although that market is not exclusive to Orange.

Samsung has been confirmed as one of the launch brands.

Worldwide, Dailymotion says it has around 1.2 billion views of its videos per month, from 114 million unique visitors, with 20,000 new pieces of content added every day to an inventory that is already over 20 million videos. The deal will give the video site the ability to consolidate at least some of their markets under one advertising supplier.

One curious aspect of the partnership is how it will integrate user-generated content into the online advertising game. Advertisers will have the ability to create their own bespoke ad campaigns—by reaching out to the “Motionmakers,” the videomaking community that Dailymotion has amassed, and getting them to create content based on those advertisers’ briefs.

While brands have run campaigns in the past as contests, seeking the best user-generated video content to promote its goods, with the hope of it going viral—this is perhaps the first time I’ve seen this model made into an actual, formalized service. Other formats that will be sold include more traditional placements like banners and home-page takeovers.

While Dailymotion, like its bigger rival YouTube (NSDQ: GOOG), thrives on user-generated content to stock its inventory, it has also (like YouTube) been building up a catalogue of premium content as well in different local markets where it already has a strong audience. Some of its partners in the geographies covered by this deal include ITN in the UK, TV Azteca in Latin America, and TV3 in Spain, it says.

Financial terms of the partnership were not disclosed.

Related

• Orange Bets Big On Video, Buys 49Pct Of 'French YouTube' Dailymotion
• The Filter Takes On More Funding For Content Recommendation
• Orange, T-Mobile JV Losing Customers; France Tel Says 2011 Outlook Stable

Overall, Everything Everywhere lost 191,000 customers in Q4 2010 compared to the same quarter a year ago. Within that figure, it gained 974,000 contract customers (which tend to be higher value and more loyal in the longer term), but lost over one million prepay customers in the process. It also lost 126,000 customers in its small broadband operation, bring the current total to 770,000 subscribers.

Smartphones are on the rise at the operator. They now account for 82 percent of all contract-based connections, a huge increase on the 50 percent figure for same quarter a year ago.

Everything Everywhere was the first operator to launch subsidised iPads in the UK, bundling a reduced-price tablet with two-year data subscriptions. The offer was launched just before the holiday shopping season, and the company expected huge take up, but this reportedly never materialized. The company did not reveal any sales figures in the current results.

Yet while the rest of France Telecom (NYSE: FTE) and the rest of the mobile world is seeing a boom in mobile data use, Everything Everywhere’s operation says that non-voice percent of ARPUs actually declined slightly, down 0.3 percent to 26.2 percent.

Overall, France Telecom’s revenues were up by about 1.5 percent to €45.5 billion ($62.7 billion). Net income was €4.9 billion ($6.7 billion) in 2010, an increase of 28 percent.

In its home market, France Telecom says that mobile data represented 31 percent of total mobile revenues in 2010, versus to 26.4 percent in 2009. That was partly driven by the huge boost in smartphone and dongle usage on the network. The number of 3G broadband customers was up by a massive 23.5 percent compared to 2009, to 9.4 billion.

It said that revenues in France were up by 0.8 percent for the year, with mobile services, data services and handset sales driving growth. But it also faced tough competition which resulted in lowered prices and reduced margins, down by 1.6 percent to 37.8 percent for the year (with a company-wide margin decline of 0.9 percent to 34.4 percent.) The company currently has a 36 percent share of the France’s broadband market and a 46.6 percent share of its mobile market.

But price competition doesn’t look like it will go away any time soon, so France Telecom is also trying to take a different approach by focussing on services over the network to boost revenues longer term. The company has been offering music bundles with Deezer, and plans to do the same with video bundles from Dailymotion—it took an $80 million, 49 percent stake in Dailymotion last month and also has a minority stake in Deezer.

Related

• Orange Bets Big On Video, Buys 49Pct Of 'French YouTube' Dailymotion
• T-Mobile, Orange Spin Global Tech Co-Op Out Of UK Merger

Orange says the deal will help it extend its role as a multiplatform content aggregator and distributor, a strategy that has been pushed particularly hard by CEO Stephane Richard since he took the reigns last year.

Dailymotion is Orange’s biggest online content M&A play to date, but it’s not the first. In July 2010, Orange took a minority stake in the music streaming site Deezer, and together they kicked off a co-branded music subscription service that was bundled with Orange’s broadband tariffs in France. That’s gone pretty well so far, picking up 500,000 subscribers since launching in August 2010.

We can expect to see similar services coming out of the Dailymotion deal, too. Orange had been working with Dailymotion prior to this: users of Orange’s IPTV service in France were able to access the site via Orange’s set-top box. Now the idea likely will be to bundle cloud-based premium content, delivered via Dailymotion, with subscriptions as well, which users could access on different devices, from PCs and TVs to mobile handsets and tablets.

The big difference will be market focus: Deezer is focussed on France, and that’s where Orange has sold the Deezer bundles. Dailymotion, meanwhile, gets 80 percent of its traffic from outside France. That means Orange can leverage Dailymotion’s platform to extend its offerings to other markets where it has a footprint, in particular its extensive mobile operation.

The other significant issue is that, while Dailymotion says it is the world’s second-largest online video company after YouTube (NSDQ: GOOG), that is a very distant second place. (Dailymotion averages 90 million unique monthly users these days, according to Peter Baines, a partner at Dailymotion investor Advent Venture Partners.

But YouTube, according to comScore’s rankings released last week, got nearly 145 million uniques in the U.S. alone in December.) A deal with a telco gives Dailymotion another distribution channel, and potentially a new revenue stream as well.

Currently, Dailymotion brings in around $25 million annually in sales, mainly from advertising. Baines notes that this is a four-fold increase since Advent first invested in the company a few years ago.

For Orange, the international expansion angle is key. The company has a big mobile footprint, and it has long been looking for a way to extend that into converged, multiplatform services. Most of that hasn’t gotten very far (it only offers IPTV in one other market besides France, Poland; and the long-awaited Orange TV services still haven’t come to the UK). A Dailymotion-led, cloud-based offering gives Orange another chance to tackle the international market.

“Orange is aware of its internal challenges and determined not to repeat the same mistakes when tackling the international market,” says one source close to the situation.

Baines at Advent confirms the idea of an international emphasis. “The intention is to carry on growing the international operations,” he told paidContent. “That’s where the investment will go, to scale internationally.”

Why is the deal not closing yet? A spokesperson for Orange says that there is still some due diligence to be carried out, and there are still some negotiations underway around “who is selling what percentage of their capital.” There are at least three investors in play here: Dailymotion counts Partech International and Advent Venture Partners among its bigger shareholders; and France Telecom (NYSE: FTE) and Orange also have one shareholder in common: France’s sovereign fund, FSI, has a 14 percent stake in France Telecom, and in October 2009 it invested €7.5 million in Dailymotion as well.

“But all the shareholders have been involved and we’re all moving in the same direction,” he added.

Cédric Tournay, Dailymotion’s CEO, and the rest of the management team are expected to remain with the company after the deal.

Today, the Peter Gabriel-backed company tells us that one of them is Dailymotion, the France-based online video site. And we can report that the second deal, which will be announced in the next couple of weeks, is with a U.S.-based online video site of a similar size to Dailymotion.

The Dailymotion agreement is a big boost for The Filter. World-wide, the video site has about 66 million monthly visitors, which takes up the number of people using The Filter’s engine up to 86 million every month.

The agreement, which will see The Filter powering recommendations for videos on the site, underscores the push from online video companies to increase users’ “dwell time”, a metric that can then be used to sell against higher ad rates. The move into working with online video companies is an emerging area for The Filter: up to now some of its biggest customers have been music-based services.

The Filter also looks like it is also gearing up to do more in the U.S.: the U.S. customer win with an online video provider, which was confirmed to us by a spokesperson for the company, will come on the heels of its appointment of Doug Merrill, the former CIO of Google (NSDQ: GOOG), to its board of directors in May.

Financial terms of the agreement with Dailymotion were not disclosed. Currently The Filter says it processes some 1 billion API calls per month from all of its white-label customers.

Other companies that The Filter works with include the Music Entertainment division of Sony (NYSE: SNE) (it powers recommendations on MyPlay); online video rental site DVDPost; ThePlatform and Evolver.net, along with We7, the Gabriel-backed music site. The Filter also says it “collaborates” with Nokia (NYSE: NOK), presumably on Nokia Music, although a spokesperson would not confirm this directly.

Related

• Recommendation Site The Filter Adds Ex-Googler Merrill On The White-Label Trail

—Dailymotion: David Ripert has been promoted to the role of director, global content partnerships for Dailymotion, to be based in New York. He had been the online video site’s senior manager for content and partnerships in Paris. (Via Cynopsis)

—Samsung: Will Lever is the new European brand director for Samsung Electronics Europe. He comes from a marketing role at Best Buy, and has also held senior marketing roles at Carphone Warehouse, Apple (NSDQ: AAPL) UK and O2. (Via mad.co.uk.)

—Unanimis: The Orange-owned ad agency is expanding its mobile sales team. It has appointed Alex Rahaman as director of mobile and added four more executives to the group. Rahaman was previously the company’s operations and finance director. (via NMA.)

—Time (NYSE: TWX) Out app: While Dailymotion does freemium, the London guide’s new app for entertainment listings, restaurants etc comes sponsored by Smirnoff. Via Guardian.co.uk.

—Directgov: The UK central govt website has released a free travel news iPhone app and is paying Kelly Brook and others to market it as “the nation’s official website” (via Mad.co.uk) - just as paidContent:UK hears rumblings that other government departments want to bring down Directgov.

Now Digby’s resurfacing at the new online content operation started by ex Bebo chief Joanna Shields and Shine Group CEO Elisabeth Murdoch.

He confirmed the move to C21. He will be director of content and digital development.

At Dailymotion, Lewis had struck content deals including one to get an exclusive window on The Hunt For Golum, a Lord Of The Rings spinoff.

Shields had led Bebo to commission original video drama for the social network. Shine Group‘s production companies make Spooks, Ashes To Ashes, The Wright Stuff and more.

Here’s my June video interview with Lewis...

Related

• Former Bebo Exec Shields Partnering On Content Company With Shine's Murdoch
• Dailymotion Confirms €17 Million VC Round
• Video Interview: Digby Lewis, UK Creative Director, Dailymotion

—Brightcove: London-based video-technology platform Brightcove is now being used on Sky Deutschland’s Sky.de as part of a new deal that will see its sports content streamed online. Some content, such as Bundesliga football highlights, will be available to non-subscribers too. Rupert Murdoch’s News Corp (NYSE: NWS) owns about 40 percent of the German broadcaster.

—Blinkbox: UK video player Blinkbox has signed a deal with the British Film Institute to shows its catalogue of films. The ad-funded deal covers 37 feature films and means Blinkbox now has more than 500 British films and 6,000 in total.

—Dailymotion: The french video site has signed a deal to add 5,000 music videos licensed by indie digital music distributor The Orchard.

The site has 60 million unique users, is translated into 20 languages and is the leader in its domestic market. But Tournay admits the company can’t just be successful in “one domestic market—we need to be global”. And he hopes US success could translate into carriage deals and greater success in key markets such as the UK.

—American dream: According to Comscore (NSDQ: SCOR) Dailymotion has about 10 million monthly users Stateside, but for Tournay that’s not nearly enough. “For our US strategy, we need to invest in the technology, the platform, the staff and the content acquisitions,” he says. So having led cost cuts across the company of about 10 percent since joining in July, Tournay now wants to hire five or six US based staff at first—more may be added later—to add to its 15-strong New York-based team.

— IPTV: The site is already available on some web TV platforms and, in France, via digital terrestrial TV and ISPs. But Tournay has now set his sights on 30 percent of all DM views coming from TV in the next two to three years. “It’s a tremendous change for our business,” says Tournay. “We’re seeing an increasing audience through TV, it’s a more simple experience, it’s more intuitive, its fast and people like it.”  Without naming anyone, Tournay confirms negotiations are on-going with IPTV providers in the US and Europe.

—iPhone app: The company will launch two iPhone apps within the next two weeks: one will be free and ad-supported while the other is available for a one-time fee, will have no ads and gives users “premimum services”. No word on the price—talks are on-going with Apple (NSDQ: AAPL) on that front. “This is a good market. Mobile advertising is moving very fast, so we hope this will be a profitable activity for us.”

—London calling: Tournay admits that the company is “too weak, too small” in the UK and he would like to bolster the company’s London operation with more staff and resources—and hopefully one or more IPTV carriage deals. But he says the key to cracking the “very tough” UK market is to find one large distribution partner and be successful in America first: “We tend to believe that to be strong in the UK you need to be strong in the US—you need a very, very strong English language catalogue and a global brand.” UK country manager Digby Lewis left the company this month—no word so far on his replacement.

—Business model defence: But can any of this actually work? Just months ago the business was scaling back because of high costs. “Our conviction is that we have shown that our business model is a good one, contrary to what people have thought,” says Tournay. “People believe that because of our distribution costs,  bandwidth costs and storage and so on, it would be impossible to break even—but that’s not right, our costs are decreasing quite fast.” The new money will support the international expansion, but Tournay stresses that as the business gets bigger, the costs of serving video “get cheaper and cheaper”.

Related

• Corrected: Dailymotion Confirms €17 Million VC Round
• Industry Moves: Dailymotion Taps Cedric Tournay As New CEO
• Updated: Dailymotion Raises Another €15 Million As Costs Prove Challenging

Original: Exactly two weeks after raising €15 million ($25.5 million) in VC funds, French video site Dailymotion on Thursday confirmed it raised a VC round earlier this month worth €17 million ($25.5 million). Existing investors Advent Venture Partners, AGF PE, Partech International and Atlas Ventures all took part and €7.5 million is contributed by Fonds Strategique d’investissement (FSI), which is 49 percent owned by the French state and now joins the Dailymotion board.

According to its release (pdf, in French), FSI invested partly because the business is “on the threshold of profitability”. The site has attracts 60 million unique monthly users and has raised more than $90 million since 2006. What’s the money going to be spent on? Dailymotion says in the release it fund the movement into new areas such as mobile and IPTV  Dailymotion has not responded to our request for comment so far.

Atlas Ventures’ Fred Destin confirms the round on his blog, adding that Atlas grows its stake in the business as a result. “As for most video-sharing sites it’s been a rollercoaster four years of hypergrowth, legal woes, scaling challenges peppered with some great moments of exhilaration,” he writes. “The segment remains challenging, not least because your main competitor is…Google (NSDQ: GOOG) and its monstrously successful video acquisition.” 

Destin says he’s not “declaring victory yet” and admits the site is “fallen behind in some areas” such as search and the MotionMaker UGC programme, which is “due an upgrade. But nevertheless he says DM is sustainable and he’s happy to back it. For him the real challenge (and he’s not kidding) is proving that the business is worth half a billion: “Clearly we are not there yet!”

It’s quite a turnaround in growth strategy: one year ago former CEO Mark Zaleski told us that the site didn’t need any new money—yet since then it’s further cemented its position as one of the most heavily VC-funded content business in Europe.

Update: It appears the cost-cutting drive DM CEO Cedric Tournay has implemented is not entirely over: the company confirmed to us that UK country manager Digby Lewis has left the company as part of a drive to cut costs by 20 percent.

His own MotionMaker page describes him as: “Former Dailymotion UK Country Manager. Now running a digital media consultancy business.” According to his LinkedIn page, he’s been head of digital at the Universal Music JV Alltheworlds, which runs events including F1 Rocks.

Related

• Europe Round-Up: Russia's Microsoft Probe; Dailymotion Stats; Deutsche Telekom IPTV; Fremantle CEO
• Industry Moves: Dailymotion Taps Cedric Tournay As New CEO
• Video Interview: Digby Lewis, UK Creative Director, Dailymotion
• Updated: Dailymotion Raises Another €15 Million As Costs Prove Challenging

Twelve months ago, then CEO Mark Zaleski told me the site didn’t need further funds, but the last year has seen the board swap Zaleski for Cedric Tournay, who promptly shaved 20 percent of Dailymotion’s costs, partly through layoffs.

Dailymotion had taken $9.5 million in setup money from Atlas Venture and Partech International in 2006 plus a further $34 million from Advent Venture Partners and AGF Private Equity a year later. Tournay tells Capital.fr the new money, which comes from original investors and one new backer, “strengthens our balance sheet and allows us to fund our growth”.

He forecasts 50 percent better revenue this year and next, and says the company is profitable at the operating level. But bandwidth costs are still rising faster than turnover. Sales are now outstripping outgoings on bandwidth, which makes up 25 percent of costs, Tournay said.

“At the moment, we are poor at monetising our audience,” Tournay says. “Dailymotion started its business strategy there only two years ago. The consequence: less than 10 percent of our videos include advertising.”

The site, claims 60 million monthly uniques, is a firm fixture in its native France but has been trying to make a name for itself in overseas markets, too. It has tried to set itself apart from the user-generated content sites with a mix of professional content like independent film - but neither is it the only site trying to do that.

Related

• Confirmed: Dailymotion Replacing CEO Zaleski With Brotherston
• @ Mipcom Interview: Mark Zaleski, CEO, Dailymotion: An Investment For A Broadcaster?

—Dailymotion: Fresh from swapping its CEO, the French video site has got a slim, one-week exclusive window on Lord Of The Rings fans’ self-produced upcoming film The Hunt For Gollum. The flick is premiered simultaneously with the 8th Annual London International Festival of Science Fiction and Fantastic Film on May 3, 4pm. It’s only a fan flick, and hardly a Hollywood premiere, but Dailymotion hopes it can tap in to the, let’s say, loyal Rings fanbase.

—Perform: Sports rights distributor Perform’s sales division has been appointed to sell online display and video advertising for the Sony (NYSE: SNE) Ericsson (NSDQ: ERIC) Women’s Tennis Association Tour’s website. The site hopes to get 730,000 unique users a month during the tour and is looking to Perform to sign sponsorship deals as well as sell video ads. Perform was also hired to to redevelop Sonyericssonwtatour.com and launch its mobile site. Perform now provides video support and commercial services to more than 200 websites. From Mediaweek.

—Orange 3DTV: BSkyB (NYSE: BSY) has dabbled with 3DTV trials in the UK, and now French telco Orange is hosting a live 3D broadcast of a top fligh Ligue 1 football match between Olympique Lyonnaise and Paris Saint-Germain. Fans are being invited by Orange and the two clubs to watch on big screens outside the teams’ stadiums, in association with the league and broadcaster HBS. Via Advancedtelevision.com.

A statement from the board says Zaleski “has resigned from his position with the company as CEO to pursue other opportunities and spend more time on his other investments”. Brotherston will be based in Dailymotion’s Paris office has already updated his LinkedIn profile, which shows he also has had director roles at easyJet and Severn Trent. The statement did not say Zaleski would stay on as non-executive chairman, as first reported, nor that it was looking to raise more money.

Three of Dailymotion’s VC backers use the statement to laud Zaleski. Lead investor Partech’s Philippe Collombe: “Mark has driven the many phases of our development, including taking the lead in the industry in anti-piracy protection by being the only video-sharing site to use two different content filters.” Advent’s Peter Baines says user numbers have grown 50 percent in the last five months. AGF’s Benoist Grossmann, somewhat generally, says Brotherston’s role “will be to lead Dailymotion in its next phase of development” - but there’s no detail on what that next phase will be.

Dailymotion rejects the “French YouTube” tag; it has rolled out in non-French territories, points to its editorialised channel sections as a differentiator from skateboarding-dog UGC sites and has tried to cosy to independent film and documentary makers - but so have other platforms like Babelgum. Dailymotion previously raised a €7 million first round from Atlas and Partech, then another €25 from those plus Advent and AGF

Zaleski, also chairman, will remain non-executive chairman and will lead international ops while Ian Brotherston, formerly of BT (NYSE: BT) and AOL (NYSE: TWX), will come in as new CEO, Stratégies newsletter reported, putting Dailymotion’s 2008 revenue at €12.5 million, which isn’t disastrous. Le Journal du Net last week foretold the switcharound, saying the site plans to raise more money this year, as video sites generally find making money tough-going. No word on any of that yet from the company.

Related

• Industry Moves: Raindance Film Festival Producer Joins Dailymotion
• @ Mipcom Interview: Mark Zaleski, CEO, Dailymotion: An Investment For A Broadcaster?
• Dailymotion Goes More Legit With French Video Owners

The move is interesting in light of earlier speculation Hulu would opt for a European tie-up with the now-aborted Kangaroo service. But this is now a far cry from Hulu’s latest strategy, which last month pulled syndicated videos from third-party services TV.com and Boxee. And it’s hard to see what, beyond discoverability, Hulu will get from the arrangement; the Hulu user experience is much slicker than Dailymotion’s. It’s more of a win for Dailymotion, which just swelled its library of professional videos in one fell swoop. Release.

Dailymotion is trying to position itself apart from UGC counterparts like YouTube by offering a greater degree of professionally produced material through curated channels. But YouTube is already going great guns with its broadcaster partner programme. Dailymotion, like Babelgum, has recently been courting the independent film circuit.

Related

• Hulu Hopes To Enter UK; Held Up By Kangaroo's Troubles
• @ Mipcom Interview: Mark Zaleski, CEO, Dailymotion: An Investment For A Broadcaster?

(photo: by Andreas Tovin)