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French telco Orange is considering using video sharing website Dailymotion to launch an over-the-top (OTT) service, according to Daniel Adams, head of international content at Dailymotion.

Speaking to news website Digital TV Europe (here), Mr. Adams said: "For Orange, Dailymotion can be used as an OTT offering to complement their other services and to perhaps distribute some of their premium content. It gives them huge scale straight away.”

Although Dailymotion started life in 2006 as a platform for user-generated videos, it has since diversified into professional content, and has been experimenting with pay models including the soft launch of a transactional-VOD service in France.

Orange paid €58.8mn for a 49% stake in Dailymotion in January 2011, and plans to acquire the remainder at a later date. Dailymotion currently attracts around 120mn unique visitors each month.

Editor's view: Dailymotion appears to have spare capacity: it launched a white label video hosting service called Dailymotion Cloud in October 2010 in order to use up excess bandwidth and existing resources, but so far has not achieved turnover targets for the service.

OTT service launches are becoming increasingly de rigueur for operators of established pay-TV services, as they look to maximise their customer base and work their content harder.

To take just one example, BSkyB's recent announcement that it will launch a new OTT service this year took the market by surprise but makes perfect sense, given the experience it has already gained with the Sky Go service.

The big risk for both Orange and Sky will be cannibalising existing pay-TV customers, but as Sky's spokesperson told us recently - better a customer migrates to a cheaper OTT offering than leaves altogether.

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