Joost – what went wrong?

6 04 2008

It was heralded as re-inventing the TV paradigm or the end of TV as we know it, yet barely a year after its public launch, online video service Joost appears to be lurching from one crisis into another. The service is planning a major retrenchment, reports the UK’s Sunday Times newspaper, “after failing to attract enough users and top-flight broadcasting rights.”

Joost was the one service guaranteed to get the digerati foaming at the mouth, with the kind of gushing enthusiasm normally reserved for the latest Apple gizmo. The company struck gold early in its history by opportunistically inking a content deal with Viacom – some speculated it was less about Viacom making a serious push into the brave new world of web video and more one-in-the-eye at YouTube, which it is currently suing for alleged copyright infringement.

The online video market has evolved considerably during the last year – most if not all of the big broadcast networks have launched or beefed up their offers: NBC Universal and NewsCorp. have bowed their “YouTube-killer” portal Hulu; the BBC iPlayer eventually made its debut and ‘Project Kangaroo’, the JV between the BBC, ITV and Channel 4 looks set to create a new online video powerhouse later this year.

Meanwhile Joost, requiring users to download and install a desktop application, populated with pedestrian content, is in danger of looking as cutting edge as a parent at a school disco. Moreover, at a time when play now Flash streaming has become the de facto user experience, Joost feels clunky by comparison. True, Apple’s iTunes also requires users to install a desktop app, but it does boast some heavyweights as content partners.

It’s a cruel twist of irony that the ‘revolutionary’ service which looked set to shake up the TV paradigm is in danger of looking so web 1.0 at a time when video is so seamlessly being woven into the fabric of the rest of the web. Joost is retrenching from global markets to focus on the U.S., says The Sunday Times – something it probably should’ve done in the first place.

Moral of the tale #1 is that striking gold very seldom happens more than once in succession – something the entertainent industry understands well. Joost’s founders Niklas Zennström and Janus Friis may have turned the telecoms industry upside down with Skype, but thus far Joost has failed to establish itself as anything more than an over-hyped vanity business.

Moral of the tale #2 is under-estimate the deeply-entrenched business models of media and entertainment incumbents at your peril.

The future for Joost? Renewed focus on the U.S. will likely help the service to leverage its strengths and build a significant niche market. Eventually its founders will tire of it and likely offload it to a media heavyweight. beyondnessofthings predicts Viacom will buy it at fire auction rates.

Update: Joost has rebutted yesterday’s story in The Times, telling paidContents Rafat Ali that it’s not planning any major layoffs, though it is doing a “re-alignment” (not to be interepreted as a sole focus on the U.S. market). beyondnessofthings accepts that Joost may not be refocusing its activity to the extent outlined in the Sunday Times report, but stands by the comments stated above.





The U.K. VOD market – nascent but growing

2 02 2008

Policy wonks, quango officials and broadcast executives met in central London last Thursday to debate the state of the U.K. VOD industry: offering perspectives on incumbent services, those soon to launch, rights management and pending regulatory changes.

Unsurprisingly, the first half dealing with audiences, programming and business models packed them in, while 90 minutes on regulation drove half the audience away, and left the other half in near coma.

Virgin Media’s charismatic Malcolm Wall, CEO of Content, hailed the success of VOD rollout on his platform, proclaiming that “the UK market is coming of age.” The service offers 3,700 of video content, including around 1,000 hours of catch-up TV from broadcasters such as the BBC and Channel 4. Just under half of Virgin customers use the service at least once a month (this compares with around 70% of Comcast subsribers stateside), with around 30% of views to catch-up TV. Some 270 million pieces of content viewed during 2007. His prediction that VOD viewing on the platform would soon outstrip linear viewing of terrestrial channel Five was built on with the further portent that 20% of UK viewing would be non-linear within the next five years. But most striking of all was his disclosure that subscription-based viewing is rapidly replacing pay-per-view.

Both Wall and BBC Future Media Group Controller Erik Huggers used their respective turns to plug the impending launch of a “10 foot” version of BBC iPlayer on the Virgin Media platform, due Q2 2008.

Channel 4’s Sarah Rose, Head of VOD and Channel Development, asserted that partnerships with TV platform partners Virgin, BT Vision and Tiscali TV were “fundamental” and responsible for generating the majority of views to the broadcaster’s 4oD umbrella brand. The biggest mindset change for C4, Rose said was developing approaches for customer relationship management, investing in software functionality and developing new approaches for compliance in an environment where the 9pm watershed is immaterial.

4oD online has an installed base of 1 million users (those who have installed the service software) and unsurprisingly the constituency is 60% male. More striking though was the suggestion that the most active of registered users skews female. Around two-thirds of online users are under 35. No surprises that comedy, drama (about a third of all viewing) and entertainment lead performance, but minority interest programming also does “disproportionately well”. The service is split between around 3,000 hours of (mostly free to view) archive – some of which can “engender loyalty to series” – 60 to 70 hours of new catch-up TV every week and around 300 films.

But there were two star turns at the event: Paddy Barwise, Emeritus Professor of Management and Marketing at the London Business School, and Roger Edmonds, a freelance journalist and one of the key figures behind UKNova, a BitTorrent site which specialises in British TV programmes.

“Calm down dears,” was Paddy Barwise’s opening remark, attempting to balance the boundless enthusiasm of incumbent providers with the reality check that for the overwhelming majority, linear TV rules. Barwise said that while announcements from major players were creating enormous developments on the supply side, but the demand side remained sluggish. Adding: “let’s have a bit of huimility about what will or won’t work, before throwing out too many babies with the bath water.”

John McVay of independent producer trade body Pact chipped in with the challenge that broadcasters may like to consider boosting spend on quality programme-making, before over-investing in technical platforms which were yet to prove themselves with mass audiences.

Roger Edmonds of UKNova threw down the gauntlet to U.K. broadcasters, promising that when they could fully meet the demand for British TV programmes that he sees from his users with a free service, he’d close his site down. With a nod to Project Kangaroo, the soon-to-launch on-demand joint venture between U.K. terrestrial broadcasters, he decried the scarceness of choice from traditional players.

Jeremy Olivier, Head of Convergent Media at regulator Ofcom issued the rallying call which cleared half the room, and devoted his piece to changes ushered in by the European Audiovisual Media Services Directive, which compels member states to move to more robust regulation of the VOD sector, including greater protection from content which may harm or offend vulnerable audiences. Ofcom has pulled together an industry panel to





TV nets face up to growing online competition

25 09 2007

Variety reports on the latest online video forecasts produced by market analysts Screen Digest: the U.K. market for online TV will be worth £181 million (US $362 million) by 2011, but growth of the online movies segment is predicted to be slower.

There’s no doubting that across the Pond, the competitive environment is really gaining traction, as observed by the Financial Times: in the two years since that watershed moment when iTunes first started offering download-to-own TV shows from Disney, all of the major networks have scrambled to not only beef up their own sites, but also to broker those all-important third party syndication deals.

In the last week alone, Walt Disney-owned ABC has agreed a deal to syndicate its shows, for free, via AOL. The net joins CBS, which has been aggressively pursuing its own syndication strategy for the past few months, while Hulu.com, the online video aggregator site JV between NBC Universal and NewsCorp. is due to bow next month.

Hopping back over the Pond to the U.K., the BBC, ITV, Channel Four and five all have online catch-up TV services: the BBC offers the broadest range and volume of hours, while ITV and Channel Four are increasingly bolstering their catch-up offers with back catalogue shows. Satellite broadcaster BSkyB is broadening its Anytime service, with different flavours of the catch-up service available both via broadband and Sky+ DVRs; the company’s recent pact with Sony will also see an extension of the service for Playstation PSPs.

The Screen Digest research referenced at the top of this post acknowledges that established players such as TV networks also face competition from non-traditional market entrants, such as Joost and iTunes. Significantly, it may be players such as Apple and Microsoft, which stand to gain the most if they can finesse their strategies to leverage consumer relationships through ownership of devices, such as iPods, or the world’s most uniquitous operating system.

Four predictions of my own:

  1. The last year or so has merely been about positioning and trying to establish which online video offers work, and which don’t. Note CBS is moving beyond merely offering full-length TV shows online and gradually ramping up 2.0 functionality: conversational content. 2008 will see the space grow up considerably. 
  2. Whether it’s aggregators or TV networks’ own sites, online video offers are principally restricted to ‘walled gardens’ of content, usually from the operating network or a select few content partners. This is wholly alien to the TV viewing experience: consumers don’t watch shows from a single network or producer. The walled garden approach smacks of protectionism and, over the fuller term, it won’t last for all but the smallest handful of players. The creation of Hulu.com is the first acknowledgement by two major players that hybrid partnerships such as thes, which broaden out the available content offer, are the way to go. YouTube is further evidence of a successful broad-brush aggregation model – albeit with some copyright complications.
  3. The market is already overcrowded: come further shocks to the world’s stock markets (an inevitability), watch the venture capital evaporate. Incumbent players looking to second or third round financing, against a backdrop of unproven business models (let alone profit) will shutter or consolidate. Viacom had better be hoping that it can pick up the assets of Joost for a song.
  4. Apple TV and Microsoft Media Center are the first two examples of mainstream PC/TV convergence: but neither has yet created a compelling enough content offer nor low enough price points to give the products a reasonable run at setting the market alight, beyond early adopters. Next gen games consoles from Sony and Microsoft will up the ante by gradually bolstering their IP-delivered VOD offers, but even these may struggle to break through beyond gaming loyalists. Either some boffin will come up with the cheapest and most elegant plug-and-play convergence-enabler – witness what Freeview set-tops did for the U.K. market – or new product categories, such as networked DVD player / recorders or DVRs will hit that magic tipping point of attractive pricing and mainline retail distribution.




BBC iPlayer: first publicly-released uptake stats; 4oD update

3 08 2007

bbc_i_player.jpg

BBC iPlayer launched in beta a week ago today. According to this report, 100,000 users are up-and-running on the service.

paidContent says the BBC puts the number of users so far at 120,000; with a forecast of 500,000 registrations to the service during its first six months. Meanwhile, Channel 4’s 40D service will soon reach 500,000 users, according to The Guardian.

40D has so far recorded 2.5m unique users and 20m downloads of shows since the launch in December 2006.

In a possible hint at the forward roadmap for BBC iPlayer, Jeff Richards, vice president of digital content services at Verisign, which provided the peer-to-peer download technology underlying both the BBC and Channel 4’s services, said: “Over time, the iPlayer could be modified to allow users to embed video.”





ComScore June 07 numbers, U.K.

31 07 2007

ComScore reports that 63% of the 15+ population used the internet during June, with an average of 35 hours per user spent online during the month.

Despite clinging to the prized number 1 to 3 rankings, Google,  Microsoft and eBay all lost a modest amount of reach during the month, while Yahoo! showed growth of just 1%. But the fastest growth of all came from Mozilla, which released an update to its Firefox broswer during June.

Of U.K. broadcasters, Channel 4 put in a strong performance with unique visits climbing 39%, believed to be as a result of online viewing of the latest iteration of Big Brother; the second biggest gain for any U.K. web property for the period reported.