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.





Really Simple gets really enterprising

25 01 2008

The Open Television Network (OTN) launched Wednesday, democratising distribution for content owners seeking a broader audience and more choice for end users who find pre-eminent aggregators too driven by the Pareto principle.

The service is based on RSS feeds: an end user subscribes to a feed based on a subject, topic or provider of interest. This serves up lists of available content, then each time the user clicks on an item to download it, using a popular client like iTunes or Miro, their OTN account gets debited.

Any content producer can upload material, from which OTN takes a 15% commission per use.





Burns bypasses theatrical for latest release

26 10 2007

A rallying call to independent film makers all over the world: Emmy award-winning writer Ed Burns has shunned theatrical distribution for the premiere of his latest comedy drama Purple Violets, in favour of exclusive availability on iTunes, reports Variety.

“The specialized movie business has changed so dramatically in the last five years,” Burns said. “My style of filmmaking is dying on the vine. These small, talky movies have a hard time finding an audience theatrically, so you need to adapt.  There are still people who want to see this nontraditional type of film, and now there are nontraditional ways to get them out there.”





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.




NewsCorp.: TV shows to stay on iTunes

12 09 2007

Following last month’s decision by NBC Universal to end supplying iTunes with download-to-own TV shows, speculation had grown over the future of other contracts coming up for renewal.

NewsCorp. prez Peter Chernin yesterday confirmed that the company has no plans to take its shows off iTunes, but has called on Apple to be more flexible about its approach to pricing.

“Right now we have a perfectly good relationship with Apple,” Chernin told Reuters. “But let me say this, we’re the ones who should determine what the fair price for our product is, not Apple.”





Apple to halve cost of iTunes TV downloads; supplier rebellion brewing?

7 09 2007

Apple is planning to cut the cost of TV downloads via its iTunes service from US $1.99 to just 99 cents, reports Variety.

The move would create a single price point for both audio and TV downloads, which Apple believes will drive consumption for the latter category, which remains completely dwarfed by equivalent music track downloads. Given Apple’s success in dominating the digital downloads sector, any changes to pricing could prove an adrenalin shot to sales of TV downloads.

It’s reported that pricing for movie downloads will likely remain unchanged and there hasn’t been any comment on price points for the recently-launched TV downloads offer via the iTunes U.K storefront, where shows sell for double the existing equivalent price across the Pond.

Reuters builds on Variety‘s coverage, suggesting that other TV networks may be emboldened by NBCU’s move, with a Gartner analyst even speculating that video content may all but disappear from the iTunes service.

News Corp., Time Warner, Viacom and Walt Disney Co. all have contracts with iTunes. One of them is due to expire by the end of this year, and another by next year, according to industry sources, the report adds.

In related news, Apple and partner record labels are to go before the European Commission on 19 and 20 September, to defend accusations of price-fixing across the Eurozone.





A week in online TV & video: wrap-up

4 09 2007

U.K. indie producer and Guardian columnist Anthony Lilley provides an excellent contextual wrap-up of the week’s key developments in the online video space, including:

  • The arrival of iTunes video downloads in the UK;
  • NBCU’s non-renewal of its video deal with iTunes;
  • South Park creators Trey Parker and Matt Stone’s online syndication deal with Viacom — a watershed moment for the producers of the most sought after content;
  • Google’s deal with music collecting societies the MCPS and PRS.




NFL seizes back control of its online video destiny

3 09 2007

The U.S. National Football League (NFL) has regained direct control over some of the most valuable online video out there by hosting material on its own site, ending a seven-year partnership with CBS Sportsline.

The NFL’s new approach gives it more say over the context in which its material is presented, as well as leverage when it comes to setting advertising rate cards. The move also rekindles the debate over whether walled gardens limited to the content of a single provider, or syndication via broader aggregators will win the day.

For certain genres of content — sport and new release movies as examples — restricted availability via a single destination will likely continue to work. But for everything else, TV shows included, it’s an approach which flies in the face of one of the most established consumer beahviours: the way in which they watch TV and that this is never limited to a single channel or network.

It’s the latter approach which informs emerging plays from the likes of Joost and Babelgum, with one current downside, neither has yet to sign up a breadth of content providers which make either service a destination in their own right.

Hulu.com, the soon-to-launch online TV portal JV between NewsCorp. and NBC Universal (NBCU), promises to redress the balance, and even now it’s clear that at least one of the partners is re-thinking its distribution relationships with third parties, such as last week’s revelation that NBCU is to end its deal with iTunes. 





NBCU blows out iTunes TV downloads deal

31 08 2007

NBC Universal, the biggest supplier of TV shows to iTunes, will not be renewing its two-year deal offering downloads via Apple’s digital entertainment storefront when it comes to an end in December, The New York Times reports. In a tit-for-tat response, Apple then announced that it would cease offering NBC TV shows from September.

While both companies declined to discuss the exact reasons behind the decision, it’s believed that NBCU had grown increasingly uncomfortable with Apple’s rigid pricing model, which offers just two price points for download-to-own video titles: US $1.99 for TV shows and $9.99 for movies.

NBCU’s 1,500-hour catalogue accounts for as much as 40% of TV show downloads via iTunes, including titles such as The Office and Heroes which play particularly well to online audiences.

Proving that Apple is mostly expert when it comes to managing ‘bad’ news (something TiVo also excels at), its revelation that a new generation iPod is on the way more than offset the blow, sending its shares up 6% on a day’s trading.

In related news, NBC Digital Entertainment yesterday announced that it will stream free episodes of Late Night With Conan O’Brien, when the series returns for its new season on 13 September.





iTunes TV downloads launch in the U.K.

29 08 2007

Apple iTunes users in the U.K. are now able to access a range of download-to-own TV shows licensed from ABC/Disney and Viacom at £1.89 a pop (double the equivalent of the U.S.), the first time the service has been extended outside the U.S since it created a watershed moment for online video in late 2005.

The initial content offer is pretty thin at just 28 U.S. series, many of which in the case of ABC-licensed content have already been offered on Channel 4’s 4oD service, albeit at higher rates. The lack of any U.K.-produced titles could be perceived as a tad culturally imperialist – not to mention a lack of riches.

In the U.S. iTunes users have been downloading an average of one million TV episodes each week (50 million have been downloaded to date); meanwhile two million movies have been downloaded via the service so far. But this still pales into insignificance vs. performance of audio titles: 13 million single tracks and just under a million full album downloads every week.

Whether this latest development will play to Apple’s business model of driving hardware sales (eg video iPods, Apple TV) through offering a compelling range of software (TV and music) remains to be seen. In any event, it’s a big move for the U.K. market which can only serve to stimulate overall demand for licensed, downloadable TV and movies.





iTunes video update

2 08 2007

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According to Tuesday’s press release, announcing music downloads had topped three billion, Apple has updated its numbers for the iTunes video catalogue. According to the statement, there are now 550 TV shows and 500 movies available for download.





Microsoft to enhance Zune product, delays in Europe

29 07 2007

Microsoft is to release its next-gen Zune portable media player before Christmas, according to this report. Significantly, Microsoft is aiming for parity with iPod by adding podcast and video features.

In a related report, paidContent.org says that a European launch has been delayed, owing to difficulty in signing content agreements. It adds that one million units of the device have been sold since it was launched eight months ago.