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.

Advertisements




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.




The end of TV (…just not quite yet)

31 07 2007

When is the end of TV not the end of TV? When it “changes significantly over the next decade,” observes Ben Macklin, senior analyst with eMarketer and author of the new report US TV Trends: The Impact of DVRs, VOD and the Web.

TV ad revenues showed positive growth during 2006, states the report:

085851.gif

 

A forecast which is broadly mirrored by U.K. numbers published yesterday by Zenith Optimedia, which predicts modest growth of 2% for TV advertising during 2008 and slightly flatter growth of 1% to 2% from 2009-2012. Significantly, it asserts that growth across ITV’s portfolio of digital channels isn’t enough to shore up the decline in revenues for its primary ITV1 network. Unlike the U.S., however, U.K. TV airtime is the cheapest it has ever been since 1995 or the early 1980s.

Returning to the eMarketer forecast, it predicts that by 2011 as much as half of U.S. viewers will have access to timeshifting technologies, such as VOD and DVRs, combined with greater viewing of video online:

085850.gif

… Leading to more ad spend moving online:

085855.gif

In a related report, Media Post poses the question: will this year’s ad negotiations be the first digital upfront? No, according to the straw poll of one: MediaVest’s Christine Merrifield; though interest in VOD is on the rise.





ITV Broadband rollout gathers pace

17 07 2007

UK broadcaster ITV has been slowly adding to its online video service, which now offers a selection of treats from the archives, alongside catch-up episodes of popular soaps like Emmerdale and Coronation Street. Vintage classics such as Morse, the first episode of Brideshead Revisited are offered alongside classic documentaries, such as Diana: Story of a Princess and Whicker’s World. Plus my faves, children’s series Joe 90 and Metal Mickey.

Live streaming of ITV’s four channels is also available, though when I checked in on ITV1 for the tail end of GMTV, all I got was a message saying: “Sorry the current programme is unavailable”.

There are also Celebrity Playlists from the likes of Zoe Ball, This Morning anchors Phillip Schofield and Fern Britton, and Amanda Burton. Not an entirely new concept: iTunes has been doing this for a while and the BBC offered a similar feature during the trial of its iMP service — but ITV do seem to have got the choice of celebs right for the tone of offer which will likely success with its core audience.

At first glance the navigation is woeful: content discovery is anything but intuitive, but there may be method in ITV’s madness. All content is offered as on-demand streams, so it could be the broadcaster’s way of managing capacity.