For something that isn’t available to the masses yet, Joost has a lot of people juiced.
In three months, the online television service, still in testing, has secured the rights to television shows from Sony, Warner Bros and Viacom. It has lined up advertising from Coca-Cola, Procter & Gamble and Kraft, and raised $45 million (Rs18,450 lakh) in funding, including the backing of one of YouTube’s supporters.
Much of the attention has to do with founders Niklas Zennstróm and Janus Friis, the duo that developed Skype, the Internet telephone service acquired by eBay for $2.6 billion, and Kazaa, the online music sharing network.
From Apple to Google and YouTube, Joost faces hardy contenders harnessing the Internet to present music videos, television shows and movies to a rapidly growing number of online consumers. Yet, despite all that, Joost has managed to stand out, with many already heralding it as a contraption that could upend broadcast television, just as Skype did for the telephone.
“They remade the music industry with Kazaa. They remade the telephone industry. People are anticipating they’re going to remake this industry,” said Daniel Leon, vice-president of Sivoo, one of Kazaa’s many partners.
Code-named the “Venice Project,” Joost opened a few months ago to a select group of users, with about 400,000 people registered so far and widening as friends invite friends.
The service takes its cue from on-demand television. Viewers download a player that turns their computer into a television set, allowing them to surf through a line-up that includes the channels Comedy Central, the Best of National Geographic and the Transformers, and, from there, pick from a selection of full-length shows.
A critical distinction from other online video sites such as San Bruno’s YouTube is that Joost restricts its library to the shows supplied by its partners. Users can’t upload personal footage—or pirated videos—as they can elsewhere.
“Joost is very different from the other efforts online,” said the company’s chief executive officer, Fredrik de Wahl. “It’s about watching television. It’s not about putting clips online.”
That strategy has put Hollywood at ease and seems appropriate, given the founders’ history with Kazaa, which was sued for copyright infringements.
“It’s a comfortable environment for us,” said Craig Hunegs, executive vice-president of business management for the Warner Bros Television Group, which plans to offer such shows as Babylon 5 on Joost by the end of the month. If the partnership is successful, Hunegs added, Warner may supply more current programmes—not just ones from its vault—and even start producing original content for the service.
Joost does use other popular elements from the Internet. Users can search for shows, rate them and chat about them with buddies and fellow fans. It uses peer-to-peer technology to supply the shows, streaming them in television quality and, eventually, high-definition picture quality.
The shows are all free, paid for by advertising. Viewers will have to watch commercials, but only three minutes or less per hour, de Wahl said. The advertisements will be targeted at the individual as Joost tracks what its users watch, when they watch it and where.
Joost, based in Luxemburg, with US headquarters in New York, is ambitious. In raising $45 million, some from Sequoia’s Roelof Botha, who funded YouTube, it also received capital from Li Ka-Shing, a powerful businessman in Asia. Though Joost is mostly in the US and Europe, it’s already looking at Asia, particularly China, with its booming Internet population. The launch of Joost and other online video services comes as a growing number of people around the globe have access to high-speed Internet and as large files can be moved over the Internet more cheaply .
Joost faces competition in just about every direction. Telecommunications carriers are developing set-top boxes that download shows from the Internet.
Television networks such as ABC have set up their own sites. Apple is selling television and movie downloads from iTunes, which customers can transfer to their iPod, as well as to their television sets via the new Apple TV.
Another challenge: While Joost has a growing list of programming, it isn’t exclusive. Its partner, Turner Broadcasting System, for instance, also has a deal with Veoh. Warner sells its television shows on BitTorrent and iTunes. The National Hockey League also supplies clips for YouTube and Google. “You want to be where people want to be,” said Keith Ritter, president of the National Hockey League’s Interactive CyberEnterprises. “You want to place as many bets as you can. You never know what’s going to work and what’s not.”
Joost’s success doesn’t have to be at the expense of someone else, or the other way around, said Brent Weinstein, head of digital media at the United Talent Agency, which represents some of Hollywood’s biggest stars and has been evaluating Joost for its clients. “It’s not like traditional film and television, where everyone is fighting over rare and finite time slots,” he said.
It’s just a matter of attracting an audience. The real test will come once Joost is available to the mass market. Right now, many of its testers are high-tech early adopters. “I’m pretty pumped about it,” said Matt Brezina, co-founder of Xobni, a San Francisco start-up aimed at fixing email inbox problems. Brezina stopped subscribing to cable television years ago. Joost is “free, which is cool,” he said.