BUSINESS BLOGS
BUSINESS BLOGS
category: business
19 Jan 2008

Mathew “no-nonsense” Ingram asks if Joost is headed for the deadpool. A lot of others chime in, some even suggest some ways to rescue Joost.

(disclaimer: Joost is one of WatchMojo.com’s many distribution partners - see my post when we proudly announced this: Joost what does WatchMojo.com Have in Common with Viacom, CNN, Turner, Sony, CBS, Warner Music Group and the NHL?).

Obviously, we want all of our distribution partners to do well. Their success translates to our success. We also get a lot of inside information from such partnerships, I usually keep such details private. But I do comment on generalities of the marketplace. I like to think that makes my comments somewhat more accurate. Bear in mind, as a content producer in the equation, I do have a bias. But, that bias preceded being a content producer. In other words, I became a content producer because I believed what I am about to say, have been saying, and will continue to say…

Anyway, here goes:

Last time I checked, Joost is not dead. In fact, it’s sitting on $45M in funding (or a very good chunk of that) and backed by CBS, Viacom, Sequoia and a who’s who list of backers. Oh, it’s also founded by the lads who launched KaZaa and cashed out Skype to the tunes of billions.

Translation: Joost will not die anytime soon, if ever/at all, but rather, it will evolve over time until it finds its niche. The problem is, it is under the spotlight so all the wins and restarts are cast under the spotlight. Example: Henry Blodget’s post states “How the mighy have fallen.” No disrespect intended to Joost here, but when was Joost might? They were always a challenger to YouTube et al. If Joost has fallen in any way, it’s in the eye of the media, so knighted them before they even got on their horse.

[Side note: On the other hand, admittedly as a self-financed startup, when I saw yet one more distribution platform play get oodles of funding, I did scratch my head, but I digress].

I know precisely how many streams Joost does in a month. I won’t say how many (not because I have a NDA in place, just because it’s not my place to say that and it’s not right to do).

All I will say is that indeed, Joost is not yet matching the hype it generated before it launched, but that has a lot to do with the amount of buzz it generated and not because of anything pertaining to Joost itself.

Online video is very embryonic and Joost has ample time, goodwill and most importantly, money, to continue, and I suspect that Joost will do fine, but what Joost is today will be different from what it will be in the future.

While I agree with Mark Evans that 2008 is the year many companies will cease operations or be sold to recoup VC’s investment, Joost won’t be part of that list. By virtue of being founded by Janus Friis and Niklas Zennstrom, Joost probably managed to get great terms from the VCs. Remember, valuation and money raised is secondary to the terms of a financing deal.

My guess is that Joost has got ample time to maneuver. Moreover, backed by Sequoia, it can be flipped easily… potentially even to CBS and or Viacom (or Cisco, since Joost’s CEO Mike Volpi was previously the M&A guy at Cisco). I am not saying that this will happen, but Friis and Zennstrom are two of the smartest business people in the technology world and I doubt they lost their brainpower at eBay.

However, what bloggers are talking about is representative about a deeper issue.

Technology is a commodity. There is nothing fundamentally unique to anything Joost, Hulu, MySpace TV, YouTube, DailyMotion, Revver, Veoh, [insert 100 other companies here] are doing and have built.

Distribution is hard to build if you are one of those companies I mentioned, but as

Distribution becomes more fragmented… then one adage remains true:

Content is king. Note, WatchMojo.com partners with all of those companies I listed excluding Hulu. So in this brave new world: content owners’ success becomes agnostic to any one access point, but those distribution points’ success rides on two things: their ability to get content and build an audience.

Let me repeat that, content is king. Sumner Redstone said that over time, new distribution channels (and types) emerge, but those who own content prevail. What you are seeing in the marketplace has a lot to do with content.

YouTube won because it got the content. The quality sucked. They did not have rights to it initially… but they had content. They won the game.

I think VCs have over-invested in these distribution technology platforms and over time, you won’t need 100 of these, so many will fall by the wayside, but Joost will find a niche… give them time.

An anecdote for you:

Yesterday I emailed a business adviser of ours a clip we just finished producing for an upcoming initiative. I did not publish it in our CMS (content management system), it was not on our CDN (content delivery network), it was a basic clip that auto-played on a static page.

Everything about the technology and platform was fugly. But the content, the content was beautiful.

The adviser gave me feedback from his circle: everyone raved and ranted about it. No one cared that the video was not in a super-duper player; everyone cared about the content. Why? Because content is king.

Mark Evans might be right at a macro level: 2008 will send many companies into the deadpool… sure, but in online video, at the micro level: 2008 is also the year that video content tips the balance of powers fully in its favor.

Here’s about 10 hours of programming of Watchmojo.com on Joost, for 100s of hours more, check out WatchMojo.com itself… or any one of the hundreds of other places you can access our content.

Related:

- What’s Worst: Tunnel Vision VCs or Shell Shocked Media Moguls?
- Joost what does WatchMojo.com Have in Common with Viacom, CNN, Turner, Sony, CBS, Warner Music Group and the NHL?
- How much is Joost or NewSite (Hulu) worth?