If you don’t even know how much money a company has raised, it’s raised too much. Akimbo shuts down, people don’t even know how much dough it burned through.
Digg this Blog
Share on Facebook
WatchMojo on Twitter
WatchMojo on YouTube
Add to Favorites
WatchMojo NewsletterWhy do startups fail? The reasons are pretty obvious and easy to highlight. VCDave does a good job of listing them:
Oddly enough, however, while pointing out failure factors is relatively easy, truly determining what makes for a successful startup is pretty much two parts art and one part science. I dumb it down to a combination of the following variables:
- vision
- ambition
- execution
- luck
- timing
But I credit persistence/determination/tenacity as the #1 driver for success because invariably without persistence/determination/tenacity you will hit walls and fail.
If my English were any better, I’d pick one of those three words, but you get the idea.
John Furrier has some good advice too, I agree about maintaining control. So much of our days would otherwise be spent on useless arguments and wasteful discussion. The truth is most people are not sincere and don’t see the forest through the trees, so they argue over personal and petty things. If you have control and can cut through the turf-protecting BS, you can win.
More importantly, you can move quickly to jump on opportunities and fix mistakes quickly.
YouTube is looking at more and more ways to de-emphasize user-generated-crap in favor of professional content.
Excellent. Incidentally, I did a search for Travel to Madrid… look at the top result. Mind you one of our earlier lower-quality travel clips… but still better than most of the crap you would find otherwise.
TheStreet.com’s Jim Cramer says CBS should go private (via SAI). Funny, I said that might be a good strategy for CBS, too, back in mid-April. Here is the summary of the argument:
One way that no one will care about a) Performance or b) Les Moonves salary is if it were not publicly traded. Moreover, Wall Street is being unreasonable: yes the company is shrinking, but it will take time for digital revenues to grow, anyway. However, if someone came along and took CBS out at $20B, I think a lot of shareholders would buy that (or I guess, sell for that).
It then allows CBS to d) clean house if they so choose to (and will have to). Kate Couric becomes moot in the grand scheme of things… but most importantly, it will allow CBS to roll up a number of smaller web properties, content producers and tech applications to bolster its overall portfolio. In 4 years - when video advertising will be $7.1B in the US (up from $1B) and all online advertising will be nearly $100B in annual expenditure - it can then be go public again…
This might very well be the best course of action. The question remains: does private equity have the stomach for a $20B debt purchase? With $16B in annual revenues… I think so.
See the video here with Cramer… everytime I see a pre-roll I just shut off the video… unless I need to find my headphones which thankfully take me oh-about-30-seconds:
The Rumor
Joost is apparently in the market looking to raise more money. It raised $45M last year from an all-star list of investors. The company was founded by founders of KaZaa and Skype. Skype sold for billions, so Joost’s chances of running out of money are close to nil.
Joost is one of our many distribution partners, so I don’t really want to comment specifically on Joost. But I will say the following about M&A gamesmanship:
Despite what some people say about the rationale of the download client model (I agree it ain’t wise), Joost is rumored to be working on a browser version, too, and their interface is slick.
And like the Alley Insider piece points out, the company does have a lot of distribution deals locked up (including some lucrative ones with Major League Baseball).
The Conditions on the Ground
So there is a lot of value there, it’s just a matter of unlocking it. As such,
If it’s true that:
- the company is looking for more money,
- CBS and Viacom have been lukewarm to invest more money,
then I think that this could be because CBS and Viacom want to reduce Joost’s leverage in a potential buyout talk. Don’t get me wrong, there are way too many browser-based aggregation/distribution sites out there that would die for a buyout (Veoh, Metacafe, Daily Motion, etc.) but when you run down the list, Joost has a few advantages over them.
CBS, Viacom, Joost: Already in Bed
For one, CBS and Viacom already own some equity in Joost. It makes little to sense to spread themselves even thinner and acquire someone like Veoh or Daily Motion or Metacafe. Break.com is technically locked up by Lions’ Gate, anyway. Daily Motion has an HD dimension… but Joost creates a perfect opportunity for CBS/CNET.
The Major Networks
For one, ABC yesterday launched (or mentioned the impending launch) of a new player. They are pretty set on going in alone, which is not a bad idea per se when you consider that between ABC.com, Disney.com and ESPN, they have 3 of the top 10 players online.
NBC and FOX own 50% of Hulu… so they are set. Incidentally, Hulu just cracked the Top 10 Video Rankings, knocking off the essentially defunct Google Video (Google is obviously backing YouTube, to whom WatchMojo.com is a major content provider).
Amongst the majors, this leaves CBS without a distinct video player.
Why Joost Is Compelling to CBS, and Viacom
But there is more to it:
- CBS has hitherto adopted a distribution over destination strategy. That is a very wise strategy, and frankly, one I shamelessly stole and successfully applied to our our distribution strategy.
- CBS just bought CNET for $1.8B. However, CNET has a myriad of video players and strategies. For one, there’s the videos on CNET.com, then there’s CNET.tv. CNET itself publicly admits that it is trying different things on this front.
- CBS just inherited TV.com in its CNET buy. I could be wrong, but the first time we at WatchMojo.com tried and tested the Joost player, we all sort of paused, looked at one another, and thought: “wow, it looks like television”.
- CBS this past week launched a site called CBSaudiencenetwork.com. That seems awfully close to what one would call brochureware for media planners and buyers… but all that is needed is a name change (all right, a lot more is needed) for that property to become CBS’ gateway - dare we say portal - online.
- Of course, like most TV-based media companies, CBS is not crazy to take its best content and put it online. The cannibalization risk is simply too great. Sure, it has bought Wallstrip.com and could use it to create more content, but one year into that deal, there are only two shows to speak of (that’s not a knock, just an observation that the insatiable appetite of online video consumers is far too large for a little bit of content, you need a lot of content, updated frequently).
- So CBS would be looking for more content. CNET is one source of more content (though I am sure CNET is probably looking to CBS for more video content).
But they will need more if they are to match Hulu’s demand for content.
As a supplier to Hulu and Joost, I will say this: I feel like a crack cocaine dealer with some good stuff because Joost, Hulu, YouTube et al. can’t seem to get enough video content. I think that is one-part credited to the quality and scope of WatchMojo.com’s content; but more than anything else, it’s that there are more videos streamed each month than there are search queries. That’s right: there are over 11B video streams each month!
Joost: Deals to Build On
But, you might ask… where would all of that additional content come from?
Maybe Joost? I will make another general comment: one reason why Joost created a lot of buzz last year was because it signed numerous distribution deals. However, one reason why Hulu has an innate edge over Joost is that Hulu is backed by both NBC Universal and News Corp. Right there, it has access to the media catalogs of two of the world’s richest media libraries. But it’s worth noting that even they don’t simply turn over all of their videos to Hulu. The reason is simple: the online media world will shrink television markets.
The Rationale for this Not-So-Crazy Idea
- It would not be crazy for CBS and Viacom now to do a 50-50% joint venture (yes, I know, Viacom already has joint venture; but that is for a premium, pay video service). How about a separate, free, ad-supported Hulu-ish site using Joost technology (I could be wrong and Viacom also plans to do free-ad supported content on it, too).
Technically, there is nothing stopping CBS from licensing Joost’s technology. But for those needs, there are better options.
Moreover, media companies don’t like to lease, they like to own. Even Hulu bought its underlying technology, Asian-based Mojiti. But what Joost offers that Mojiti did not is a link to content owners.
What makes Joost interesting then is not the technology alone, but the rights they have signed.
Remember: content is king, thinks Sumner Redstone.
- Since CBS and Viacom share a Chairman but have complementary film and TV content offerings, it could actually become something interesting, especially if you funnel all of Joost’s other programming in there, too.
History Repeats Itself
Yes: CBS and Viacom are for all intents and purposes independent companies. However, they share one small detail: Chairman named Sumner Redstone, famous for coining the content is king mantra, and eager to one-up his longtime rival Rupert Murdoch. We’ve already outlined just how eerily similar CBS’ strategy to accelerate its digital strategy is to that of Fox Interactive Media, but by pulling something like this off, then he really would also match Hulu.com’s mojo.
After all, in the past 2 years, YouTube has emerged as the frenemy to media companies, but when push comes to shove, media companies are really fighting one another.
In fact, Viacom CEO Phil Dauman is right to say:
“CBS pursues its strategy and Les’ job—and I respect him a great deal—is to pursue his strategy and have the right thing with his assets. He obviously has a different kind of asset base than we do, with a strong broadcast orientation. … Seeing that, I’m sure the analysis shows that it’s right for them. Meanwhile, we’ll do what’s right for us.”
Always interested in the inner workings of mergers and acquisitions, I actually asked Quincy Smith how Viacom and CBS divvied up investment and buyout opportunities…
Now, of course, CBS and CNET can just hire some programmers and design something, or they can surely leverage one of CNET’s existing players… but if it has cost Joost’s tech-centric managers $45M to do all of that, how much will it cost CNET (accused - somewhat unfairly - of being caught in Web 1.0 days) and CBS (as traditional as media will ever get) of building something cool, useful, workable, quickly?
I don’t know.
I called CBS’ acquisition of CNET 8 weeks before it happened… and CBS CEO Les Moonves said: “CBS had looked at CNET for more than a year but initiated discussions only six-eight weeks ago.”
Really? Maybe it was a coincidence.
I would admit that Viacom and / or CBS buying Joost is less of a long-shot (given the existing equity investments) than CBS buying CNET. But:
- CBS and Viacom launching a joint venture to counter Hulu.com
- using Joost
- and rebranding it all under the TV.com moniker.
Yeah, if that happens, then I think Messers Smith, Ashe and Dauman owe me something.
What, I don’t know… but something!
I do think if this happens, then like Hulu it needs to be a separate entity and they need to find their own Jason Kilar (an outsider with a clue about what to do, basically).
Ultimately, as I said, the Joost founders are in no rush to sell… unless, of course, their sights are set on the next big thing already and want an exit.
From Paid Content:
— On Joost: Viacom was an original investor in the much-hyped video service from the founders of Skype. Is the service where he thought it would be? ”We come at Joost or other platforms from the point of view that we cannot predict—nor did we in that case or any other case—predict which ones are going to be hugely successful, moderately successful, which won’t work. … We root for all the distribution platforms because the more of them there are, the more exposure our content has.” As for Joost, says Dauman, “They’ve been trying different things. They’ve been tweaking the model but we’ve certainly been happy with the relationship.” But will Viacom take part in the start-up’s second round? Doesn’t sound like it. Dauman: “We did receive equity in connection with our original deal and we’re happy where we are. … I don’t think it’s fair to them for me to comment.
I agree with that statement (in bold). More from HipMojo.com on distribution and content here.
PLAY
