There’s something ironic about Viacom management preferring to deal with the technologists that drive Joost, rather than the people at Google who bought YouTube, because they are the same people that wrote the Kazaa P2P application that almost brought the record labels to their knees through promoting piracy.
But Viacom was predicted throughout the week to announce a major content deal with Joost, primarily because it will offer a way to ensure that the Viacom content cannot be pirated from the Joost system, something that Google’s new purchase YouTube has singularly failed to do over the past three months. Two weeks ago Viacom called for YouTube to delete 100,000 items from its service which breached Viacom copyrights.
MySpace has managed to adopt filtering technology that stops this from happening, and although few details have been announced by Joost, the would be internet TV service has people behind it that are more than capable of providing the same guarantees at launch.
But it remains to be seen whether or not the creation of Joost is something that the major broadcasting networks and the leading US content providers will look back on with fondness, once the effect of Joost has played out in the market. It appears to us that Joost is about creating TV services cheaply and as such it yet again lowers the barriers to entry for new broadcasters.
If you add to that the lowering cost of genuinely high quality cameras, video production equipment and editing suites, and the potential for companies that publish video through Joost on a global basis, you are left with a service that is likely to stimulate 100s, if not 1,000s of new TV channels, and among them old school content creators like Viacom, may find themselves swamped.
The Joost management has made it clear that its aim is to promote quality video rather than user generated video, but the UGC community is likely to foster many professional video creators, and the new movie entrepreneurs are almost certain to emerge from the Joost community, not the Viacom community.
It’s our belief that the major content creators will continue to find a safe haven from piracy, and a secure business model from Joost, but that it may eventually also prove their downfall if it is a runaway success that they cannot control.
The Joost system shows TV on a PC at just 400 Kbps downstream, and uses 100 Kbps of upstream traffic to take copies of content on your PC and send them to stream on other PCs. It breaks video down into chunks of around 10 seconds of video for storing and uploading and has DVR controls, to play, skip, fast forward and reverse as well as a translucent program guide which arrives when the mouse is moved and disappears when it is left alone. Advertising is understood to be limited to a maximum of 1 minute per hour, which of course will mean that even with addressable advertising, the amount of revenue that can be generated from Joost should be far less than conventional TV per viewer. Which means it may be fine for a new style internet entrepreneur, and not fine for the content majors that have learned to rely on huge advertising revenues with which to drive content.
Joost is widely thought to have already signed content deals with Warner Music Group and the TV production company Endemol.