Joost Signs Off

Joost, the online video service that preceded Hulu but has since been overshadowed by it, has announced it is shifting priorities away from serving online video to consumers, to serve cable operators and other media companies with their own ready-made online video platforms instead.

Joost’s failure comes as a result of the difficult advertising marketplace.  Like Hulu, and many other ad-supported websites, the ongoing recession has made it difficult to attract advertisers to support the costs of licensing and distributing television shows and movies.  As a result, the company today announced it would be refocusing itself on selling its services to other media providers.  Joost tried to market itself to cable companies earlier this year, reportedly talking with Time Warner about buying out the service.  But no deals were forthcoming, and the financial picture at Joost appeared bleak.

Joost still will maintain its website with some of the content it continues to hold licensing agreements to stream to viewers.  But once those agreements expire, the future of the site itself becomes an open question.

In simplified terms, Joost plans to sell a ready-to-run video platform to any media company that wants to deliver online video to customers, subscribers, or the public.  The media company simply has to customize its website’s look, and Joost’s streaming technology will run underneath it.  Joost already uses copy protection and authentication technology to “pre-authorize” viewers to permit them to access content based on their Internet address and location (licensing agreements often are for individual countries only, not worldwide), so their platform is already capable of restricting access to authorized viewers only.

Joost was the brainchild of Niklas Zennström and Janus Friis, the duo that also founded the music swapping service Kazaa and the popular Skype calling service.  All three services originally relied on a peer-to-peer distribution platform, which meant while you swapped music on Kazaa, make phone calls on Skype, or watch videos on Joost, the software quietly shared some of your bandwidth with other users to help transport music, phone calls, or video.  Joost required users to download a software application to access the service, something that proved unpopular with the Internet masses.  Hulu soon appeared and allowed people to watch video right from their browsers and quickly overran Joost in popularity.

By the time Joost came up with their own browser-based service, dumping the peer-to-peer distribution model, it was too late.  Most major networks and content producers had already signed their allegiance to Hulu, and Joost’s content selection stayed largely stagnant.  At one point, Joost tried to bring in user-created content and short form video, but most viewers weren’t interested.

It’s the second failure among online video services this month.  Microsoft announced in mid-June it was “scaling back” Soapbox, its attempt to rival YouTube with user-generated video content.  Soapbox had actually been around since 2006, but was often used to post copyrighted video content hassled off of YouTube.  By 2007, Microsoft stopped accepting new users until it got copyright violations under control, but by the time it returned, nobody outside of Microsoft’s Redmond, Washington campus cared.  The service now primarily exists to host Microsoft-generated video content.