Running out of Joost?

Rory Cellan-Jones over at the BBC has an interview with Niklas Zennstrom about Joost.

Last year Joost raised $45 million from investors - after initial funding from Zennstrom and his Skype co-founder Janus Friis - to launch a platform enabling TV firms to put their content in front of a global audience. There was a lot of hype and hope about this advertising-supported platform which was going to be the big winner from the internet television revolution, just as Skype had made internet telephony take off.

But when I interviewed Niklas Zennstrom at a networking event in London this week, he conceded that Joost was going to take a lot longer to reach a big audience than Skype, partly because of the need to reach complex deals with media owners. And when I asked when he expected to turn a profit, he made it clear that was so far off it wasn't worth talking about now....

....Zennstrom insists that Joost does not need blockbuster programming, like the Premier League football on which BskyB built its business. He believes this global platform can prosper by serving viewers with all sorts of special interests, from fly-fishing enthusiasts to gadget fans. What's not clear to me is why a large audience will go to the bother of installing software without the lure of something they can't get anywhere else.

2007 was supposed to be the year that internet television took off, with the launch of a whole clutch of services with wacky names and big ambitions. But two things have happened - the viewers have been slower to take to online TV than expected, and the big established broadcasters have launched their own platforms, keen to avoid the mistakes of the music industry which handed the digital initiative to Apple's iTunes service.

Three things have stopped Joost so far according to our analysis:

(i) Their proposition has not got a good enough - or at least differentiated - proposition (or content) to drive switching behaviour, whereas Skype had an immediate benefit (Free)

(ii) There are a lot of new entrants by major playesr (eg iPlayer) - if anything, the "Skype" plays in Web TV are the newly emerging pure PC-TV plays.

(iii) The good enoughs are still good enough

For Joost to improve its fortunes, Content is always king - but UGC/ProAm is probably a better play than More TV We Can See Already.