Joost bows to YouTube, gives up consumer video

The peer-to-peer magic that helped Kazaa and Skype dazzle consumers and disrupt the music and telecom industries has failed to produce the same kind of success with Web video.

Mike Volpi has stepped down as CEO but will remain chairman.

(Credit: CNET TV)

Joost, the third major creation by Niklas Zennström and Janus Friis, the duo that also founded Kazaa and Skype, announced Tuesday that it will dump its consumer-video service and will now focus on building "white label" video platforms for "cable and satellite providers, broadcasters and video aggregators."

The move marks the end of Joost as a YouTube and Hulu competitor and also closes the book on the attempt to resuscitate the company overseen by former Cisco executive Mike Volpi. Joost announced that Volpi has stepped aside as CEO but will remain chairman.

Joost had signaled that it might be ready to throw in the towel. In April, Sony Pictures decided to pull the studio's content off Joost. Soon after, CNET News reported the company was shopping itself to cable providers, including Time Warner Cable.

Last week came word out of London that Volpi was up for the CEO job with a British public service network.

The truth is Joost never gained enough steam to challenge YouTube and Hulu. Its early missteps included requiring users to download a software client and then, despite boasting Viacom as one of its backers, failing to sign the kind of premium content that made Hulu a force.

The company, which had been heavily hyped, largely on the reputation of its founders, eventually launched a browser-based video service. By then, however, Hulu offered lots of top TV shows and movies in high-quality video.

Joost's opportunity had passed.

Microsoft has also "scaled back" its own consumer video service, Soapbox, according to a story published earlier this month by my colleague Ina Fried.

[codynews]

Good. I like wins by American companies. Youtube and Hulu = US companies. Joost = not.

[mobycat]

As if that makes any difference with an internet company.

[kgsbca]

Skype has yet to disrupt the telecom business, as their revenue per registered user amounts to little over $1 per year. The Joost founders never came up with any viable business model for any of their startups, other than to sell them to horribly mismanaged larger companies (ebay, under the leadership of California wannabe governor Meg Whitman, blew over $1B on Skype without any idea about how to make money off it).

Joost was doomed from the start, there is little incentive for consumers to open up their home networks and share their upstream bandwidth with studios and other giant companies, just to lower their costs of video distribution.

[J. Blow]

The client wasn't the problem. The simple fact of the matter is they didn't have compelling content when they launched and they never really caught up.

No content = no users every single time.

[ahickey]

Skype served a great pupose in getting cheaper calls.
I now pay a monthly flat fee for line rental, broadband and international call to over 30 countries at any time from the UK. The cost is about 1/3 of what I was paying before.
I believe Skype foreced the telcos to be more competitvie. it didn't give Skype more business because the telcos moved quickly but I know it worked for me.

[keepntabs]

I still go to Joost occassionally, and the need to download a client to view the content on the site was not a hinderance to me. I like that they offer programs that are made outside of the U.S., and that it is one of the few online video sites that I can launch when I travel outside of the U.S. My biggest gripe was finding a program. The search was cumbersome for me; as it is with TV.com. However, maybe if more online video content providers offered desktop apps like Hulu Desktop I think more would find success, because you can obtain the site content without launching a browser. This can be very helpful to people who have children, and allow them to watch online videos, but don't want them surfing on the Internet unsupervised.