Why Joost Isn't Just Your Average 'YouTube Killer'

Viacom, Others Provide Professionally Produced Content for Video Service

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NEW YORK (AdAge.com) -- You get home from a long day at work, flop down on the couch, crack open a cold lager and flip on the TV. Clicking through your own personal programming guide -- no more having to scroll past endless movie channels or cooking networks you've never watched -- you settle on a surfing show. A massive wave forms and you shoot your brother an instant message: "watch this." He clicks on it and instantly is synced with the program you're watching.
Joost's model includes five- to seven-second preroll ads, and midroll ads as well.
Joost's model includes five- to seven-second preroll ads, and midroll ads as well.

Here's the catch: the video stream isn't coming from Comcast or DirecTV, it's coming from Joost, one of the latest entrants into the online video market -- and a service for which the cliche "YouTube killer" has been commonly applied. But it's more likely to become a cable-company killer. While YouTube has become a repository for Long Tail user-generated content, Joost is looking to distribute professionally created content.

Differences with YouTube
There are other differences, too: Unlike YouTube's often grainy videos, Joost's picture is fairly clear. And unlike YouTube, where you can watch any number of broadcast network TV shows thoughtfully uploaded by the site's users, Joost has only a smattering of networks available. That's because it's only showing content from networks that it has signed to content deals and at the moment that's only about a dozen or so (it's in beta).

Oh, and it also has a clear ad model.

David Clark, the former sales chief for MTV Networks International, was showing off the service in an office just south of Manhattan's Union Square, where he and about 20 other Joost employees were busy working to ink content partners and advertisers. The market for web video, Mr. Clark said, is "so much bigger than YouTube. ... If we succeed, we'll be the place where people go for video online."

Most recently, Joost made news thanks to a deal with Viacom, just weeks after that company sent notice of copyright violation to YouTube. It also has content deals with companies such as Havoc, National Geographic and the Steve Case-backed Lime.

P-to-P technology
Joost, previously called the Venice Project, launched last year by Niklas Zennstrom and Janus Friis, the duo behind other revolutionary peer-to-peer businesses Kazaa and Skype. It's run on that same peer-to-peer technology, where the task of moving large files is spread among a network of computers, dramatically reducing bandwidth costs. And unlike popular P-to-P sites such as BitTorrent, which help facilitate downloading, Joost's system facilitates streaming -- a detail that has lowered the barrier for getting copyright-holding content companies on board.

So far, Joost's ad model includes five- to seven-second ads that pop up when certain videos are initiated and mid-roll video ads in videos more than five minutes long, the number of which are scaled pro rata to the length of the content. Wrigley, T-Mobile, Maybelline and Phillips are among the beta advertisers. The idea is to have a single advertiser sponsor a piece of content, but to give it multiple elements, Mr. Clark said.

Like other web ads, they're interactive and let users click through for more info, e-mail offers and long-form messages. The service also touts what will be powerful targeting and reporting capabilities. Echoing Joost's founders, Mr. Clark said, "We're combining the best of the web with the best of TV."

Marketing models
Some marketing models are still being smoothed out. For example, Joost hasn't quite figured out how it would treat marketer-created content, such as a Bud.tv. Though Joost is ad supported, it naturally wouldn't place one marketer's ads against another marketer's content. A marketer that wants its own channel on Joost could make a cross-network media buy to promote that channel or pay for prominent placement on the channel guide, Mr. Clark suggested.

In all, the Joost experience is really TV on steroids -- and that's purposeful. "Our philosophy is TV is pretty good," Mr. Clark said. He points out that when you open the program Joost is tuned to the channel you were most recently watching, and should you wish for a bigger screen than your computer monitor, you can certainly watch it on TV at near-DVD quality. (It can't be high-def yet; Mr. Clark said that's only due to limitations of the "last mile" of bandwidth.)

Other kinks
There are other kinks to be worked out. Some of Joost's tens of thousands of beta testers (you need an invite to try out the service until it launches later this year) have complained online via blogs and message boards of installation glitches, slow download times and a lack of content -- probably Joost's biggest challenge. Signing up content partners certainly isn't going to happen overnight for the service. Viacom was an early get, but it's not coincidental given that several former MTV Network staffers, including Mr. Clark, are at Joost.

Although it has managed to capture some of the social aspects that made the now Google-owned video-sharing site such a viral hit -- instant messaging while you watch; the ability to program a "channel" and share it with others -- Joost still has a long way to go to make its service as ubiquitous as YouTube.
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