Joost Just Gives Up On P2P Altogether

Joost’s two year old online video service was a pretty darned smart idea when it first launched.

Instead of streaming video through the Joost website, users would download a Mozilla-based client and watch it there instead. The user experience could be more tightly controlled. And more importantly, the Joost client had built in person-to-person file sharing. That meant Joost had lower bandwidth bills. It also meant that Joost didn’t need to worry about overloading servers while showing live events – users would just grab the stream from others automatically.

But Joost bet wrong, as the whole world, led by YouTube and then Hulu, got comfortable with Flash as the delivery method for video. Showing video on Flash meant users could deep link to specific videos, and also embed stuff they liked on their own sites. With the benefit of hindsight it all seems sort of obvious.

Joost adapted, though, giving users the option of an all-Flash site in September. Some international users would still be required to use the software to reduce bandwidth costs, and the company was hoping U.S. users would eventually install it, too.

Today they announced they’re discontinuing the software application altogether, but they aren’t saying why. It’s clear that Joost’s strategy has been fluid over the last few months as they try to figure out a way to compete with the much more successful Hulu. It’s honestly not clear that they really can. Joost doesn’t offer anything particularly unique or compelling to users over competing sites with proprietary content (Hulu with Fox and NBC, TV.com with CBS).

Joost raised a big $45 million round of financing way back in 2006. It’s not clear how much of that is left. If they want to succeed they’re going to have to do something pretty radical.