It’s sad to see a company that we were all so excited about fade further into oblivion. Today Joost, one of the most anticipated startups in 2006/2007, is just an also ran in a sea of big online video sites like YouTube and Hulu. Today CEO Mike Volpi stepped down, the company is laying off most of staff, and refocusing the business to “white label online video platforms for media companies.”
Om has a good monday morning quarterback overview of why they failed, but to me it comes down to just a few things. They over funded ($45 million before they even launched) and they ignored the fact that users were quite willing to sacrifice quality in online video for the convenience of Flash in the browser. Joost waited until late last year to go all Flash – until then users had to use the downloadable Joost software and allow P2P streaming of shows. In the meantime there was no linking to Joost videos. YouTube and Hulu got all that social media and SEO juice that could have gone to Joost.
Founders Niklas Zennstrom and Janus Friis, who founded Skype and Kazaa, see the world in terms of P2P and downloadable clients. The joke about how everything looks like a nail if you’re a hammer is very true with Joost. But what worked with Kazaa and Skype a decade ago doesn’t work with online video in today’s world, obviously.
And this new business focus for Joost – white label video platforms – is a very tough market. Yahoo just bailed on it entirely after investing $160 million or so in an acquisition of Maven Networks last year. And competitors like Brightcove and Ooyala aren’t just going to roll over and let Joost take market share in this space.
Here’s what I learned from Joost’s failure – celebrity founders, celebrity CEOs and tons and tons of cash can be a recipe for disaster. Applying yesterday’s solutions to today’s problems isn’t an interesting business. And finally, knowing when to throw in the towel and just return what’s left of capital to investors is an important skill as well. That way everyone can move on and focus on real value add opportunities. There’s no room for Joost in the consumer online video space, and there’s almost certainly no room for them in white label video, either. Time to call it a learning experience and move on.
This is sad indeed. They were ahead of the time, just not within the right circle of people.
hopefully they will recover
you mean they will recover after the company disappears?
NZ and JF wil more than survive after Ebay has to settle with them again … what a bunch of Ebay idiots … who pays billion for a company but does not buy the underlying technology?
pplive in china is doing rather well – 120M users with 30M monthly active users. its a p2p client driven network similar to joost.
Yeah, because the Chinese consumer, with almost zero entertainment choices in its Big Brother-monitored media market, is just like consumers everywhere.
Both Om and you make very good points, but from a user standpoint the problem was pure and simple: lack of decent content.
Hulu seems to have solved both problems mentioned here, lack of distribution and lack of decent content. I would actually pay for their service.
You’re right. I was one of those who downloaded and installed the client from the very beginning, but never really used it because the content was far from being decent. They missed the key feature!
The user interface was also really impossible to use. Content was organized in a ridiculous fashion, you couldn’t find anything on the site. And there was way too much going on, clearly designed by committee.
Major fail was that even when it was flash for a while you still had to sign up in order to watch any video.
Also they had an obnoxious cartoon on the home page for a long time. In general I noticed a copious amount of complicated animations throughout the site, major cash sinkhole there too.
I guess these are all really the result of too much funding – less cash would have limited their design resources.
The list of reasons they failed could go on and on, too many to list…
I second that! Every time I went to Joost’s site it automatically played a depressing movie about a dog. Anything I tried I couldn’t get the darn dog off the entry page. Anyone?
I remember when everyone was falling over one another to grab a Joost invite. Never really saw the point in the whole startup, like you said, YouTube and Hulu pretty much have it all covered.
There are actually huge holes in the video space that haven’t been filled, that would be immensely profitable.
The right play, with the right marketing could be cashflow positive within 3 months of launching.
such as
You sound like an MBA from University of Phoenix
Hey Andy, I’ve got a turnkey, mission-critical end-to-end P2P B2B 2.0 solution that leverages network-compliant cloud-based social networking best practices in real time in order to deliver a seamless user experience that’s guaranteed to maximize ROI on a go-forward basis. Wanna invest?
Andy, can you say the same thing without bullshit lingo like “play”? Some people here speak English, not retardese.
Sorry, when commenting on a US blog I tend to use phrases that fit with the culture.
I would look on my use of “play” as being synonymous to “playbook”, though it should be noted that playbook is also a term used in Rugby.
Fortunately you haven’t learned to use threaded comment systems, so your grammar policing will most likely get pushed totally out of context, where it belongs.
This is a US blog? Who knew?
for some reason this thread cracked me up. i’m easily amused.
Wow. That’s huge.
I think this is a more focused post mortem than Om’s. It’s all about the browser, baby.
People don’t want to open other applications to do what they can already do from the one they use most often.
I’m not convinced the game for desktop applications is over. Also, Hulu recently announced a desktop app is in the works, right?
Pandora too – albeit a different medium. But I don’t think that makes Joost justifiable… not in the sense that the Joost app functioned.
And how profitable is Pandora?
Hulu has actually already released the desktop app for both Mac and PC and it’s quite slick. I especially like that I can use my Macbook Pro’s remote.
http://www.hulu...bs/hulu-desktop
I guess we should tell Steve Jobs to scrap that “iTunes” idea.
I think the only lesson learn from Joost is that celebrity founders (=experienced people) and lots of funding is not a receipe for anything – not even for disaster! The main problem in this business is that there is a tiny time window to take off with a positve spin and hit the critical mass, while the curiosity and the novelty lasts.
Good point about the ‘good enough’ Flash support being too late.
(so why haven’t we thrown all our iPhones in the trash because the stupid thing still can’t do Flash?)
Agreed. Not using Flash killed them but even if they had put out a lightweight Linux client I would have used it, but they never did. If you look at their feature requests people kept pleading for it. So add another problem to their failure -not listening to their users (or potential ones).
Spotify seems to be playing the game well with its desktop application.
I feel that Joost was mainly lacking:
a) A true wealth of content
b) ‘Buzz’ ie. word of mouth marketing
b is much easier if you’ve got a.
I also agree completely agree that no linking to Joost videos was a big mistake.
I agree. Desktop apps work fine if you’ve got the marketing muscle and media content. iTunes, anyone?
You should add to your point “B” any kind of marketing. Who beyond the tech community even heard of Joost?
If you ask people on the street, they’d probably think it was a caffeinated beverage.
the idea of joost wasnt that bad. For home theater pcs it was acutally quite cool, the thing that killed is was its lack of content.
Now there are other solutions that play flash internet video from all over the world (boxee, plesk) and thats all youll ever want from a desktop video app.
If they had done something like boxee with flash and really good exclusive content, it would have been a bomb.
I am going to say this for the last time: the VoD, microchunking, video snacking, what I want when I want it where I want it for free model is fucked.
Who says Hulu and YouTube are the winners? Together they’ve burned through lots more capital than Joost. Joost’s content library sucked because…because…they didn’t have a revenue model. And neither do YouTube or Hulu as far as we can tell.
As Andy above says “There are actually huge holes in the video space that haven’t been filled”. We call them blackholes here in the States, Andy. And they never get filled no matter how much money you dump in them.
The big-3 networks is playing a wait-and-see game with Hulu currently. It has the viewers in the TV space, but if viewers will start shifting online for content, and, the scales tip over to online streaming compared to TV then the big 3 will switch to programming all it content for Hulu.
Why online video is 100% better than any digital/analog TV combined? Analytics. Nothing comes close in measuring traffic/usage/stats etc.
No, online video is superior because slackers can watch TV at work and pretend that they’re working.
I actually think that the client and its use of p2p- technology was a really good idea. In a way, the fantastic music-service Spotify, has copied the concept and done a very good job.
What Spotify did differently , amongst a lot of things,was that they made sure they had all the heavy content producers onboard before they launched their service.
Joost lacked content, their client was on the right track, but too clunky and the UI that was rather confusing even if it looked pretty cool.
Joost actually got tons of useful feedback (the problems were visible very early on) on their forums right from the start, but no one from the developer team seemed to visit or monitor the forums. It was evident that consumers desperately wanted Joost to be good, so the fans actually gave their feedback and put up with a lot of bullshit from the developers before the company started its steady course towards the Deadpool.
Besides lack of content, Joosts main failing was their distrastous media strategy. They let the hype go way out of hand. If a newspaper said Joost had 500 channels of livestreaming content, no one from the company did anything to stifle the rumours.
The creators of Joost never let their product speak for itself and instead took every opportunity to keep the blown up image of the company as an unlimited resource for internet-TV, when it fact it was just mostly crap content video-on-demand categorized into “channels”.
I think clients are here to stay, its a brilliant way to have control of high-quality distribution, and not be a victim of technological shortcomings in the browser. I think their will be a new slick Joost-type movie/TV service in the future. But there will of course be no room for the mistakes Joost made..
A far better post-mortem. Thanks.
Not sure why everyone wants to claim the problem to be a desktop app. Joost’s app was buggy as all hell when it launched (with beta users). They could have easily been successful with good content, managing expectations better, and improving community interaction.
The tech-blogosphere cheered for Joost and laughed at Hulu, and now seems to be looking to justify their misplaced faith.
Why on earth did they go form “we’re pretty special” with the joost ‘platform’ to “me too” by going for flash in the browser?
They were late in the game for the latter and targeting the wrong device with the former, that’s my theory anyway. When the downloadable client wasn’t doing the business they should have packaged it into a hardware offering like Roku, they could have won that one. They’d also have had better peering, a little hardware box is less likely to have the outgoing peering switched off as it was in the client.
Roll out subsidised ingest point p2p source/seed servers to content providers allowing them to run a broadcast model with their own ads. That would have been a better way to get the big name content on there instead of just throwing lots of money at big content owners & promises at small content owners.
I was a fan, hoped for big things but alas, not to be.
I like your headline anyways…
Too much capital. It’s time to close shop and move on. Video white labeling is becoming a commodity.
It wasn’t just a lack of content, their user interface blew chunks. Hulu is much easier to navigate. Joost just made too many mistakes. It is a shame to see them circling the drain, but honestly I almost never visit their site anymore and I was one of the very first people to get an account.
Everyone knows the advent of AJAX and HTML 5 has momentum towards browser supported apps… we saw this start in 2005. Joost was ignorant to try to release a download appliance and that sums up their failure. Also, how do u transition and try to take market share from Hulu?… they should have quit when they heard the term project clownco in the first place looking at what was behind it. Content is King, and you can’t compete with NBC & Fox Joost. Brightcove has cornered the white label market… they had those basis covered in early 2008… in summation kiss your $45MM goodbye Joost. It’s sad, because it was an innovative idea – if only they could have done it with forward thinking technology!!
I think joost was a little bit before it’s time. If joost was released now with the content of say hulu it would have been great. But at the time joost was released the content providers was way to skeptical about online delivery. And they still are if you ask me. As a long long time Swedish spotify user they in comparison added all the content they could, mostly from the pirate bay, and so on, during the beta period. They have later on acquired rights to their music. But since they had all that great content from the beginning people really loved the service and even content providers understood that this was a game changer.
Know the only thing I really miss is a spotify for video. Something I thick joost could have been if they had played their cards better.
But their biggest problem was clearly the content providers. They would have to change the way entire media industry works. Somethings we are slowly seeing now with hulu and youtube but I still think we are years away from any real change. In principle the big networks will go the same way as the big music labels. But that will take time.
Michael, very good insight but really this is guesswork. What would be really interesting if you interviewed, even off the record, the key players that are leaving there, and some of their partners and did some investigative journalism. Suspect there is a ton to learn with this one and it’s not a simple story.
GASP — you used the “j” word in a blog! There’s no journalism in these parts, son. Don’t matter how big you are — in blog land, the slogan be, “We speculate. We decide.”
They deserve to fail. They always acted like they’d ‘made it’ and believed their own hype.
There are many examples of what Joost could have been had it fulfilled its potential (Blinkbox; Hulu; Pirate Bay…). Joost just isn’t one of them.
I think a P2P video client would work if kept off the PC and put in a device you could plug directly into the TV and connect to WiFi or cable.
My kids grandparents would take an extra loan in the house if they could browse my videos of their grandkids between evening news and dancing with the stars.
i remember you talking about hulu in a gillmor gang podcast saying that hulu created a beautiful application, as in aesthetically beautiful. hulu is pleasing to use and delivers shows shows shows.
as for joost, the last time i went to joost i was greeting by a loud talking animation that infuriated me so much that i emailed them and cussed them out and told them i couldn’t wait for them to fail completely and to look at hulu and get a clue.
revenge is sweet!
Shame to see a sucessfull entrprenure dissipate like this, I think Michael Arrington is right either turn your failed product into something innovative or call it a day.
The white label offering does’nt seem to offer a rising tide for sucess, just a waste of entrprenurial time which could be, best placed to invent something that involves passion.
Boxee is on the right path…. allow any source of content and make it very easy to use. They are getting closer and closer to this nirvana.
Simple advise to Joost strategy to show no or less adds and bring the best content.
Really? And how do you pay for that “best content”?
YouTube is estimated to be losing between $100 and $500 million per year. It is tough for any business when your competitor is willing to throw away that kind of cash. With enough investment you can destroy any business. It then remains to be seen if what is left standing can succeed when the investment dollars run out. We will soon see how this plays out in the newspaper business, as we finish working through the funding that drove the 2.0 bubble.
think this came down to timing, or lack of execution speed. Joost was the 1st mover, then dragged its feet and lost that advantage to Hulu. Reality is Hulu was formed as a response to the Joost threat, but Joost just couldn’t execute quickly.
We own a pretty large entertainment site as well and Joost called us 2 months ago and asked us to syndicate their content on our site.
We said sorry, there is no REAL gain for us, they followed up with a email a week or two later stating they will send us a bag of goodies and if our office address was the same.
Hi Mike – Agree with your assessment: star-power CEO, $45M in funding before a product launch is enough of a liability. Throw in some client-side software and the need for entertainment content licensing deals and you’ve got a really scary picture.
While it’s taken Joost much longer to make a strategy shift from consumer to business, they share a similar history to my company, SesameVault. Like Joost, we started out in 2005 believing that client-side software that enabled computers, video game consoles, and other devices to function as media centers was going to be a huge opportunity. However, it quickly became apparent to us that capturing this opportunity was going to require us to do a whole lot more than simply develop some cool software. In addition to developing a server-side platform (later to become SesameVault) to store, manage, and stream content to the devices that were running our software, we were also going to have to go out there and secure licensing deals from the content owners.
So, fast forward to July 1, 2009: Joost announces they are totally ditching consumer to focus on business services. All things being equal this seems like a good shift for Joost: business-focused web video services is a high-growth market, albeit an increasingly crowded and competitive one. However, all things are never equal, especially when it comes to Internet startups. Having spent $45M on the development of consumer software and ad-supported services, and replaced the high-profile CEO with the SVP of Engineering, this looks like a last ditch effort to mitigate an otherwise colossal failure.
Check out our blog for more on the Joost wind-down and the burgeoning video platform market as a whole: http://sesamevault.com/blog
I think the main driving force behind the Joost-hype was how they managed to to renamde video-on-demand to “Internet-TV”, 10 min videoclips to “programs/shows”, and groups of clips to “channels”. With such creative use of words you suddenly have “online-TV” that gives access to “hundreds of channels” and thousands of “shows” from CNN,Reuters,MTV, Discovery, BBC etc. Surely enough to wet the appetite of TV-columnists, entertainment-reporters,techjournalists and bloggers from all over the world.
Add invite-craze (Techcrunch together with Giga OM and some others handed out thousands of invites. Looking for an invite was how I found Techcrunch by the way) into the mix and you got more attention than you will ever need.
Many seemed to just assume, without ever checking, that Joost was just basically TV moved onto the Internet (with some social features added). Anyone who spent more than ten minutes on the site/client knew that just wasn´t the case. Joost was never a laid back TV-experience.
But for a lot of early adopter techjournalists and bloggers that didn´t seem to be a problem. You get the feeling that they didn´t judge what they had in front of their eyes. They didnt compare the Joost-experience to watching real TV (which they definietly should have!).
They were more fascinated with the new technology and potential. And Joost will win because everyone loves TV, right? Yes, everyone loves TV and the more TV-like Hulu is a complete success. But Joost wasn´t TV. The entire content of Joost would easely fit into a few user accounts on Youtube. No real difference, not even quality-wise, because most of Joost content wasn´t “high def”. A full screen youtube clip had exactly the same resolution as a Joost-clip. But the right use of words saved Joost at the time, and no one seemed to care or check anyway.
I don´t really know if there are any real conlusions to be drawn from this but I feel that maybe there is a problem when techbloggers, techjournalists and earlyadopter-types try to judge and evalute a mainstream phenomenon like TV when it hits the Internet. They get caught up in the “wrong” things and don´t really assess the true capabilities or potential of the product. I see the same phenomenon when it comes to music-related services, but thats a different story……
Well said! Sometimes I think Techcrunch is just a melting pot for all things hype on the web…
Isn’t the whole purpose of a blog to provide hype (sometimes positive, sometimes negative) on the very latest developments? You certainly shouldn’t be reading blogs expecting in-depth investigations and analysis…
When real news organizations die, civilization is so doomed.
To Renat Zarbailov:
Thanks!
I want to point out that I think Techcrunch generally handles the balance between hype and honest excitement quite well. And to be fair, the small
amount of relevant criticism aimed towards Joost came from techbloggers and not from newspaper journalists. The most naive coverage of
Joost as a service came from techoriented paperjournalists. .
I also cannot deny that hype, expectations, hope and excitement is what makes the world of internet-startups and the blogs covering them interesting and inspiring. It just got a little out of hand
with Joost. There are other services out there that deserve and need the kind of help and hype Joost got from the world of techjournalism and some parts of the techblogosphere.
The problem with desktop apps is their user experience compounded by a complex security model. It’s a model that is more than a decade old and has not evolved to match the ease of the online experience. Google, Adobe, Microsoft and Mozilla are all trying to solve that, without much success so far. But I believe the line between web app and desktop app will be blurred one day and these debates will become unnecessary.
Their lying to Linux users about a client for that platform was a huge mistake. I received an invitation early on to test the client. Now it appears Joost only wanted to generate buzz with the Ubuntu group.
All discussions on Joost forum about Linux were brushed aside for too long. Bad mojo yo!