Joost, the internet TV platform being developed by the influential creators of Skype and Kazaa, has signed several new content distribution agreements, including one to show CNN programs.
Joost's strategy is to deliver content at no charge to viewers. The business model is to charge advertisers on a per-view basis, and to share the revenue with content providers.
Content is distributed by streaming video "peer-to-peer," or user-to-user, over the Internet. Consumers choose a channel via a software interface on their desktop that resembles a remote control.
Joost's global advertisers include Coca-Cola, HP, Intel and Nike, while US viewers will also see ads from companies including Electronic Arts, Garnier, Kraft, Microsoft, Motorola, Procter & Gamble, Sony, Taco Bell, United Airlines, the US Army, Visa, and Wrigley. For European audiences, the company has signed General Motors Europe (Opel/Vauxhall), IBM, L'Oréal, Nokia, Virgin Money, Vodafone, and Warner Bros.
The overwhelming response by high calibre launch partners proves that TV is a rapidly shrinking market. Advertisers are aware that the TV audience is slipping away to the Internet, especially amongst the younger generations. People want to watch their content, when they want it, and how they want it. The first part of this equation Joost understand, however the second is completely missed as evidenced by Alberdingk Thijm's following comment.
"The company is still experimenting with when and how it will run ads, including short advertisements before or after programs, traditional 30-second ads in the middle of longer programs, and more experimental ideas such as ads that appear on the screen briefly and then fade away while a program is running. Overall there would be less advertising than on regular TV."
Joost seem to think that the option of more invasive advertising over the top of content is acceptable. What they haven't come to accept yet, is people are abandoning TV because the internet currently provides content that is free of advertising or the ability to filter it. In the beginning of course there will be less advertising, but we all know what comes later. Traditional TV started out the same way.
Joost is seen as one of the many candidates to become a distributor of television and video to the Internet, competing against Google Inc.'s YouTube, Revver, broadcasters' own websites, an as-yet unnamed cooperation between General Electric Co.'s NBC and News Corp, and file-sharing programs such as BitTorrent, among others.
What they will have to come to accept is that rehashing the same old advertising models on the Internet will not work. The average Internet user has a notoriously short attention span, because they know they have choice, surf off elsewhere or respond (blogging, social tagging). The quantification of audience attention is also immediately apparent through server statistics.
The Internet is a far more responsive environment. I would not use the descriptions of interactive or democratic as touted by some web evangelists.
So if the large content providers want to stem the flow of unauthorized video content appearing on the Net, and monetize the new media, they'd better take a look at the lessons currently being learnt by their music counterparts with Digital Rights Management.
Listen to their audience.
