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Tuesday, February 20, 2007

Viacom's Deal with Joost: What It Means

Viacom is supplying Joost, an Internet video start-up, with "hundreds of hours of programming from Viacom's MTV Networks, Paramount Pictures movies studio and BET Networks," according to Reuters. It'll be available to viewers for free -- though likely supported by advertising.

Why is Viacom partnering with Joost, a video service still in beta, with nowhere near the audience of a YouTube? Joost, which needs a few high-profile content partnerships, was undoubtedly eager to offer sweet, sweet terms to Viacom. "In similar deals in the past, Viacom has received two-thirds of the advertising revenue and other compensation," the Wall Street Journal notes.

Here are the two big challenges facing this partnership:

1. How much will Viacom promote its content on Joost? I suspect that Viacom execs will be more eager to throw Viacom's promotional weight behind Viacom's own properties, like or Why make a start-up more successful -- unless Joost is offering equity to Viacom (which doesn't seem to be the case.)

2. Using Joost requires a special software download. So if I recommend a particular piece of Viacom content to you, you've first got to download the Joost viewing application. How much of a drag is that? With YouTube and other Web-based video services, what bumps up video viewership is e-mailing links, and "embedding" screencaps into blogs. Watching is simple. To me, putting content on Joost seems like having The Police play their reunion tour in series of a suburban garages -- who's gonna see it, and how much potential revenue are you missing?

(Of course, the caveat here is that with Skype, the previous piece of software produced by Joost's founders, is now used by more than 100 million people -- and it required a download. But Skype made it free to do something that had previously been very expensive: make long distance phone calls. There's already quite a lot of free video content on the Net.)

Joost's official launch is scheduled for June 30th.

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