Sunday, March 25, 2007

TV is Dead, Long Live TV

I managed, this week, to get an invite to be a beta tester of Joost , the ipTV platform which has been getting a lot of coverage recently. The technology has arguably the perfect pedigree - the backing of the founders of KaZaa and Skype. They are currently in a restricted beta phase, with the intention of launching an open beta in the near future followed by a full launch later in the year.

Joost™

Joost involves a quick download and installation. It will, eventually, offer consumers the opportunity to watch video on-demand, for free, over their computers. From a content owner point of view, it will offer low cost, secure, distribution over the internet. The platform will be ad-funded, with revenues shared between Joost and content providers. In theory it will offer advertisers a large global audience of viewers segmented by country and whatever demographic categories Joost manages to maintain.

Streaming video's future is a complicated collection of competing offerings and it's difficult to really assess what is likely to be successful. TV Channels have made some effort to respond to the growth of P2P filesharing and YouTube with limited success. NBC while it restricts its content to the US, offers a pretty comprehensive ad-funded video viewer on its site. In the UK, broadband companies and a couple of the TV channels have made attempts to broadcast over the internet. In all cases, the platforms cost money and are restrictive. YouTube, for all its growth has yet to prove that it can sustain its popularity.

iTunes made rapid and successful headway into the music market and offers a compelling alternative to 'piracy' and to music stores by being convenient, relatively comprehensive, competitively priced and offering more than P2P sites (e.g. album cover images).

Will Joost be the iTunes of video? It certainly looks like the most likely contender at the moment. Its P2P model should make it relatively economical to maintain (as opposed to YouTube which must cost an absolute fortune to keep in bandwidth). Assuming there are some improvements in the interface and the image quality it should offer a more enjoyable experience than television (even Sky+ and TiVO). Advertisers should, eventually, see an attractive concentration of audiences.

It also has the potential to deliver on the failed promises of interactive television. Rather than suffering through the extended load times following the push of a red button, users will only have to move their mouse in order to make ads 'interactive'. This feature will allow for easy response mechanisms and follow ups, or delivery of further content.

Joost

Having played with the software, read some of the coverage and met with their sales team I'd say that Joost looks likely to have a significant impact on video over the internet. They have a number of hurdles ahead of them but all look surmountable. The technology is adequate and will almost certainly see significant improvements. There isn't yet that much to watch but more content providers are likely to follow, especially as Viacom is now signed on. They'll need to grow their audience, but are likely to do this with relative ease once the technology will sustain it. Finally, they'll need to sign on advertisers. Assuming they reach a critical mass of viewers globally and in key markets, this should be manageable. They have (noble and justified) ambitions to have advertising content adapted specifically for the platform which may complicate their selling job, atleast in the near future.

Joost is definitely one to watch.

Thursday, March 08, 2007

Ad-funded Software

I've had two meetings recently with companies that are experimenting with ad-funded software from either end of the spectrum.

The first was with Spiceworks , a company that has developed an IT management package for SMBs that is ad funded. It seems like a great idea. By the sounds of it they have a good piece of software with a loyal and growing user base who have significant influence on IT purchasing. (If anyone has used the product I'd love to hear their views on it). The software is browser-based and the advertising can be served through third-party ad servers. They don't yet have a great deal of European usership but I'm keen to try them out at some point.

At the other end of the spectrum is Microsoft. They're now selling advertising on their Office Help pages . Office is not going to be entirely ad-funded in the near future but it is an interesting development. Steve Ballmer was extremely pro-advertising when he was in London in October.

MS Office help is not, currently, as compelling a place to advertise as Spiceworks. There are better environments to advertise in and the audience is not as refined and specific as Spiceworks. It does make me wonder how long it will be before other non-media brands monetise their web traffic through advertising. E-commerce is the new in-store.