Joost, the Internet television service created by Skype-inventors Janus Friis and Niklas Zennstrom, just announced that five selected parties have collectively invested $45 million in the company. The five are Index Ventures, Sequoia Capital, the Li Ka Shing Foundation, CBS and Viacom. Each party invested in a minority percentage of the company, according to Business Wire and reports by Financial Times Andrew Edgecliffe-Johnson.
Congrats and good luck to Joost! They are certainly in an exciting area, online-video and TV will grow fast in the near future (something we at PodTech know for sure). But, as many bloggers and reporters noted Thursday, the stakes are high.
“The question now is whether Joost can use its publicity momentum — and now, impressive funding — to take on folks like Bit Torrent, which has been playing with peer-to-peer video for sometime, and numerous other Internet TV start-ups,” Matt Marshal writes at VentureBeat.
And at Vecosys Sam Sethi notes the massive competition with Babbelgum, Rawflow, Home Choice, BT Vision and BBC iPlayer all looking a provide alternative means of distributing digital TV.
So what is Joost’s strategy? Since one of us writing here is Swedish (like Niklas Zennstrom), we scanned a few Swedish sources. At business daily Dagens Industri Joosts CEO Fredrik de Wahl says that the company has turned down a number of offers but that these five are “strategic partners who are important to our expansion”.
“Viacom and CBS are important to our content, the venture capitalists are among the biggest in the world and good door openers, Li Ka-Shing will be important for our expansion in China,” de Wahl says.
According to de Wahl Joost – now in beta – will open “for real, for everybody” before Swedish midsummer which is June 22. He doesn’t reveal how much each partner has paid.
“It’s all minority posts, we will not sell out the control of the company”.
Viacom and CBS will provide lot’s of good content to Joost. At TechCrunch Michael Arrington writes that it looks like Joost will be their main online TV play. He also notes that Sequoia was the venture backer of YouTube, which is indirectly a competitor of Joost.
That subject is taken up by Larry Dignan at Between the Lines. He writes that Joost’s “position as a potential YouTube killer has been cemented by $45 million”. Dignan also provides some interesting analysis, noting that Viacom sticks out as a founder since it is has sued YouTube.
“So how did Joost, which is relatively unproven beyond a lot of buzz, land the big dollars,” he asks. One answer is the founders Janus Friis and Niklas Zennström and the success-story of Skype. Further Joost “plans to provide ad-supported copyright protected video. With just a little critical mass Joost could land more content partners,” Dignan writes adding that Joost’s peer-to-peer architecture seems like a better way to manage bandwidth. And CBS and Viacom will do all they can to make sure the startup is a hit since “old media needs web outlets other than the ones controlled by Google”.
During the ongoing test-period we have noted some sour comments when it comes to Joost’s content. We’re eagerly awaiting what the new partnerships could bring – with popcorns in our hands.
By John Furrier and Tina Magnergard Bjers