As of today, Joost will no longer be the free online video on demand service that we know of today. They will no longer only offer demand videos for free and will be severely cutting their staff by approximately 70 people and will shut down their development facility in the Netherlands. They will be focusing more on delivering their technology to content creators and putting less focus on the Joost website as a whole of the company. Joost was originally started in 2006 by the former founders of Skype, Niklas Zennstrom and Janus Friis. They were among the first to sign online content distribution contracts with large media firms like CBS and Viacom.
In a short blog post earlier this week, Mike Volpi the current CEO stated,"Today we’ve decided to make some changes at Joost. In these tough economic times, it’s been increasingly challenging to operate as an independent, ad-supported online video platform. In order to position ourselves well for the future, we began investigating additional lines of revenue for Joost.After much analysis, we have decided to change our focus and to start providing white label online video platforms for media companies and distributors. We have built a solid technology platform that there is demand for in the marketplace, and look forward to this new chapter for our company. At the same time, we’ll continue to operate Joost.com and its associated video applications.Unfortunately, as a part of this change, we will say goodbye to many of our colleagues and friends. This is obviously disappointing and sad – it’s never easy saying goodbye to coworkers, especially when people have poured so much of their time, talent, effort and emotion into a company. We appreciate the contribution that all of our employees have given to Joost, and wish them well in the future.Thank you for all of your support."
As a part of the restructuring of the company, the current chief executive Mike Volpi will step down from his position, but will remain as the chairman of the board.
Taking the reins for Volpi as CEO is Matt Zelesko, who was most recently Joost's senior vp of engineering.
One of the biggest problems that Joost had was that it originally required the user to download a player application that would then allow them to stream content over the Joost network. This severely hurt Joost as many of their competitors, namely YouTube and Hulu both do not require anything more than flash player to be installed. They eventually shifted over to a streaming content with no necessary application download, but that came too little and too late. Joost did not feature user-generated content but instead had struck deals with content providers such as CBS and Viacom to deliver high-quality video through peer-to-peer technology.
In addition, it was far from a household name. Many people were simply not aware of the fact that Joost existed and then once they found out that it did, they were greeted with the fact that they had to run an application on their computer to view it, while YouTube did not require this. Simply put, they needed some kind of killer content in order to make themselves known and useful to the community. This simply did not happen. Joost also had the problem that the majority of their content was not fresh and new, much of their content was older and outdate as opposed to YouTube and Hulu who both have fresh new and relevant content updated daily.
Overall, it is never really good to see a company that offers a free service go but sometimes they never really made a big enough of an impact to really make a difference. Joost will be shifting over to delivering content delivery services to media outlets and most likely become a paid service. In addition, we expect them to slowly bring down the content and bandwidth of Joost.com and eventually get rid of it altogether.
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