Restructering at Joost

imagesThis week announced it would stop offering it’s Web TV services. It has decided to change it’s core business, laying-off 70 of it’s 90 employees. Furthermore the press release stated that the CEO, Mike Volpi, would step down and that Matt Zelesko will take over.

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.

Joost has been forced to change its business model by three main causes.

First of all the gap between Joost and it’s biggest competitors, Youtube & Hulu, in terms of visitor is enormous and is increasing.

Take for example the amount of unique visitors the three sites had over the last year.

Second point is that video portals have difficulties in finding a profitable business model. Advertisement alone rarely covers the costs and so most Tubes have been forced to close deals with large sponsors. Youtube is for example now a part of Google and Hulu is backed by a group of TV Studios. And worse, advertisement rates have been falling because of oversupply, adding further to the pain.

The last cause was the biggest content providers have launched their own video services. In fact, Hulu is here a clear example of.

So, what now? Joost decided that they are going to transform into a technology provider.

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 and its associated video applications.

It will be difficult task, because there are some big competitors in this field.

In entering the online video platform business, Joost will face competition from several other major companies, including Adobe, Akamai and Brightcove.

Will they be able to pull it off?


~ by sendvideotomobile on July 5, 2009.

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