Joost Closes $45 Million in Financing
Leading Venture Capital Firms and Content Owners Support Joost's Global Expansion — Index Ventures, Sequoia Capital, Li Ka Shing Foundation, CBS Corporation and Viacom Participate in Round — NEW YORK—(BUSINESS WIRE)—Joost™ …
Context & Ripple Effects
A week after opening its beta beyond the original invite circle, Joost has converted buzz into balance sheet: $45 million from Index Ventures, Sequoia Capital and the Li Ka Shing Foundation alongside two of the biggest American broadcasters, CBS and Viacom. The Skype founders' P2P video project has been one of the most-watched launches of 2007, and this round is the first hard evidence of how seriously both Sand Hill Road and the content owners themselves are taking it.
First-order effects
- Joost gets the capital to scale distribution internationally while still pre-public launch, and CBS and Viacom move from supplying programming to holding equity in the pipe that carries it.
- The round's composition matters as much as its size: content owners co-investing alongside venture firms signals they would rather own part of the platform than simply license into it.
Second-order effects
- Rival programmers watching CBS and Viacom take stakes now face pressure to negotiate equity-for-content deals of their own rather than settle for per-stream licensing terms.
- Other P2P or ad-supported video startups must raise against a new bar — a nine-figure-class round with strategic media money attached sets the price of entry for credible competition in internet TV.
Third-order effects
- If the pattern holds, internet TV consolidates around platforms financed by the very rights-holders whose traditional distribution economics are at stake — blurring the line between broadcaster and distributor.
- Strategic media investors becoming standard participants in consumer-video rounds points toward a funding structure where network backing, not just user growth, becomes the credibility marker for next-generation TV platforms.
The trend: Television distribution is entering a cycle where broadcasters hedge disruption by taking equity in the platforms displacing them, with venture firms setting the pace.