Embedded Joost Will Change The Market
Reports that Joost is now talking to hardware vendors about embedding Joost into set-top boxes and televisions will change the market as we know it. — While Joost is generally now regarded as the leader in the television over internet …
Context & Ripple Effects
A week after coverage of the head-to-head between Joost and Babelgum framed the internet-TV race as a two-horse contest, TechCrunch reports Joost is talking to hardware vendors about putting its service directly into set-top boxes and televisions — a shift from a downloadable client to appliance-level distribution. The Register's pickup under a 'Joost everywhere' headline shows how far the embedding story travelled within days.
The move fits what CEO Mike Volpi has already said openly: he wants Joost to bypass cable companies like Comcast and Time Warner Cable, the same operators he once sold networking gear to at Cisco. It is backed by fresh capital — a $45 million round announced in May 2007 from Sequoia Capital, Index Ventures, CBS, Viacom and Li Ka-shing, with content owners themselves on the cap table.
First-order effects
- If the rumored hardware deals land, Joost reaches the living room without requiring viewers to install or even know about its desktop client, which has already stumbled — the company apologized in May that the application would not launch.
- Cable operators Comcast and Time Warner Cable, explicitly named by Volpi as players to route around, face an internet-TV service riding their pipes while competing with their core video subscription.
Second-order effects
- Babelgum, cast as the number-two in last week's comparison, comes under pressure to match any set-top or television embedding deal or concede the hardware channel to Joost.
- Consumer-electronics and set-top vendors become gatekeepers for internet-TV distribution, able to auction placement among competing services much as they do for other embedded features.
Third-order effects
- Distribution for internet television shifts from software downloads toward baked-in hardware channels, weakening the cable box as the default living-room gateway if the embedding pattern holds.
- With broadcasters like CBS and Viacom investing directly in a delivery startup, content owners begin hedging against cable intermediaries by owning a stake in the pipe itself.
The trend: Internet TV is moving from PC-based clients toward embedded hardware distribution, pulling consumer-electronics makers into the role cable set-tops once owned and giving content owners a direct path to the screen.