Wi-fi TV shows on iPhone give Joost a boost

LOS ANGELES -- Web video service Joost is looking to the iPhone for a big comeback.

Joost was one of the first services to take the idea of watching TV shows online. But after launching last year to much fanfare, it was eclipsed by newer sites such as Hulu and Veoh.

Earlier this month, however, Joost got a head start on its competitors with a free iPhone application that lets you watch TV shows from CBS, Comedy Central, Warner Bros. and Sony at no charge over a Wi-Fi connection.

It is already one of the most popular iPhone applications. Joost CEO Mike Volpi hopes it will encourage folks to take a second look.

"Ten million people have iPhones," says Volpi, on a recent trip to Hollywood to meet with networks about working with Joost. "We want to give them an application where they can get to know us, and hopefully get them back to our website."

James McQuivey, an analyst at Forrester Research, says Apple's iPhone is Joost's ticket from oblivion. "The only way to get a lot of licensed content on the iPhone now is to buy it at iTunes," he says.

Apple sells TV shows at iTunes from the major networks for 99 cents and up. The company says it has sold more than 200 million TV episodes in the past two years.

Still, the future for digital TV viewing isn't in such paid downloads but in the kind of experience we've been accustomed to since the 1950s — advertiser supported, McQuivey says.

"Just look at the numbers," he says.

According to market tracker ComScore Media Metrix, Hulu, which launched publicly in March, showed 200 million videos in October, or as many shows in one month as Apple has sold in two years, he notes.

For now, Joost has a good ways to go to catch up to competitors. It showed only 272,000 videos in October, according to ComScore.

However, Joost is on the upswing. It saw 564,000 visitors in November — up from just under 100,000 in July, market tracker Quantcast says.

McQuivey is so bullish on folks watching TV shows with commercials online that even in the economic downturn, Forrester projects $900 million in video advertising on sites such as Hulu and Veoh this year, growing to $1.7 billion next year.

Peer-to-peer roots

Joost was created by Niklas Zennstrom and Janus Friis. They're the guys who developed Kazaa, at one time the world's most-popular unauthorized music-sharing application. They also created Internet phone service Skype, which they sold to eBay. (Zennstrom and Friis are no longer managing the company; they remain on the board of directors.)

Both Kazaa and Skype used peer-to-peer technology, which links computers together to move big files efficiently across a broad audience. With Joost, they also thought P2P was the answer to moving huge video files.

But then technology changed. Video files became easier to compress, and broadband networks got better at moving video, McQuivey says.

Shows on Joost couldn't be viewed unless you downloaded an application. That was a tough burden to overcome, because many folks are resistant to putting additional software on computers.

Meanwhile, new website-based TV services launched from Hulu, Veoh and Fancast — along with network sites from CBS, NBC, ABC and Fox. All attracted millions of viewers without asking them to download anything.

In October, Joost finally joined the trend when it relaunched as a Web service. It has since shut down its old P2P applications. The only way to see Joost now is via the Web or iPhone.

When Joost was just a gleam in its creators' eyes, "There was virtually nothing available legally online in TV," Volpi says. "It's been an amazing transformation in just two years."

Joost's next challenge is programming. While it has the big shows from CBS, they're also available on most TV sites, such as Veoh, Fancast and the new Sling.com. Those sites also all have deals to present shows from NBC and Fox.

That's what brought Volpi to L.A. in early December, to meet with networks to persuade them to put their shows on Joost.

"I want to show them that we now have a successful site, that we're innovative and that they can make a lot of money by putting their content on Joost."

Positives and negatives

He also got to show off the iPhone application, which is a typical early-adopter good news/bad news proposition.

The positive is that iPhone users now have free access to a large collection of prime-time TV shows and other fare for the first time on the device.

The negative: You have to be in a Wi-Fi zone to get it.

Joost's application doesn't work on Apple partner AT&T's 3G phone network. That means you can't access TV shows if you're standing in line at a movie, waiting for a live sporting event or sitting in the back seat of the car and bored silly — unless there's Wi-Fi.

Volpi says this is because he doesn't have full mobile rights to the licensed TV shows. He predicts he'll get 3G rights soon, as well.

Meanwhile, Joost got a boost by being first out of the gate with a TV application for the iPhone, but McQuivey predicts it won't have the market to itself for long.

"You can bet that every other media company is looking at this, and saying, 'Why aren't we there?' "