Joost Inks Marquee Deal With Viacom

Media heavyweight Viacom (NYSE: VIAb) and Internet TV service Joost have signed a deal for Viacom to provide its content to the fledgling site's distribution platform.

Under the agreement, MTV Networks, BET Networks and Paramount Pictures, among other Viacom divisions, will provide television and theatrical programming for free on the Joost platform.

TV shows expected to debut once the deal is closed include MTV's "Laguna Beach," "Beavis and Butthead," "The Real World," "Punk'd" and "My Super Sweet 16." Comedy Central will provide episodes from "Stella," "Comedy Central Presents" and "Freak Show." BET's offerings will include "Beef The Series," "DMX: Soul of a Man," "Comic View" and "American Gangster." Country Music Television, MTV2, Logo, Spike TV, mtvU, VH1 and Gametrailers.com will also provide content.

Out of 'Stealth Mode'

The deal should put Joost on the go-to list of Web sites specializing in this entertainment-Internet convergence industry.

Formed by Skype's founders Niklas Zennstrom and Janus Friis last year, Joost was code-named the Venice Project -- after the name of the hotel conference room where the initial founding group decided to launch the venture -- until last week, when the firm came out of "stealth mode," as it stated on its site.

Programming on the site, which is still in beta mode, will be offered on a customizable platform with such features as links to more information or related Web sites based on the content. Plug-in applications -- such as instant messaging, message boards and news tickers -- will also be available.

Gathering Customers

Without the Viacom deal, it would have been difficult for Joost to lure viewers away from content on sites like YouTube and Google (Nasdaq: GOOG) -- despite its pedigree.

For instance, to use Joost, consumers have to download software first, which some might hesitate to do, noted Felicia Palmer, CEO of 4Control Media, a video-content provider of red-carpet Hollywood interviews and bloopers.

"Users have gotten used to YouTube, which makes it very easy for the consumer to view content," she stated, adding that shows from MTV and Comedy Central present a very compelling argument for consumers to make the effort to view Joost content.

An Industry Mishmash

Video content for the Internet, or broadband content, has been sized as a US$1.2 billion industry by ABI Research. The firm is in the process of revising its figures this week, Michael Wolf, an ABI analyst, told TechNewsWorld.

"I have no doubt the new estimate will show significant growth," he predicted.

"The major media companies are jumping into this space at a frenetic pace," Stephen Condon, vice president of market at Entriq, a pay media infrastructure management and development firm, told TechNewsWorld. "They all have realized that distributing content with IP is a very flexible and powerful way to spread their brand."

Business models are still under development, and include a mishmash of using third-party sites and their own Web sites as distribution platforms, Condon said. Also, some content providers are seeking broad distribution of their brand; others are seeking to build revenues through an Internet distribution strategy.

YouTube History

Viacom, judging from its history with YouTube, appears to fall in the latter camp. The company has requested that YouTube remove the content that periodically appears on its site, such as clips from "The Daily Show With Jon Stewart." The two firms also tried to negotiate a content-sharing agreement that hasn't work out.

"It's interesting that Viacom snubbed YouTube after these discussions," Wolf commented. "Clearly it wanted more control over the distribution than YouTube wanted or could provide."

The deal with Joost also illustrates that there are other venues besides YouTube, he added.

Diffused Space

YouTube and Google are expected to take action in response to this deal, according to Condon.

"I think we can expect to see YouTube sign up comparable media partners," Condon declared. "I would imagine the Joost-Viacom agreement is an exclusive one, which means Joost would not be providing content from, say Time Warner (NYSE: TWX). So, that might be an ideal target for YouTube."

Nevertheless, such bilateral agreements may not be good for the industry, Palmer noted.

"What YouTube offers -- and that everybody loves -- is content from all sources. If a site only offers a limited source of content, it will always be a niche destination," she concluded.