Online Video Gets a Joost-Boost

Online video service Joost has just secured a major round of funding, which will prove an important platform for them to push their disruptive business model.

Online video is clearly a huge priority for the establishment (i.e. TV broadcasters, movie studios etc), the first generation natives (i.e. ISPs, portals) and the new entrants (YouTube, Joost, Babelgum etc). But just how big a deal is it to European consumers at the moment? Well, online video consumption currently accounts for less than ten percent of time spent online by Europeans and is less than five percent of TV viewing hours. We’re not yet at the stage where online is cannibalizing video, in fact TV hours are just as robust as online hours.

So why all the activity? Well, quite simply, it is where the momentum is. TV broadcasters are jumping in as bold defensive strategy to try to offset the impact of the online upstarts, and to try to tap into the growing demand for on-demand content. For more details on TV broadcasters’ online video strategies see Jupiter’s just published report on the iPlayer, 4OD and UK Broadcasters Revolutionize Online Catch-Up TV Landscape.
The upstarts though consider themselves in a better position to compete for the younger audiences, who they consider to have weaker relationships with traditional linear programming than older demographics. There is no doubt that younger consumers spend more of their time with the web and are having their expectations and perceptions of video and TV consistently challenged. Just looking at what the providers are doing is not enough, to really understand the opportunity for online video, you need to look at how consumers are behaving and what their interests and expectations are.

Jupiter is currently putting the finishing touches on a report that looks at European media consumption and the impact that online video is having, particularly with regards to younger consumers. Watch this space for more details.

One final twist to all this is the role of peer to peer distribution. Some of the traditional broadcasters will be using P2P solution Kontiki and both Joost and Babelgum also use a P2P approach. What impact will this have on the average broadband household? Take a look at my colleague Ian Fogg’s blog for what is likely to be one of many potential stumbling blocks.