The Clock is Ticking for Joost

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picture-233.pngThere’s a time bomb out there with Joost’s name on it. Full-screen, broadcast-quality video streams—the main selling point of Joost’s peer-to-peer Internet TV client software—is quickly coming to the Web. Brightcove will soon be offering such streams to its video publishers using BitTorrent DNA. But the real threat to Joost will be coming from Adobe and its ubiquitous Flash player.

Sometime in the next few months, Adobe is expected to incorporate the H.264 codec in all Flash players with the general release of Flash Player 9. You can already download a beta version from Adobe Labs. The H.264 codec is part of MPEG-4 and is the codec that Apple uses to compress all of the video downloads on iTunes. Once H.264 is part of Flash, the quality of streaming video on the Web will roughly double at current bandwidth speeds. That means YouTube videos will look twice as good—and those will likely remain on the low end in quality.

Every video site on the Web (and quite a few that are still in stealth) is just waiting for Flash Player 9 to be distributed widely and become the new standard. That will allow them to launch their own full-screen Internet TV services with video streams that are just as good or better than Joost’s, and that will require nothing more than a regular browser to watch.

Joost’s greatest asset right now is not its peer-to-peer technology. It’s the momentum it’s gained so far by being an early mover. When Joost finally came out of its private beta on October 1, it had already signed up one million beta users and seeded its network with 15,000 shows. But the vast majority of that video is not exclusive to Joost. All the Internet TV services are lining up the same content. And better-quality video is not going to remain a differentiator for long.

As compression technologies get better, video sites will be able to dial up the quality of the video streams. Joost’s P2P approach is not a benefit to the consumer as much as it is a benefit to Joost (because it offloads the bandwidth costs of the most popular video streams to the users themselves). But streaming video on the Web is about to get a whole lot cheaper—and as Web video advertising takes off, a whole lot more lucrative. Some people argue that once the economics kick in, centralized Web streaming will offer a better, more consistent viewing experience than P2P streaming. That’s why H.264 is so important. It will change the economics of streaming.

Joost’s only remaining competitive barrier will be its network of viewers and their interactions among each other, along with the third-party apps built around it. If viewers feel that the experience of watching videos on Joost is more social or pleasurable than watching streams by themselves on the Web, maybe they’ll stick around. But social features are not exclusive to Joost, and neither are its platform ambitions. The slam-dunk days for Joost will soon be over.

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