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IPTV in Trouble? CTO Changes at Joost and Babelgum

exec shakeupBuilding successful companies from the seed of a startup is usually a long process, one of those things characterized as “more of a marathon than a sprint.”   Joost, and some of their Internet Protocol TV (IPTV) competitors got off to a very fast start, maybe too fast.

It was revealed Thursday that Joost’s CTO Dirk-Willem van Gulik is the leaving the startup next month to become Chief Technical Architect for the BBC.  He’ll work on their sites and likely, Project Kangaroo.

The change may be nothing more than the attrition of a volatile market (tech talent is always in demand).  On the other hand, taking into account the similar departure of rival Babelgum’s CTO in November, it may indicate the honeymoon is starting to end for some IPTV companies.

Joost is filling the void with Matt Zelesko  who will come on as SVP engineering.  Matt was formerly the Vice President of Engineering for Comcast Interactive Media. His roll their included overseeing part development for part of Comcast’s Fancast online video properties.  At one point, Matt also spent a few years at Cisco with Joost CEO Mike Volpi.

When the IPTV buzz got going last year the industry was heavily promoted.  Both Joost and Babelgum raised substantial investor capital ($45m for Joost, $13.2m initially for Babelgum).    Content deals, even partnerships with talent agents, followed.  But so too has followed increased effort from major media companies, tech giants, and established TV networks to build out their own video distribution platforms.   Today, be it on sites like Hulu, or elsewhere, ABC, Fox, Viacom, the BBC and other’s are heavily invested in several different approaches.  Not all of the experiments will last.

As a company that doesn’t own content but instead licenses it from companies who could choose to compete on distribution, Joost is in a potentially precarious position.  Some of their content partners are investors. Aside from the incentive that may provide, however, the strength of Joost’s licensing agreements, which are assuredly not perpetual, is almost the only thing insuring they have a consistent stream of video to show their users.  That, and the success of their advertising program.  If they falter, content partners could move to other distribution strategies.  Then Joost would end up, like the Springsteen song, with “57 channels but nothing on.”

Another concern facing Joost and Babelgum, at least in the U.S., is the potential threat of ISP throttling issues. This practice of slowing down internet traffic is under fire but not yet determined to be inappropriate. Currently, the FCC is investigating Comcast’s practices and looking into the issues.    If they find throttling P2P traffic is reasonable behavior for an ISP trying to “load balance” their traffic, services like Joost could be in trouble.  

There’s not a lot of public data on Joost’s user adoption rates so it’s difficult to assess where they are. Management at startups often changes as a natural result of growth.  It also changes when insiders start to lose faith in long term prospects, or don’t like the conclusion they come to when re-evaluating their risk to reward ratio.   Which is behind this executive shakeup?

No forecast of what’s going on at Joost or Babelgum from here just yet, but other’s are being more forthright. In a recent interview, Jeremy Allaire, the former CTO of Macrovision (now part of Adobe) and current founder of online video service, Brightcove, was asked what he thought of desktop players. His reply was that he was skeptical. He said, "we’ve seen incredibly limited adoption of Joost.  I don’t know anyone who uses it.  It’s not a good experience to have to go off into the desktop to get on-demand media when 10 years of being used to getting instant gratification and contextual framing through the web is just so powerful for users."

With upper management moving around, it’s something to keep an eye on.


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Joost vs. Babelgum: IPTV Startups Duel for Marketshare

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