Why Joost Failed, How Foursquare Succeeded, and Other Startup Lessons
thefastertimes.com
thefastertimes.com
The story goes is that Joost came to studios with $40 mil to get rights to movies. They were told that that a prime movie rights were $10 mil prepay upfront, so they could choose 4 good movies, or a large library of junk. They chose junk, but neither option was viable.
To do business the way they wanted to, Joost was undercapitalized by a factor of 100.
YouTube and Hulu solved content problem differently. One through copyright infringement, the other though being owned by content owners.
To be fair, I think there were some mistakes in technology, but I agree 100% that your main point about content acquisition was the real nail in the coffin.
But using P2P, RDF, Proprietary Server Side Javascript, technology offices in 5 or 6 countries; These are all things that certainly didn't help.
Building on P2P part was built around the premiss that bandwidth would stay expensive, but it didn't. But at the same time, when Joost started, every premium content owner out there wanted realish DRM, so you still would of had a thick client. Later we actually switched to Flash and HTTPS, because bandwidth was cheap, and content owners stopped carrying nearly as much, but the problem of content acquisition still meant we had zero unique content.
Joost couldn't license a TV series for distribution over IP because the producers always have exclusivity deals with networks in each geographic territory.
And whole networks, such as HBO, have exclusivity deal with just a small set of cable and satellite distributors.
It's really sad - delivery of shows over IP is exciting and the whole business is ripe for disruption but the broadcast media empire (the one that has the most to loose) is holding all the keys.
Oh and don't tell me Hulu is the answer. It's just the very same networks doing their own take, on their terms and at their pace of innovation. Hulu Plus: $10/month AND ads? C'mon, if only we had competition.
Perhaps with all of these competing outlets for beaming and streaming content, there could be something of a "mechanical license" for rebroadcasting as they do in the music industry for song remakes. I mean, the content owners (I would think) want their work to be available on any medium willing to give them passive income and consumers obviously are willing to pay, either with money (iTunes) or time (Hulu).
Content owners obviously wouldn't like this for their current "big hits" and blockbuster content, but perhaps a clearinghouse like what Getty or istockphoto does to handle all the "back catalog" content would be something begging for a "technical solution" that a startup could do.
Use case: A person who wants to distribute/broadcast some back catalog content uses an automated system to negotiate and obtain the license for a master file (or one of several redistributable or streamable formats provided by the clearinghouse), then chooses the content. In that way, the creativity lies in the curating of content, and the content owner receives passive income on said content without pain of marketing. It's the resale of content.
Yeah, yeah, it'd never work with those jealously guarded movies and TV shows. But you never can tell, really.
They're catchy, it's hard to describe exactly what makes them work, and if you're lucky, you'll write one your entire life.
What I don't get is why a "hit song" can be considered an entire company. Why is FourSquare trying to raise millions of dollars of investment money? Why not try and come up with another 7 or 8 products?
I mean seriously, what are they looking to become, the next Google? Do they have some sort of BadgeRank algorithm? The next Facebook? Are you going to be able to buy location based ads so you can direct people to your FanBadge pages so you can find out how many people like your Badges?
To me it seems like if investors, instead of investing in a gaming company, invested in just ONE game.
"Here you go, here's $20million, kid. Make sure that Warcraft keeps being the best game. Just keep adding to it, and adding to it, and adding to it, forever."
I'm hoping that FourSquare see themselves as a publisher of fun, little things, and try to develop new, even more fun, little things, and not become a big bloated "what the hell has this thing become" product.
Why users would continually want to publish their location information is beyond me, but if 4Sq has figured out a way to game them to do so, more power to them.
They have a loyal and relatively large user base and a lot of mind and market share. They also have a feature set that most of their competition is now trying to emulate. They seem to be headed in the right direction but their success as a "company" is still to be seen.
Also for perspective, I can't, off the top of my head, think of a mobile geolocation service that I would consider more successful then Foursquare. I could easily be missing something though.