Making Sense of all the Noise

Larry Kless · July 4, 2009 · Short URL:

Sobering news about the demise of Maven Networks and restructuring of Joost

The last two days have been full of sobering news about the demise of Maven Networks and restructuring of Joost. While many have seen the writing on the wall for Joost who seemed to struggle to get a solid footing in the online video landscape as it changed its business model over the last few years. It reportedly burned through its $45 million in venture capital and has drastically slashed operations and shifted focus to provide "white label online video platforms for media companies, including cable and satellite providers, broadcasters and video aggregators."

"In these tough economic times, it's been increasingly challenging to operate as an independent, ad-supported online video platform," said Mike Volpi, who has stepped down as CEO of Joost as part of the reorganization but will remain Chairman of Board. "After much analysis, we have decided to change our focus and to start providing white-label online video platforms for media companies and distributors," Volpi added. "We have built a solid technology platform that there is demand for in the marketplace, and look forward to this new chapter for our company."

It wasn't too long ago that I reported the Joost-Ooyala hookup that Joost would be leveraging Ooyala for uploading, transcoding, content management services, and analytics and just prior to that Ooyala had tapped Mike Volpi to Ooyala's Board of Advisors. So when Joost announced they were shifting gears to be an online video platform Ryan Lawler asked, What Does Joost's News Mean for Ooyala?, and that as Joost positions itself to offer the same video management services as Ooyala, "Should Volpi remain on the board of two companies that are essentially competitors?"
Ooyala CEO and Co-founder Bismarck Lepe said in a statement, "We are still very excited about having Joost as a customer. They signed a long term agreement and we are here to help them as they continue to evolve their business and throughout this transition period. One of the things we've always been to Joost is a technology services provider for a small segment of their publisher base. While they move in the direction of being more of an enablement company, they'll continue to use our tools and services in order to provide high quality video experiences for their customers."
About Volpi's role on Ooyala's board, Lawler said, "Some folks think he should step down from Ooyala's board. David Wadler, CEO of Twistage -- a company that, not coincidentally, also competes in the online video infrastructure segment -- even suggests that Volpi might have a fiduciary responsibility to do so." However Lepe had this to say, "Most of our Board of Advisory roles are are between one and two years. For now, we are very happy with the relationship with Mike and his organization."
For online video platform Maven Networks, which was acquired by Yahoo for approximately $160 million only 17 months ago, Techcrunch reported that it's now officially in the deadpool and that Yahoo plans to shut it down. Anthony Ha got confirmation that while Yahoo is ending its Maven Network contracts it is not abandoning the technology as Yahoo spokesperson Brian Nelson said in a statement, "While video initiatives remain a priority for Yahoo!, both for its consumer and advertising experiences, we are increasing investment in some areas while scaling back in others. After careful consideration, Yahoo! is planning to wind down its Maven Networks contracts. This decision will allow us to focus our resources on the continued improvement of our core video offerings, such as enhancing the consumer video experience on Yahoo!."
Nelson also noted that since Q4 2008 Yahoo! has closed or announced their intention to close nearly twenty Yahoo! services such as Y! Live, Jumpcut, Yahoo! 360, GeoCities, My Web and Yahoo! Briefcase and will continue to evaluate their portfolio.
While this is sad news for the many people who have lost their jobs it's inaccurate to say that other online video platforms are celebrating as Robin Wauters suggested, "There’s always the possibility that the platform will eventually live on under different ownership of course, but rest assured that competitors like Brightcove, Ooyala and KIT Digital are currently celebrating over the news."
Scott Broomfield, CEO of Veeple, thinks that all the doom and gloom reporting about Joost and Maven is just noise and that failing is not failure but part of the innovation cycle. Om Malik offered his analysis of what went wrong with Joost and quoted the NewTeeVee crew who he said summed up the situation very succinctly “Becoming a white-label video provider was what a business did when all other strategies failed.”
However, Ben Homer offered some advise for Joost and other companies in the online video space on how to succeed they need to be able to behave like agencies and focus on best-in-class service offerings, relationships, controlling costs and providing value to advertisers. I would add that emphasizing value and not just capabilities will be important for online video platforms to differentiate themselves in the saturated market.

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