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Wednesday, March 07, 2007

Is The Internet Killing Television?

March 06, 2007 / 17 comments
Internet Killed The Television Star: Reviews of Joost, Babelgum, Zattoo, and More Written by Josh Catone of mockriot and edited by Richard MacManus

Television is big business. No, let's not understate it: television is very big business. The global broadcast and cable television industry generates billions of dollars worldwide annually from subscription, equipment, advertising, and service fees; and is dominated by huge media conglomerates like General Electric, Viacom, News Corp., and Disney. The new kid on the block is Internet Protocol TV (IPTV), which sends television signals over the Internet - and the early forecasts are bright. Research firm iSupply predicts that IPTV will be a $26 billion industry in 2010, while Gartner says that 3 years from now IPTV will have the attention of 48 million pairs of eyeballs.

This post looks at 3 new IPTV startups (plus a couple of "sort of IPTV" websites) that have been gaining steam over the past few months. Analysts and pundits view these companies as competitors to the cable industry, far more so than video sharing sites like YouTube.

Joost, which is currently in closed beta and was initially known as The Venice Project, is the big new kid on the block. They got the most media coverage of all the startups profiled here (26,527 mentions on Technorati -- none of the other sites here crack 1,000) and they have deep pockets by virtue of their founders, Kazaa and Skype creators Janus Friis and Niklas Zennstrom.

Joost is a software product that uses peer-to-peer streaming technology to deliver data in encrypted packets, which are then cached the way your browser caches web content. The cached content is then sent along to other users. Joost differs from traditional TV in that its content is all 'on demand', meaning you can download and watch video whenever you want - not only when its 'on.'


While the content on the Joost network right now isn't very extensive, content is one area where the product should excel. Friis and Zennstrom are aggressively pursuing content distribution deals with major media companies. In February, they announced a partnership with Viacom that will put content from MTV Networks, BET, and Paramount Pictures on Joost.

Currently, Joost's content is strong - but limited. Joost boasts 23 channels, including a lot of commercial content - although each channel only seems to have a handful of programs. They have a number of music channels, some dedicated to specific artists, such as, 'Green Day,' 'Red Hot Chili Peppers,' 'The Diddy Channel,' 'Atlantic Street,' and 'Warner Bros. Records.' These channels show mostly music videos, documentaries, and live performances. 'Fifth Gear' is a channel on automobiles and shows short clips about expensive cars, while 'Saturday Morning' shows old cartoons (mainly 'Rocky and Bullwinkle') and the 'World's Strongest Man' channel shows clips of events from the Met-RX World's Strongest Man competition.

The channels that held my attention longest were probably 'National Geographic' - which showed full documentaries from the National Geographic cable channel - and 'IndieFlix Premiere Hits', which showed full length independent films.


The user interface of Joost is non-traditional. When you start up Joost, it opens full screen. Controls appear when you hover your mouse over any edge of the screen. On the right edge is a button that allows you to open up the channel guide, on the left is a button for 'My Joost' - which accesses your widgets (more on them below). On the bottom of the screen are video controls.

The video controls are fairly standard: play, pause, skip to next/last program, and volume controls. You can also change channels, or skip ahead to a specific program (not just the next or last), and get info about a program or channel -- not unlike the controls found on digital cable and satellite services. The video control bar also includes a search box, that allows you to search by keyword for specific programs, or programs on a certain subject (although this is fairly limited, with such a small program catalog).

Joost's channel browser is easy to use. You scroll through channels with up and down arrows, and you can get a list of specific programs prior to committing - so you can select a specific program to download.

Joost also has a fairly extensive preferences screen, allowing you to fine tune the user interface by changing things - like the delay before the toolbars reappear when you hover your mouse near the edge of the screen, and whether or not you start in full-screen mode.


Widgets are something that only Joost has and really sets them apart from the other IPTV providers. Widgets are extensions that add extra, non-television functionality to the Joost program. Right now, Joost's selection of widgets are: Notice Board (news about Joost), Instant Message (chat with Jabber or Gmail users from within Joost), Rate (rate programs), Channel Chat (chat with other users watching the program), News Ticker (an RSS reader that you can use to track outside feeds), and Clock (uh, it tells the time). The widgets are all very easy to use and work well.

Widgets are a very smart addition to Joost. They offer a social aspect to Joost that other startups don't have, allowing users to interact with the content and each other. Further, they minimize the time you are forced to leave Joost in order to get things done.

Joost may be the biggest fish in the pond, but Babel Gum is a very able-bodied competitor. Founded by Italian billionaire Silvio Scaglia (of FastWeb fame), Babelgum is another on demand IPTV software program that looks and feels remarkably like Joost. While they haven't gotten nearly as much press as Joost, they have offices in 4 countries, and they don't seem worried about Joost. "When I started work on this a year and a half ago I was afraid we'd end up with five [competing IPTV services]," founder Scaglia told the Financial Times in January. "The fact it's still two probably gives us a good lead." Babelgum is currently operating in closed beta mode.


Content on Babelgum right now is extremely limited. There are only 9 channels available to users. These are mostly made up of amateur or independent content. Amongst others, there is a News channel that shows news from the Associated Press, a Cartoons channel (which has some pretty neat indie cartoon shorts), a Blogs channels that shows episodes of Rocketboom, and a Trailer channel that shows movie trailers.

Babelgum is trying to entice content owners with a pitch on their site. They call Babelgum "an ideal platform for content owners to serve directly the Long Tail of viewers’ interests not addressed by today’s broadcasting television networks." They don't charge anything to distribute content and promise payment of US$5 for each 1000 unique views, of any clip put on their network. This seems like it might be a good deal for amateur content producers, but it likely won't attract the mainstream media companies (which I'm not sure Babelgum is really trying to do anyway).


Babelgum's interface is very much like Joost's. Video controls are on the left side, but can be moved any way. The standard volume, play, pause, forward and back are there, but unlike with Joost there is no way to scroll through channels and find the program you want before switching. You also can't rewind programs the way you can in Joost (perhaps the content on Babelgum isn't being cached?). Rather disappointingly, Babelgum only comes in two sizes : full screen, and not full screen. While in not full screen mode, you can't resize the window.

The channel browser in Babelgum is easy enough to use. You access it by pressing the "TV" button along the bottom of the screen, or on the video control bar. The browser lists channels in grid format by default, or in a scrollable one-per-page view. This is easy enough when there are only 9 channels, but when there are more, I am not sure how well this format will scale. You can, however, create custom lists of your favorite channels -- rather useless at the moment, but could be helpful if there are ever hundreds of channels. In rather annoying fashion, clicking on a channel doesn't do anything -- you have to click the green 'play' button to load up the channel, or click 'more info' to get a listing of programs and description of the channel. Babelgum's channel browser is more visually pleasing than Joost's, however, and the channel and program descriptions are far more complete.

Babelgum doesn't really offer any more features to speak of. There is a button on each program page allowing you to save it to a "Video" section (sort of a favorites lists), which is something like TiVo for IPTV. But since everything is on demand, this may have limited usefulness. You can also rate programs from the channel browser.

Swiss startup Zattoo is taking a different tack towards IPTV than either Joost or Babelgum. Currently only available to users in Switzerland, Zattoo is a software product that streams actual broadcast and cable television networks, rather than operating an on demand service. Though Zattoo is only available in Switzerland, they are based in Ann Arbor, Michigan, USA.

Content is where Zattoo really excels, offering over 40 channels to its Swiss users. They plan to expand into other countries as they sign content distribution deals with media companies that allow them to do so. The channels they offer are mainstream broadcast and cable stations - such as BBC World, CNN International, Canale 5, Viva, and Italia 1. Many of the channels are in German, French, and Italian, making them rather hard to understand for a unilingual American like myself (though I did enjoy watching episodes of 'The Nanny' in German and 'Step by Step' in Italian), but the quality of the programming on these channels is top notch.

The interface of Zattoo is very simple and more traditional, looking a lot more like a Windows or Mac program than the others. Because Zattoo is streaming actual TV stations, there is no need for video controls. Zattoo's interface is adorned with just volume and screen size controls. The channel browser loads on the side of the application and is, like the rest of the app, very simple and easy to use; it can be hidden with a click.

Since Zattoo is showing real streaming TV, it would be a very welcome addition if they added a channel guide showing what was on, and when.

ChooseAndWatch and Free Tube
ChooseAndWatch and FreeTube are nothing like the three programs previewed above, but nonetheless they warrant a brief mention in the conversation. They are sites that aggregate streaming video channels from around the web, from a mixture of mainstream TV channels like ESPN, ABC, Al Jazeera, and the BBC; to more amateur, independent networks. FreeTube claims to have 324 channels, while ChooseAndWatch boasts "more than 250." However, due to using ActiveX controls to launch the video applets, and a mish mash of formats (i.e. some channels use QuickTime while others use Windows Media Player) the sites both suffer from browser incompatibilities and channels that just plain don't work. From a content selection standpoint, however, if legal these sites beat Joost, Babelgum, and Zattoo hands down. A word of caution: both websites offer adult content areas.

It's too early to say who will come out on top in the IPTV battle. From a strictly technological standpoint, Joost's offering is the best out there right now. But Babelgum offers a solid product as well, so it will ultimately come down to content.

Zattoo currently leads the game on content, but being only available in Switzerland will obviously keep them from growing very fast. Also being a strictly live streaming service (not on demand), Zattoo may not be compelling enough to divorce people from their TVs.

The IPTV marketplace is heating up and these early startups have so far impressed. That all three software startups profiled above are finalists for the Red Herring 100 Europe 2007 award is proof enough of that.


  1. The real key to any of these IPTV solutions will be bandwidth. Those that can get the most bandwidth, like Joost, or YouTube combined with Rivulet technology, will wind up offering the highest quality video. If ISPs start using technologies like numetra's to throttle back the bandwidth available, then it is going to wind-up being who can pay for the premium bandwidth -- probably through the best advertising model -- not who has the slickest technology.

  2. The interesting thing about all these "web IPTV" plays is that they don't have the premium bandwith a real IPTV system as offered by the broadband ISPs. Hollywood appears to be coming to the rescue. They recognize that declining TV ad revenues, piracy, and alternative Internet delivery systems like YouTube will eventually destroy their oligopoly. They're going to insist that, in effect, these other plays will be rate limited and only their content will get the high quality bandwidth. Witness what their doing with InterStream and in requiring the ISPs to use nuMetra's technology. Although some of the other plays are using many of the same techniques like Rivulet and EdgeStream, Hollywood will demand that their oligopoly is maintained by specifying how the ISPs pipes are provisioned and for whom...


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