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Interesting Read:

"

The agreement between giant Viacom and Internet start-up Joost brings to mind Bill Gates’ prophecy that in 5 years from now on we’ll be laughing at today’s way of watching TV.

I have been among the very few people to test two of the new P2P TV applications, Joost and Babelgum. A comparison between the two is not yet the purpose of this article (although I will write one in the future), but from what I’ve seen by now, they are both killer-apps. Killer as in cable-killers.

Ok, so Viacom agrees to license some of its content for free viewing on the Web (MTV’s Staying Alive shows are already available in Joost's beta-testing version). I have also spoken to some of Joost’s representatives and they have confirmed to me that National Geographic, Endemol, Gamestar, North One, Music Nation, Indy Racing League, World Poker Tour and September Films are among the content providers that have signed contracts with Ianus and Niklas’ new venture. Warner Music Group is also among subscribers.

Now picture this: you want MTV or a movie from Paramount or even a video from Warner. Usually, you grab your remote control, lie down on the couch and start zapping. But that costs you your cable monthly fee.

This is where Joost or Babelgum interfere. They bring whatever content you get from your cable provider to your PC, thus eliminating important costs for both you and the content-owners. You want a larger screen, HD maybe, to watch Beavis and Butthead? No problem, connect your PC to your HD screen and sit back on your old favorite couch. All you need is a good broadband connection and a middle-range video card in your PC or Mac (this is what Kate Larkin from Joost told me: “Online video of any kind inevitably use a lot of bandwidth. The software downloads about 320MB per hour (as a maximum) and uploads up to 105 MB per hour. The more popular the content is on our platform, the more sources it can be pulled from and the less redundant data we send; that number can be as low as 220MB per hour of viewing. Our bandwidth usage is actually comparably more efficient than some others”).

I know, there is no hint yet about a remote control that would interact with Joost’s or Babelgum’s menu (after all they are Web-based applications). But I’m sure the industry will eventually come up with something (actually, in Babelgum the interface is built to resemble a remote control, which you maneuver with your mouse). So again, why should we still pay our cable provider?

P2P Internet TV is totally free, you can access it at any time, record whatever show or movie you like, you can access archives from televisions all over the world in an instant, it’s all there, on the servers. Can you do that with cable providers? Not to mention the social interactions that the P2P TV brings. At least in Joost, you can chat inside the application (for now just Google Talk and some “channel chat”, which I haven’t had the chance to test, since there’s usually no one on it ), you can preview some of the channels that have been recommended by others (for now, just the “Joost picks”, but there will be more in the future). You also get your news delivered in real-time through a news-ticker.

On the official forum, I have even seen a post where another beta-tester of Joost described his experience with the application on… a PDA. He said Joost worked fine, given the limited resources. And now think of the fact that most mobile carriers are bringing TV to mobile phones, using the 3G…Again, why should be pay cable providers?

Let’s think of another aspect now. Joost and Babelgum are ad-driven businesses, which promise to respect the intellectual property of content-owners. They are not pay-per-view applications, they deliver any channel to users without fees because they get their money from advertisement. That means that Viacom, Universal, National Geographic or any other content-owner will be more than interested in joining the subscribers’ club: they won’t pay taxes to cable providers any more, they will have a much broader audience and thus attract more money from advertisement contracts, and they will also have their content protected by copyright agreements.

Think of it this way: I own a TV station; I pay taxes for my employees and I also pay cable providers a fee to include me in their offer; that means that I must perceive a higher fee for those who wish to advertise during my shows; but that doesn’t exactly mean that I get higher profits, it’s just that I must cover my expenses. And I also have to compete with fierce rivals.

Classic TV fights for your attention: breaking news, live broadcasting, etc. - all meant to keep you on the same channel. TV stations compete for audience. P2P TV and IP TV change all that. Audience is much broader, and becomes more selective because the offer is much bigger. Advertisers get what they want: they can to choose to either put their commercials inside TV shows or inside the P2P application itself (switching between programs takes 2-3 seconds in both Babelgum and Joost, and that space could be filled with publicity). Thus prices for TV advertisement will drop, while paradoxically increasing the TV stations’ profit (classic TV will still exist for a while, so they’ll get money from both Web and classic broadcasting). The offer will also diversify: TV stations will most certainly produce shows especially for Web, different from those distributed through the usual cable. But since the first ones will be in HD and free, guess what people will choose?...

Simple, efficient and… deadly for cable operators."

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