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Skype founders unveil global online TV service
2007-01-16
Two Scandinavian entrepreneurs behind free online Skype telephone calls moved closer on Tuesday to launching a global broadband television service. The Joost-branded Internet business, which would be free for users, marks the third start-up by Janus Friis and Niklas Zennstrom. The pair helped revolutionize the market for free telephone calls over the Web before selling Skype to eBay Inc. (Nasdaq:EBAY) for around $2.5 billion in 2005. They also founded the popular file-sharing service Kazaa, which they sold to Australian company Sharman Networks in 2001. Friis and Zennstrom will continue their day jobs at Skype and e-Bay while daily management of Joost is handled by Chief Executive Fredrik de Wahl, who has worked with them before. They have funded the TV business, initially dubbed The Venice Project, using part of the money from Skype's sale. Visitors to the Internet television start-up (www.joost.com) are asked to sign up and test the new service and report problems. Joost bills itself as the first free global TV distribution platform, uniting advertisers, content owners and viewers in a piracy-free interactive service. CEO de Wahl told Reuters in an interview that Joost has attracted content providers such as Warner Music (NYSE:WMG) and TV production company Endemol (EML.AS) plus UK-based September films and U.S.-based Indy Racing League. Advertisers aligned to the site include Deutsche Telekom's (DTEGn.DE) T-Mobile unit, chewing gum and sweet maker Wm. Wrigley Jr. Co (NYSE:WWY) and make-up business Maybelline, which is owned by L'Oreal (OREP.PA), the world's largest cosmetics group. "We are replicating the TV experience," said de Wahl. "We are taking the best of the Internet and the best of TV and putting them on one platform. We do that by combining the high entertainment value of TV with the power of the Internet." LAUNCH IN SIX MONTHS "The three key stakeholders in the market -- the viewers, the content owners and the advertisers all have to be ready for this phase. When we see that coming together, that's when we will remove the barriers of entry and make the (launch) for this. The timing for this is absolutely the first six months of this year," said Swedish-born de Wahl. The company, which has around 100 full-time staff in offices in New York, the Netherlands and London, is focusing on ironing out technical and copyright issues ahead of a launch while also seeking more deals. Joost's pre-launch programing was focused around segments such as music, comedy, sports and documentaries. "We are a true global platform. We don't see ourselves locked into one region. The only restrictions may be content owners that just want their content in some regions," he said. De Wahl said at least 50,000 people were taking part in the site's pre-launch testing, adding that around half of these were users of Apple Macintosh computers, who were waiting to see a version up and running that was compatible with their computers. The CEO said he was confident Joost would grow in a market brimming with video content aggregators where many industry analysts have raised concerns about free-content sites' ability to create profitable and sustainable businesses. "What we fundamentally have done differently to anyone else I have seen so far is we take a completely fresh approach to this and create a business model for all of the three key stakeholders," he said, referring to viewers, content providers and advertisers. "We could integrate a pay-per-view model but we see that has something that will come into the future. Right now everything is for free and advertising supported," de Wahl. User-generated video content is not an area Joost will initially focus on, given problems that arise with respect to copyright, quality, taste and sometimes violent clips -- subject matter that advertisers are not keen to align themselves with.
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