Joost seems to heading ever closer to death. It’s refocusing on becoming a white label video provider, is letting go of most of its staff, and has lost Mike Volpi as CEO. Less than three years after being founded, the Joost story looks set to come to an end fairly soon.

Everything In Place

Joost seemed to have every chance of succeeding when it launched as The Venice Project in October of 2006. Early hype made it a much in demand start-up, with everyone wanting to test the new high quality, on-demand video streaming service out. Which they did in their droves thanks to an invite-only beta.

The funding was also there in place, with $45 million raised from some big names including Sequoia Capital, Index Ventures, Viacom, and CBS. It was Hulu before Hulu was even a twinkle in its shareholders eyes. Success seemed guaranteed but clearly nothing is guaranteed in the world of technology.

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The Pirate Bay has sold out, to a Swedish company no one has ever heard of. The acquisition has been confirmed but the future of the site is still mired in confusion. Could this be a Napster moment for the file-sharing community, or could this actually be a good thing?

Things happen fast in the world of peer-to-peer torrent tracking. Just a few days after unveiling The Video Bay, a new streaming video site based on open source video standards, The Pirate Bay had even bigger news to announce this morning: it’s selling out.

Sold Or Sold Out?

The Swedish press broke the news story first, forcing The Pirate Bay to confirm the truth in a blog post earlier today. The Pirate Bay has been bought by Swedish software company, Global Gaming Factory X AB.

The price, a cool $7.7 million, is enough to pay the $3.6 million in fines racked up by the four co-founders of the site in their recent court case, and have enough left over to ensure they never have to work again, or at least be able to walk away from the whole thing better off than when they began.

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Big-hitting and ever-popular shows such as The Simpsons and CSI now carry a higher advertising rate on the Web than they do on television. Is this the moment we have been waiting for - when the digital revolution starts to pay for itself?

I Have A Dream

It seems as though everyone, with the exception of the cable companies who need the status quo to continue in order to make money, is keen for online video to fulfill its potential and herald a new revolution in this digital age. There are just a couple of problems, huge problems at that, to overcome before this dream becomes reality.

One is for content creators and copyright owners to realize the world is one place connected by the Internet, rather than a fragmented jigsaw puzzle. Which means making Hulu viewable outside the States and the BBC iPlayer viewable outside the U.K. The other, even larger, problem, is how to make Web video profitable without scaring viewers away by charging the earth for streaming content.

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Everyone knows YouTube is losing lots more money to run than it’s bringing in, right? Wrong. Sure, a Credit Suisse report suggested as much earlier this year but the figures may not actually stack up. In fact, new research suggests YouTube may actually be close to breaking even.

YouTube may be massive, both in terms of popularity and the sheer amount of content, but it isn’t yet a moneymaking proposition for its owners, Google. Even Google admits this quite readily. But the situation may not be as bad as a Credit Suisse report published in April of this year implied.

Credit (Crunch) Suisse

That report by Credit Suisse analysts, Spencer Wang and Ken Sena, was widely reported. It was titled, ‘Deep Dive into YouTube’, and basically made educated guesstimates about what money Google can expect to see coming in to YouTube during 2009. The numbers were not a pretty sight.

Although Credit Suisse estimated YouTube would make $240 million in revenue this year, that figure would be countered by operating expenses of an estimated $711 million. Even the least educated industry watcher can see these figures, if true, would result in an annual loss of £471 million over the course of a year.

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Google is continuing to struggle to make YouTube profitable. All those eyes watching the site should be worth a mint, but turning viewers into revenue isn’t as easy as it sounds. Maybe giving users the choice of which adverts to watch is the solution?

Monetizing YouTube

YouTube is by far the biggest online video site on the Web. The number of viewers watching videos every day is huge, as is the number of videos uploaded to the site every day. But despite these statistics, YouTube is still not profitable, and maybe never will be.

The success of YouTube is actually part of the problem because it means the costs involved in storing and delivering all that data to all those people are mind-blowing. Another problem is monetization. The vast majority of YouTube videos cannot even be monetized, and delivering ads on the ones that can is a tricky balancing act.

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Hulu is currently in a fantastic position, gaining viewers every month, and bringing in enough money to just about get by. But is that ever going to be enough? Or are the paymasters and networks providing the content going to want more?

Hulu is…

Hulu is, by any measure you care to you wish to look at, a success. Its branding is strong, the content is great, viewer number are steadily growing, and it’s even making money. Not as much as it would like, obviously, but then which of the numerous online video companies is achieving the turnover it wants? Even YouTube is struggling despite getting enormous traffic and being known the world over.

Revenue Options

All online video services, barring maybe the BBC iPlayer which is paid for by British license fee payers (sort-of), rely on advertising to pay their bills. Hulu is no exception. Unfortunately, advertising rates, especially online, has dropped considerably over the past year or so. And that has hit online video companies, as well as blogs, Web versions of newspapers and other sites.

There is, obviously, an alternative method of raising money, and it’s one that News Corp has used often, most notably with The Wall Street Journal. News Corp is an equal partner in Hulu, along with NBC Universal and recent buy-in Disney. So, could Hulu soon charge for content, or shift over from the free, advertising-based model to a subscription-based model?

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The Performing Rights Society (PRS) collects royalties for music artists, and it generally does a good job. Except when it pushed YouTube to the limit a couple of months ago and got music videos booted off the online video site. But things now look set to change for the better, and about time too.

Stuck In The Past

The music industry has not shown its best side in trying to evolve to include new digital forms of media. Instead of encouraging the fledging businesses, it has chosen to stamp on them. Its reward for such a heavy-handed and short-term approach? Piracy increasing in popularity year-on-year.

What’s truly bizarre is that it never seems to learn from its mistakes. After stifling rather than using Napster and those early file-sharing services, the music industry is now continuing to make the same basic errors. And this is even extending to the world of music videos.

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