Troubled online video startup Joost has announced a major restructure. Proving just how hard it is to succeed in their market, the company will switch focus from being an ad-funded video platform to a white label solution for businesses.
In a blog post today CEO Mike Volpi announced that although the existing video platform would continue to operate, the company’s primary offering would be backend solutions for media companies wanting to show video on the web. Many staff are being laid off as part of the move, with Volpi himself stepping down as CEO but remaining at the company as Chair of the Board.
Joost has suffered huge challenges in its short life. A year after launching in a blaze of hype in 2007, they switched from using a peer-to-peer based desktop app to a Flash video based solution. The convenience of browser-based viewing had been underestimated by Joost’s management.
That was just the start of Joost’s problems. Despite signing content deals with big names like Viacom and CBS, the all-conquering Hulu proved more popular with customers in the USA. While Hulu’s growth was astronomical, Joost languished far behind, as this traffic graph from Compete.com shows.
Joost will continue to offer its consumer video product but will channel its efforts into the Business-to-Business market. In these tough economic times, the company’s board may well have just made the only possible choice to save itself.