Skype-Joost Licensing Drama Déjà Vu for Friis & Zennström
Many people in the online video space are trying to make sense of the lawsuit Joost filed against former chairman and CEO Mike Volpi earlier today. The lawsuit has something to do with the supposed revelation of trade secrets in connection to the sale of Skype to a group led by Volpi’s new employer Index Ventures (which is also named in the suit, as it invested in Joost). But what does a failed video startup have in common with a VoIP operator? The answer comes down to one name: Joltid.
Joltid is a P2P technology provider incorporated in British Virgin Islands. It is owned by Joost and Skype founders Janus Friis and Niklas Zennström, and its tumultuous history makes the current fight with Volpi, Skype and eBay look like nothing special. Licensing conflicts that lead to the potential shutdown of a market leader? Been there, done that.
Joost Sues Volpi for Taking Tech to Make a Web Version of Skype
Janus Friis and Niklas Zennstrom’s Joost and Joltid today announced that they have filed a lawsuit against Michaelangelo Volpi, Joost’s former president, CEO and chairman, and his current private equity firm (and Joost investor), Index Ventures. The suit claims that Volpi and Index breached fiduciary duty, interfered with prospective business advantage, misappropriated trade secrets, breached contracts, breached confidence and committed civil conspiracy.
The gist of the lawsuit is that Volpi learned how to modify Joltid’s proprietary software to run on the web without the aid of peer-to-peer software when he was transitioning Joost from a peer-to-peer service to a web-based Hulu clone. With this knowledge, he was able to pitch a version of Skype that buyers could take over from eBay while side-stepping ongoing litigation.
eBay (and logically any buyer of Skype like the group Volpi and Index are currently leading) is embroiled in litigation over using Joltid’s technology, which runs the peer-to-peer software in Skype and the old version of Joost. But eBay and Skype only have an executable version of Joltid’s code to run Skype as an application, while Joost got access to the source code in order to modify it. (Friis and Zennstrom sold Skype to eBay in 2005, and are currently suing eBay as well.) If Volpi could reverse-engineer Skype in the same way today, it would potentially be able to operate without relying on Joltid. The lawsuit alleges the value of this confidential information is in the “billions of dollars.”
Vid-Biz: Volpi, Viacom, Reeves
Joost Removed Volpi as Chairman; brouhaha gets more interesting as Joost says it “is conducting an investigation into Mr. Volpi’s actions during his tenure as CEO and as chairman.” WSJ Digits blog)
Viacom Aggressively Takes Down Kanye Clips; network playing whack-a-mole with controversial MTV Video Awards appearance to make sure you only see the clip on TV or at MTV.com. (Media Decoder)
Keanu Reeves Stars in Sparhusen; the My Damn Channel web series is actually a spin-off of another web series, Easy to Assemble. (Tubefilter)
Massiverse Launches Transmedia Story; Dragons Vs. Robots will tell its tale across online games, a feature film, web videos and more. (VentureBeat)
Studios and Networks Working to Bring Web Video to TV and DVD; Dr. Horrible, Angel of Death and Seth MacFarlane’s Cavalcade of Comedy among those properties repackaged for offline consumption. (Broadcasting & Cable)
Vid-Biz: CIMM, AT&T, FCC
Ratings Consortium Gets a Name; Coalition for Innovative Media Measurement (CIMM) is the supergroup of media companies and advertisers trying to take on Nielsen. Robert Seidman calls the initiative “group therapy.” (TV by the Numbers) The coalition has only raised $1.4 million in total seed funding from the 14 founders of the group. (Broadcasting & Cable)
AT&T Officially Launches Hulu-Like Venture; the telco’s premium content venture gets a lot of its content from Hulu. (The Hollywood Reporter) Liz broke the news of AT&T’s entertainment portal last week.
FCC Launches Video Blog; Chairman Julius Genachowski kicks off the commission’s vlogging effort with a video about the power of broadband. (Broadcasting & Cable)
Virgin Media Taps Cisco for IP Video; cable co. updating its legacy platform to IP-based system and is using Cisco as the technology partner. (Multichannel News)
Volpi Still on Ooyala’s Board; the now-former Chairman of Joost no longer has the conflict of serving on both white label video providers’ boards. (Contentinople)
Volpi No Longer Chairman of Joost
Mike Volpi is no longer Joost’s Chairman, Silicon Alley Insider has confirmed. In June, Volpi resigned his position as CEO of the failed web TV startup and became a venture partner at Index Ventures, an investor in Joost.
Volpi’s role at Index gets a little more interesting as his firm is one of the investors acquiring Skype from eBay and both Joost and Skype were founded by Janus Friis and Niklas Zennstrom (who are in a legal tussle with eBay). For background on the Skype situation, you can learn more here and here.
We have followed Joost’s tortured history from rising star to the hollowed husk of its former self. This summer, realizing the premium content game was lost to rivals like Hulu, Joost switched strategies to become a white-label video provider (because what the online video world needs is another one of those). And just last week, the company’s CTO, Jason Gaedtke, left the startup to join Time Warner Cable.
Former Joost CEO Gets New Gig as VC
Former Joost CEO Mike Volpi already has a new gig lined up. He’ll be a venture partner at Index Ventures, which was part of the group that pumped $45 million into the little web TV startup that could (but didn’t).
Joost announced last week that it was changing focus from offering premium content in order to become (yet another) white-label video provider. As part of that strategic shift, Volpi stepped down as CEO but remains chairman of the company. Volpi has a long history with Index as he invested $10 million in the firm’s first fund while he was an exec at Cisco. According to the press announcement, Volpi will be “based in the London office as part of the venture team where he will lead early stage investments in the Internet, telecom/networking and media sectors and contribute to the firm’s later stage growth fund.”
Joost to Become a White-Label Provider, Volpi Steps Down as CEO
Joost announced today that it is shifting business strategies and it “will focus on providing white label online video platforms for media companies, including cable and satellite providers, broadcasters and video aggregators.” As part of this transition, Mike Volpi will step down as CEO and Matt Zelesko, who is currently the senior VP of engineering, will take over while still leading the engineering team. Volpi will remain chairman of the board.
What makes this move seem all the more doomed is that Joost is already enlisting another white-label video provider, Ooyala, to manage its ingesting, transcoding and metadata management. How exactly will Joost pitch itself as a competitor to Ooyala (where Volpi is also on the board) when it uses Ooyala itself?
Joost said it will maintain a core team in New York and London to work on the new white-label biz, as well as operating Joost.com. The company will “wind down” operations in its Leiden development center. According to a statement attributed to Volpi, Joost “will say goodbye to many of our colleagues and friends,” which seems like it could not mean anything other than layoffs, but Joost wouldn’t elaborate further or provide specific numbers.
In April, it was rumored that Joost was looking to sell itself and had even talked with Time Warner Cable.
We used to joke here at NTV that becoming a white-label video provider was what a business did when all other strategies failed. And it looks like Joost is no exception. After starting off as a P2P-based app, the company found that requiring a download hampered its ability to gain traction. It then moved to a plug-in and eventually moved completely to a Flash based method for watching web TV.
Joost Adds Widgets, Metadata API to Its Flash Player
Joost has announced that it is going to allow third-party developers to add Flash widgets to its video player soon. The Joost Labs blog this week previewed a widget that adds keyword-based Twitter search results to a video. Joost wants to eventually release a widget API that will expose some of the underlying video’s metadata and make it possible to integrate these widgets within the Joost Flash player.
This isn’t the first time Joost is toying with widgets. The company’s P2P-based video application also featured a widget API, but few wanted to develop for a player that had no user base. However, Joost has clearly been thinking about how to make widgets work in the past few years, and some of these ideas could lead to interesting results.
Joost Now on Your PS3 (Minus Big Content Partners)
Joost Labs launched a version of its web TV service for the PlayStation 3 today, making it accessible on your television set via the game console. Well, making some of Joost’s content accessible on your PS3 — just not anything from Viacom, Warner Bros. or CBS.
To launch Joost, PS3 owners select the Network icon on the PlayStation, open the Internet browser, press start and enter http://labs.joost.com/tv/ in the address field. The navigation has been optimized for the PS3 game controller.
The Joost news comes just a day after research from In-Stat predicted that game consoles would remain the dominant delivery mechanism for web video on television sets through 2013. The migration of newteevee to oldteevee is one we’ve been keeping tabs on here, and it looks like Joost has run into the same hurdle Boxee and Hulu.
Studios and networks are all for putting their content online, but they don’t want it to be an end-run around traditional TV operators, giving people a reason to cut their cable cords. This attitude resulted in the official removal of Hulu from Boxee, and when Hulu recently released its desktop app, it expressly forbid running it on anything other than a PC.
We don’t have a PS3, so if any NewTeeVee readers out there do, fire up Joost and tell us how well it works.
Vid-Biz: Joost, Firefox 3.5, Cabonauts
Joost Gets 12 New Content Partners; web TV service to get content from Marvel Enterprises, Speed Racer Entertainment, and TOEI Animation, among others. (release) In other content partner news — Metacafe Adds TV Hub; section will be feature clips from television programming from CBS, TBS, TNT and the CW. (The Wall Street Journal)
Firefox 3.5 Makes Video More Like Web Pages; the browser’s user of open-source video standards open up new interactive possibilities. (TechCrunch)
Erin Gray to Be Casting Director for Hayden Black’s Cabonauts; former Buck Rogers star will bring the roster of celebrities she reps as part of her Heroes for Hire booking agency. (release)
Boomers Spending More Time Surfing Web than Watching TV; new research from Changewave finds the older set are spending 12.9 non-business hours each week surfing the web and 11.8 hours watching TV. (The Hollywood Reporter)
Is a TV “Family Hour” Dead? TV execs gather to discuss how DVRs and new technology platforms have made the idea of families gathering at one time to watch television a thing of the past. (The Wrap)
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