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Tuesday, January 30, 2007

Joost & BBC Video-on-Demand Plans: Fatally Flawed Design (at least in the UK)

At last - someone apart from myself is starting to look at the Joost architecture and realise that it will not be allowed to work – at least in the UK.

I totally agree with the article that content or lack thereof will be a huge problem. The founders of Kazaa got away with seeding the P2P pirate music market because they were just not on the music mafia radar. This time around Joost will be monitored by every legal practice in Hollywood and the first sign of any copyrighted material being transmitted will result in more subpoenas than any rational person would think is possible. In the long run, there may be an extremely small market for user generated content, but currently YouTube rules this roost. Why would anyone upload their content to Joost?

The biggest problem that Joost face is that the UK ISPs will just not give them enough bandwidth to make the service usable. Four of the big five UK ISPs (BT, ntl, Tiscali and Orange) have or plan their own video services and they have no legal right to provide guaranteed bandwidth. Even worse, in the UK there is a huge precedent for limited bandwidth on certain applications and most users terms and conditions allow ISP to aggressively pursue this practice. Current throttling of P2P networks on some networks reduces available bandwidth to around 20kb/sec at peak hours whereas the article indicates that 1Mb/sec is required to make Joost usable. Personally, I think that the majority of ISPs will deliberately target the Joost service to make the service unusable and strangle it at birth. Joost will have zero comeback.

The more intriguing situation will occur when the BBC finally launches its Video-on-Demand services. I think the streaming service is badly designed because the ISPs have zero incentive to enable multi-cast technology on their networks and therefore the service will be unusable for the vast majority of the UK. In fact, if I owned a mid-sized network with no video plans, I’d go to the BBC and ask for financial support to enable multi-casting on my network – after all the BBC already pay ntl (Virgin Media) for carriage and pay for satellite capacity from Astra. Why should ISPs not receive revenue for providing the bandwidth?

In terms of the BBC P2P service (iPlayer) again I believe it will be throttled to death, but a tiny percentage of users will not care and use the service even if takes a couple of days to download a hour length drama. The advantage that the BBC has over Joost is that the BBC actually own the copyright for some valuable content. The problem the BBC has is that they plan on DRMing the content and therefore their P2P network will be a lot less valuable than one’s that offer the pirated versions of the content which will inevitably appear.

There is a reason that BSkyB has spent a lot of money on buying a state-of-the-art UK fibre network. It is also very interesting the way BSkyB and Google are currently dating and planning a few joint services.

I think it is third time unlucky for the founders of Joost but the pile of cash that they have made from Kazaa and Skype will be more than adequate compensation. I think the BBC plans in their current format are fatally flawed, but they have the financial power to pay the ISPs for the bandwidth to make the service successful. Channel 4’s plans are even worse than the BBCs expecting that the user will pay for the content, but the CEO already has the begging bowl out for state financing.