Six Dead – Or Dying – 'Cable Killers'Six Dead – Or Dying – 'Cable Killers'
Joost and ivi are just two purported cable killers that failed to outlive cable, which, at last check, is still around
August 31, 2012
Consumer adoption of high-speed broadband has spawned many video startups that were labelled "cable killers," either by themselves or industry-watchers and other pundits that wondered how in the wide, wide world of sports the MSOs would be able to stave off the onslaught of over-the-top video competition, new (better) navigation systems and services that pushed content to all types of screens.
But a funny thing happened. None of them have managed to kill cable, but instead caused the MSOs to get off its collective duff and take action to protect and preserve its business model via the use of authenticated TV Everywhere services and IP video migrations that will help them ship TV to multiple screens and introduce more agile cloud-based navigation systems. Sure, cable's still losing more video subs than it's gaining, but, for the most part, their overall businesses are quite profitable.
Meanwhile, many of these purported cable killers are already taking dirt naps, or are mortally wounded and on their way to an early grave, with ivi Inc. being the latest to go on full life support. Aereo Inc. is the latest startup to challenge the traditional pay-TV model, but the broadcasters want to squash it like a bug, too. The courts have awarded Aereo a stay that lets it keep its service going as the case is heard, but, seeing how ivi just fared, it may only turn out to be a stay of execution, even if Aereo's technical approach is a bit different than ivi's. (See Judge Keeps Aereo on the Air.)
But here's our list of those that started up with high hopes, only to fade to black or become largely irrelevant, in recent years. Have we missed a good one? Chime in on the message board.
Actually, ivi inc. would have been better off if it was a "cable system," or if it could've convinced the courts that it was. Ivi appears to be at the end of its rope (vine?) after an appeals court upheld an injunction against the company, which captured over-the-air TV broadcast signals and redistributed via the Internet to customers who were paying $4.99 per month. Ivi was somewhat interesting in that it offered linear TV from the big broadcasters. It thought it was on the up-and-up because it was paying a $100 compulsory licence to the U.S. Copyright Office, but the courts didn't buy it. (See Courts Keep ivi's Internet TV Service Off and Court Cuts Ivi's Web TV Signal.)
Sezmi Corp., in the vein of USDTV (another flame-out -- spoiler alert! You'll read about soon), also tried to pitch consumers on no-frills TV packages that relied on a mix of over-the-air datacasting and broadband-fed video distribution ... and did not offer ESPN, the priciest network of the lot. Its notion of altering the TV business model helped it raise $90 million, but, alas, could not get customers as it later tweaked its strategy to focus on pay-TV operator partnerships. That didn't go great either, so it punted by selling its assets to $16 million to Kit Digital . (See Kit Digital Pays $27M for Sezmi's Leftovers.)
Joost took its shot at Web TV greatness and put quite the scare into the cable guys, but the company, which was once led by former Cisco exec Michael Volpi, never could get its hands on enough good content to make a difference -- a problem that's been a scourge for the entire OTT video sector. At one point, Time Warner Cable Inc. (NYSE: TWC) was rumored to be interested in buying Joost as the MSO began to ramp up its TV Everywhere efforts, but smartly did not pursue it further. Adconion Media Group bought Joost's assets in 2009, and still had high hopes for turning it into a premium video service. But that wasn't to be either, completing Joost's demise. The message posted on Joost's website today pretty much sums things up: "Thanks for your support and interest in Joost.com. We are re-evaluating the Joost.com purpose and services. For the near-term we have decided to suspend the site to allow for a full re-evaluation. Thanks again." Umm ... you're welcome? (See Joost Sells Off Scraps.)
U.S. Digital Television LLC (USDTV) targeted cost-conscious consumers and so-called "cable nevers" with a platform that used datacasting and broadband to deliver a slimmed-down lineup of linear TV and some VoD. It styled itself as the JetBlue of pay TV, but crashed and burned. After four years of trying and about 7,200 subscribers to show for it, USDTV went belly-up in 2007 after its biggest backer at the time, NexGen Telecom, got cold feet and pulled out.
MovieBeam had the deep pockets of Walt Disney Co. (NYSE: DIS) behind it early on as it used a hybrid datacasting/broadband model and to deliver movies to specialized boxes. (Memo to alternative TV startups: If you rely on datacasting for a video service, history shows that you've already got two strikes against you. Reconsider that part of the strategy.) The fear among the cable guys was that this service would threaten their VoD platform. It didn't, shutting down in late 2007 after Movie Gallery bought the company and tried to make a go of it.
Akimbo Systems was one of the first OTT video wannabees that grabbed cable's attention when it came out with a broadband-connected box to deliver a library of VoD content. It shut its doors in mid-2008 as its limited library and pricey box failed to make a dent in the still-young world of Web-fed video. Before things got too dire, Akimbo even tried to forge partnerships with cable so its content could be offered on their VoD systems. While cable operators tend to provide vendors with just enough nourishment to keep them alive and healthy, they typically don't like to help out potential competitors that have already sprung a major artery.
— Jeff Baumgartner, Site Editor, Light Reading Cable
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