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Speedway getting boost from Joost

February 2, 2008
By Anthony Schoettle, Indianapolis Business Journal

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Speedway getting boost from Joost
Clips from IMS Productions widely viewed on Web network
Sat. February 02 - 2008
Anthony Schoettle -  aschoettle@ibj.com
IBJ staff

Shows provided by IMS Productions, the video production arm of Indianapolis Motor Speedway, are among the top draws for Joost, a high-profile Internet provider of television content launched last October.

In December, IMS Productions had more than 150,000 viewers stream its video clips through Joost, adding to a quarter in which it racked up 500,000 video views through Joost, which has more than 2 million registered users.

A Joost spokesman confirmed the IMS content was among the most viewed attractions on the site, but wouldn’t provide specifics.

“No doubt, Helio’s performance on ‘Dancing with the Stars’ helped,” said Charlie Morgan, who took over as IMS Productions president from the late Buddy McAtee three months ago.

Helio Castroneves, a two-time Indianapolis 500 champion, won the dance competition on the popular ABC series in November. Video of Castroneves and his dance partner at the Speedway was highly viewed in December, Morgan said.

“This is just the type of exposure the series needs,” said Dennis McAlpine, a New York-based motorsports analyst. “The IRL has been trying to get people more interested in their drivers for years.”

Joost, based in the Netherlands, includes content from numerous providers, including Black Entertainment Television, CBS, Comedy Central, Major League Baseball, MTV, National Hockey League and Paramount Pictures.

Advertising is Joost’s primary revenue source. Viewing the site is free.

IMS Productions supplies video from race preview shows, previous races, highlight packages, driver biographies and other historical shows involving the Indy Racing League and Indianapolis Motor Speedway.

The terms of its contract with ABC and ESPN don’t allow IMS to stream live races or qualifications. But that might happen in the future, IMS officials said. And though IMS Productions is supplying only motorsports-related video, the diversifying video production firm could supply other programs as the Joost relationship matures, Speedway officials said.

Given the lineup of Joost content providers, IMS Productions’ performance is impressive, said Robert Unmacht, principal of iN3 Partners Inc., a Nashville, Tenn.-based media and investment-banking consultancy.

“Joost has some heavy-hitters in their lineup,” Unmacht said. “This shows [IMS Productions] has a strong niche audience that uses this technology. That’s encouraging for them.”

But the Indy Racing League has a long way to catch up with its chief rival in terms of Web exposure.

Some point to NASCAR as a reference point. The North American stock car racing series’ Web site had 25 million video views last year, according to New York-based Nielsen NetRatings.

Nielsen officials said Joost doesn’t yet meet minimum requirements to be measured.

McAtee championed the Joost initiative, and Morgan said he is equally enthused about its potential.

“Joost is definitely one of the projects we’re most excited about right now,” said Morgan, who formerly was vice president and market manager for Atlanta-based Cumulus Media’s group of Indianapolis radio stations—WFMS-FM 95.5, WJJKFM 104.5 and WWFT-FM 93.9. “This gives us more latitude than network TV.”

In the near term, Morgan said, the Joost deal could represent a healthy six-figure annual revenue stream for IMS Productions, with potential long term to be a multimillion-dollar annual windfall.

“The revenue stream is not significant yet, but we have received checks, and that’s a good thing,” Morgan said.

Joost content providers generally get paid for the videos they provide and the views they generate.

There is lots of upside to the Joost deal, with little risk, Morgan said. Other than adding three employees last year to handle the Joost initiative, there’s been little cost in the deal to IMS Productions.

There has been a tremendous buzz in media and technology circles created by Joost, said Mike Bloxham, director of Ball State University’s Insight and Research Center for Media Design. Much of that, he said, has to do with Joost’s founders—Scandinavian entrepreneurs Nicklas Zennstrom and Janus Friis, the founders of Skype Internet phone service and developers of Kazaa file-sharing software.

Skype was sold to California-based eBay for $2.6 billion in 2005, and Kazaa was sold to Australia-based Sharman Networks for an undisclosed amount in 2002.

“The pedigree of this firm gained them a lot of valuable attention,” Bloxham said.

While Joost came out of the gate fast, growing to 150 employees in less than two years, it seems to have lost some momentum. In January, the Amsterdam-based company, which has its North American headquarters in New York, lost its chief technology officer to the BBC.
 
Though the new technology made it immediately popular with technophiles, its word-of-mouth and Web marketing program has meant the company is growing slowly with people outside the broadcasting and technology sectors, industry experts said.

“They’re doing no traditional mass marketing: no TV, no radio, no print,” Bloxham said. “That approach has been questioned.”

Joost seems to be getting less attention now that it is available to the public than when it was testing under The Venice Project moniker, Bloxham noted.

“They seem to have lost a little of their mystique,” he said.

Joost suddenly seems to be facing competition in a sector that not long ago was void. AOL, Apple and several national TV networks recently launched on-demand video through the Web.

“That shows there’s potential here,” Unmacht said. “But Joost has to demonstrate they can do it better than the others.”

Despite a few hiccups, said Barry Umansky, chairman of telecommunications at Ball State University and a beta tester of Joost last year, the site still has much promise.

“You won’t believe the quality of this video,” Umansky said. “The potential is definitely compelling.” •

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