ErinMedia Shutting Down; Joost Technology Explained; TVB Building EDI Platform

erinMedia Shutting Down, Insiders Report

Sources advise Jack Myers Media Business Report that erinMedia CEO Frank Maggio has decided to shut down operations of his fledgling research company following Nielsen's announced plans to launch a competitive set-top service. Although agency executives and investors who were planning an investment in Erin believe Nielsen's announcement is "vapor-ware," the shut-down leaves Spark Capital, Publicis and Time Warner red-faced. Just two weeks ago, Erin announced the three companies were set to invest $25 million in Erin to assist in the company's launch of a research model designed to rival Nielsen.

Erin has an anti-trust lawsuit pending against Nielsen and the current actions are seen as additional support for Erin's contention that Nielsen stifles competition by announcing services without actually having the capabilities in place. However, in the past week, several trade press reporters have received extensive files of information that call Maggio and his motivations and credentials into question. The background information includes details on Maggio's real estate holdings and transactions, outstanding loans and mortgages, websites, charitable contributions and foundation, warnings sent to Spark Capital, and explorations of "white collar crime" cases that have centered in Maggio's home town of St. Petersburg. The local St. Pete newspaper is also reported to be looking into Maggio's holdings and businesses.

Maggio has been a lightning rod for controversy since 1985, when he discovered a loophole in a Beatrice-sponsored Monday Night Winning Lineup contest and mailed in 4,000 winning entries for a grand prize trip to the Super Bowl for eight valued at $20,000. When Beatrice cancelled the contest claiming the contest's fairness had been compromised, Maggio sued Beatrice and won.

In the past several weeks, Maggio has been more actively positioning Erin as a viable competitor to Nielsen based on access to set-top data and access to interactive viewer response, generating positive press and comments from research leaders at agencies and networks. The financial infusion from Time Warner, Spark and Publicis enhanced the company's credibility. Maggio recently attended events at the CTAM Research Conference that was held in his home town of St. Petersburg. While some believe the attacks on Maggio are an effort to discredit his lawsuit against Nielsen, the source of the information is not related to The Nielsen Company, according to sources.

Joost Architecture Explained

Building on the pedigree of KaZaA (free music) and Skype (free phone calls), Joost resembles both companies in its dependence to Peer-to-Peer Network architecture. P2P was first created to transmit prohibitively large files by breaking them down into fragments and distributing the task among a network of users (or "peers"). KaZaA used the technology to enable music sharing, while Skype - now the most downloaded application in the history of the Internet - leveraged the backbone to create Voice Over IP telephony. Joost has now deployed P2P for streaming. Joost co-founders Niklas Zennström and Janus Friis, developed KaZaA and built and sold Skype to eBay for $2.6 billion

While it's exceedingly difficult to launch a startup, much less a global brand, P2P networks reward growth: Unlike DSL, for example, as more users register for Joost its network gains in efficiency. As Joost grows in size, its community creates exponentially more pathways for data to follow; in fact, at higher bitrates the cost advantage of Joost versus conventional streaming increases as well.

Joost's founders claim that nearly 90 percent of its infrastructure is the product of open source code. Without underestimating the brainpower demanded to coax code to Joost's ends, this dovetails neatly with CTO Dirk-Willem van Gulik's assertion that, (as reported in Dutch publication NetKwesties) "The core of company is not technology, it's content, it's advertising, it is about the business model for revenue sharing."

As such Joost is a true cross-platform system. Built on open source, it runs on Windows and last week it launched a Mac client for OSX (Intel Macs only); soon it will support Linux. Despite the expertise of its management there are many wildcards in the offing: among them Net Neutrality (Joost claims to be agnostic; it has mapped out scenarios for each outcome) and bandwidth issues (in India and UK there are monthly download limits that even Joost's savvy compression might not be able to circumvent). On the positive side, Joost has made significant inroads in solving problems around data compression (offering DVD quality at 400Kbps) while innovating its proprietary P2P network, Global Index, which seamlessly directs data between peers and servers, creating a manageable global network of subnets. But most of all, for viewers, broadcasters, and advertisers alike, it offers a high quality broadband a la carte video experience.

Just as "Google" was derived from a mathematical conceit (1 followed by 100 zeroes) that begins to describe the company's gigantism and has become a verb unto itself, Joost appears in the Dutch proverb, "ALLEEN JOOST ZAL HET WETEN," loosely translated as "The Devil May Know." If anything, this choice for a brand name is consonant with Joost's philosophy - it's out on a limb, keenly aware that to achieve success the devil is in the details. By Jerry Weinstein

TVB Set to Build Digital Transaction Platform

After years of fits and starts, the Television Bureau of Advertising and the National Association of Broadcasters, in concert with the American Association of Advertising Agencies and Association of National Advertisers, has made a multimillion dollar commitment to build TVB ePort, an eBusiness digital platform that will enable a new wave of open-standard electronic transactions among advertisers, agencies, broadcasters and station reps. The digital platform is expected to be operational in the fourth quarter of 2007.

Chris Rohrs, TVB President, said there would be "zero cost" to customers and would be a "win-win" for all parties. Although the TVB did not mention the planned test of an eBay managed online reverse auction led by several major advertisers and media agencies, it's clear media sellers are hoping to manage the electronic interchange process rather than leaving the development process to advertisers and agencies.

Rohrs commented, "To grow our core business, broadcasters have to make the process as easy as possible. Looking beyond Spot TV, new digital platforms will require an evolution to electronic business practices that are faster, smarter, more accountable and more efficient - the TVB ePort will enable that evolution."

Bob Liodice, CEO of the Association of National Advertisers, said: " With TVB ePort leading the way, archaic business systems will move towards automated, highly efficient processes that will improve the entire media business." A TVB spokesperson told Jack Myers Media Business Report "since TVB ePort will employ open-standards, Donovan is welcome to participate."

Greg Smith, Co-Chair AAAA E-Biz Committee and CIO McCann Worldgroup, said: "We applaud the forward movement in this space by the TVB. Acceptance of our strategy and standards in web services and registry continue to show that people are committed to this effort." The AAAA Ad-ID system will be employed in the system.

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