CBS and Viacom invest in Joost

CBS and Viacom are among a group of five companies that have invested $45 million in Joost, a new venture established to distribute broadcast-quality television over the Internet.

Joost was co-founded by Janus Friis and Niklas Zennstrom, entrepreneurs who created Kazaa, the file-sharing music service, and then developed Skype, the Internet telephone system. In 2005, eBay bought Skype for $2.6 billion.

In addition to CBS and Viacom, other investors are from North America, Europe and Asia. They include Sequoia Capital, a Silicon Valley venture capital firm; Index Ventures, a European investment firm; and the Li Ka Shing Foundation, founded by the chairman of Asian conglomerate Hutchison Whampoa. Each investor received undisclosed stakes in Joost.

Earlier this month, Viacom made a deal with Joost to supply content from Comedy Central and Paramount Pictures. That came just after the company filed a lawsuit against Google’s YouTube for alleged copyright infringement.

CBS has also made a deal with Joost to contribute more than 2000 hours of CBS entertainment, news and sports programming.

Unlike YouTube, Joost has positioned itself as a vehicle for media companies to retain control and receive payment for video when they distribute it over the Internet. It does not allow users to upload videos, and it distributes only professional content. The service is ad-supported and free for viewers.

Joost increases speeds and saves on bandwidth costs by using a decentralized distribution system that streams videos from user to user over the Internet. The technology is similar to that used with Kazaa and Skype.