Success Factors for GridNetworks

Note: For background information on my interest in GridNetworks, please read my previous posts:

Challenges of High Quality Video Delivery

GridNetworks, what's my Interest? Part one.

GridNetworks, what's my interest? Part two

Based on my observations of startup universe, I believe that every startup needs to have at minimum two success factors, one on profit side and one on cost side, to succeed.

Profit-side Success Factor

For GridNetworks (GN), the profit-side success factor is dependent on the number of distributors of high-quality content willing to pay for using GN infrastructure, irrespective of whether they are well-known content distributors with large content library like Disney or niche distributors leveraging long tail phenomena like Reeltime.

Some might argue advertising may be a viable option. I seriously doubt viability of an infrastructure intensive play like distributing high quality video solely based on advertising. Capturing $10 in advertising while paying $28 for delivery doesn't look like a viable business proposition to me. See, Comment on A-List Blog may result in high traffic and Internet Video Business Challenges.

A subscription based viewer model may become viable option for predictable delivery quality once the delivery infrastructure has achieved a critical mass of viewers, content, participatory nodes and content distributors. Most probably, only to be realized in next phase of GN.

To be continued ...