Yahoo's new video not free for long
Through a syndication deal with Carsey-Werner Distribution, Yahoo visitors can now watch episodes of the little-known sitcom "Townies" as well as classic commercials, celebrity interviews, movie clips and music videos. The Sunnyvale, Calif.-based company also said it plans to Webcast a Sting concert, air a conference for victims of the Sept. 11 tragedies, and Webcast cooking videos through a deal with Allfood.com.
Terms of the deals were not disclosed.
Monday's video-content deals come as Yahoo works to create paid services with the potential to ease its deep reliance on advertising, which made up 80 percent of its revenue in the third quarter. That lopsidedness helped contribute to a 44 percent decline in overall revenue at the Web portal from the same period last year.
Mark Mooradian, an analyst at Jupiter Media Metrix, said Yahoo's proposal to offer premium services for Yahoo Broadcast is a "potentially interesting idea," but it may come at the wrong time.
"It's an extremely imprudent time to start charging for random entertainment products on the Web, (although) music is probably the exception," Mooradian said. Companies "haven't been able to convince people that virtually any content is worth paying for, and the market right now is in no way signaling that consumers are ready for that."
Yahoo has made aggressive moves this year to convert once-free services into paid formats, including adding charges to its personal ads, auction listings and GeoCities home page hosting services. But those offerings to date have contributed relatively little to the company's bottom line.
Although Yahoo's new streaming-video programs are currently free and advertising-supported, the company said it is laying the groundwork for a premium service that it hopes will help shift its revenues to a more balanced mix.
Marc Montoya, general manager of Yahoo Broadcast, said the company will move some of its streaming content to a premium service as early as the fourth quarter.
"High-speed access or connections to the Internet will become prevalent with good content," Montoya said. "If you supply good content for users and the general public, they will come."
Yahoo was one of the first companies to secure a distribution deal with Pressplay, a joint venture between record-label owners Vivendi Universal and Sony aimed at creating a music-subscription service by year's end.
The Web portal's streaming service faces stiff competition from rival media companies. RealNetworks, for example, says it has pulled in more than 400,000 active subscribers who pay $9.95 a month for its GoldPass service. It has teamed with AOL Time Warner, Bertelsmann and EMI Group on a music-subscription service called MusicNet that will compete with Pressplay. It has also lined up exclusive deals in sports, a programming niche Yahoo still lacks.