It's showtime for Yahoo! (YHOO) .
The Internet media company says it's launching a subscription service today enabling people to watch online telecasts of sporting events, entertainment programming and news reports.
The new service, dubbed Yahoo! Platinum, is one of many ventures that Yahoo! has launched, under Chairman and CEO Terry Semel, in order to diversify its revenue stream beyond the Internet advertising business that originally brought it to prominence and profitability.
Yahoo! Platinum also illustrates the desire of Yahoo! -- along with other companies such as
AOL Time Warner
-- to develop the Internet into a profitable entertainment medium.
That goal is far from guaranteed for Yahoo!, as indicated by the fate of its prior efforts in Internet broadcasting, including the purchase of broadcast.com and the development of the now-defunct financial news channel
Yahoo's shares rose 44 cents to close at $20.69 Friday, not far from their 52-week high of $21.
Spanning the Globe
In its favor, Yahoo!'s latest Webcasting venture likely will benefit from the marquee programming the company is offering as the service debuts.
Subscribers to the more expensive of Yahoo!'s two debut packages -- "Yahoo! Platinum SportsPak," priced at $16.95 a month -- will have online access to videocasts of all 56 games in the first three rounds of the 2003 NCAA Division I men's basketball championship, popularly known as March Madness. Games will be available to subscribers both in live broadcasts and in archived versions.
Subscribers to both SportsPak and the basic Yahoo! Platinum service -- priced at $9.95 a month -- will be able to watch behind-the-scenes footage, not broadcast on television, from the reality television shows
Other programming slated for both services or simply SportsPak includes live broadcasts from Nascar auto races, as well as feeds from ABC News, CBS MarketWatch and The Weather Channel.
Jim Moloshok, Yahoo!'s senior vice president for media, entertainment, information and finance, says that in lining up sports, reality TV and news programming, the company is addressing the entertainment interests of its audience. "We're programming this very much as if we had a television broadcast network," says.
Lowering the Bar
A key issue, of course, is whether enough consumers will be willing to pay for the service to make it profitable. RealNetworks, which launched its own subscription content service in 2001, says it had 900,000 paying subscribers at the end of 2002. "With a very small subset of that ... nowhere near that," says Moloshok, "this becomes a good business for Yahoo!" He declines to provide more specific subscriber goals, or to discuss the costs of launching Yahoo! Platinum.
AOL, meanwhile, has articulated a strategy of developing a broadband content service that would appeal to the households forsaking narrowband connections from AOL and others in favor of high-speed Internet connections provided by cable operators and telcos. So far, however, Wall Street has been skeptical about AOL's ability to collect content subscription fees from people already paying $40 a month for high-speed Net connections.
Moloshok says he's confident the company will be able to come up with TV-related programming that people will pay for once March Madness ends, and if the reality TV show phenomenon loses steam. "There's always going to be some kind of a video element that we will be able to present that complements the fan's broadcast viewing experience," he says.
He also says that Yahoo! Platinum is much better positioned for success than FinanceVision, given Yahoo!'s ability to promote Platinum as well as the name-brand programming slated to appear. "I'd much rather get my news from Sam Donaldson and Barbara Walters than whoever was sitting there on FinanceVision," Moloshok says.