Reel Pop

MS + Yahoo = What for Video?

On the news of Microsoft's unsolicited acquisition bid for Yahoo this morning, I'm trying to wrap my head around everything Yahoo's been trying to do in the video space lately. What vid props/capabilities would Microsoft get in that space?

Yahoo's current video strategy
"Video everywhere you are on the net." Back in August, Yahoo announced they were re-focusing on video, and planned to offer a single channel for music videos, TV shows, movie trailers and sports highlights. They also planned to offer video through Flickr. IMHO, both sound like uninspired ideas. Over the next few years, I expect destination sites will go the way of the dodo, as younger users learn to navigate meta search engines and apps. Unless the media companies actually prevail in their ploy to cripple search engines -- and they won't: See recent lawsuits against the Pirate Bay and Seeqpod, for example, plus follow the Perfect10 v. Google case -- I see exclusive platforms as a thing of the past. That includes current exclusive distro agreements.

Also: Flickr with video? Ugh. A surefire way of alienating that site's user base, including me. Do one thing, do it better than everyone else, win.

Current video share
Yahoo currently controls 3%-5% of the video streaming market. YouTube has about 27%. Microsoft's video properties have about a 2% share. A combined MS + Yahoo would be good for getting advertising dollars. But as far as mindshare goes, YouTube's still top dog.

Content deals
Off the top of my head: new content deal with UMG to allow user uploads of music/video; recent deal with Belo to enhance local TV coverage; content deals with AP, CNN, and some sports leagues. Many more that I'll fill in later.

Video properties
Not counting video.yahoo.com, Yahoo owns vid-editing platform Jumpcut (I originally saw that as an excellent Flickr-like purchase, but don't think the site's going gangbusters by any means). Yahoo also recently announced they were acquiring vid hosting and distro company Maven Networks, which works with Gannett, Hearst, Fox News, Sony BMG, others.

More to come.

p.s. Forgot to mention Yahoo's extensive, if muddled, experience with producing original video content, e.g., Richard Bangs Adventures, In the Hot Zone with Kevin Sites, Wow House, etc. Definitely expertise that MS doesn't have, but the cultures def would need to remain separate.

Getting the Jobs Done at iTunes

By Andrew Wallenstein
There's a flurry of announcements coming out of Macworld today, but none more than astounding than the full range of movie studios that signed on to adopt a rental model. We knew 20th Century Fox was coming down the pike, but there was no indication that everyone else was jumping on the bandwagon, too--there could be no bigger vote of confidence for the new service. Apple chief Steve Jobs disclosed that 7 million movies have been sold to date, but you've got to wonder how quickly Apple will exceed that total on the rental side of the business, which is more appealing given the lower $3.99 fee for new releases.

We've knocked Jobs around a bit for his handling of the NBC Universal controversy, but the participation he is getting from Hollywood this go-round restores any faith Apple may have lost in recent months.

Netflix Thinking Inside the Box

By Andrew Wallenstein
For sheer guts, you have got to give it to Netflix, which plans to make LG Electronics the first of a series of hardware partners it will enlist to enable movie delivery to TVs via set-top devices (also reported in Reuters, NYT, WSJ). This is a market where even the mighty Apple has failed to establish a footprint, which hasn't deterred everyone from Vudu to SanDisk.

Now maybe the market is awaiting just the right entrant to figure out how to bring the Internet's bounty to the television; I agree that is the holy grail. But I am dubious that any kind of hardware add-on, even one that embeds the functionality in a device that serves a different purpose like Microsoft's XBox, is the answer.

Consumers are not going to be pulled into this business model on the strength of a brand; the slow growth of Apple TV has already proved that. Netflix is one of the few companies out there that can claim a brand loyalty that even approaches Apple, and yet it's not enough: Consumers won't try the PC-TV linkup without the conditions that will turn this into a real market: what is the price point, catalog, set-up difficulty, etc.

But what if the functionality could be baked into one device? Maybe the Sharps and Panasonics of the world are best poised to make this happen. While a separate box may provide a short-term solution, isn't a new breed of television monitors like Sony's Bravia the real answer? Cut out the middle man entirely; let the TV set itself be the device that connects to the Internet. Surely someone at CES will have the kind of technology that will make all these boxes seem pointless. (Update: NYT's Bits blog makes a similar point)

Speaking of which, is there anything that will actually be surprising at Macworld and CES later this month? Seems like all the good announcement are leaking in advance.

On a separate note: Two days into the new year and Netflix has already provided the kind of announcement that justifies a new category gracing this blog this year: the "gamechanger," the of innovation that has the potential to reshape the media marketplace. More on that in the coming months.