Online media company Yahoo! Tuesday added more content to its Platinum pay for service offering, an incremental move that raises questions about the future of Internet subscription services and broadband.
New to the Platinum lineup are video and audio content from Showtime, the National Hockey League, National Geographic, Major League Soccer, and skiing filmmaker Warren Miller Entertainment. In the next few weeks, offerings will include financial news from CNBC, and programming from the BBC.
The basic Platinum service costs $9.95 per month. For two dollars more customers get access to additional content such as the NCAA archives.
The announcement is part of Sunnyvale, Calif.-based Yahoo!’s drive to change its business model.
“The big news is that Yahoo! has decreased its dependence on advertising revenue from eighty percent to fifty percent,” Denise Garcia, principal analyst for media and advertising at GartnerG2 in Stamford, Conn. told internetnews.com.
Jim Moloshok, senior vice president, Media, Entertainment, Information and Finance at Yahoo!, said the change is good for the company.
“Subscription revenue is more dependable,” he said.
The new revenue stream is a combination of subscription, ISP, portal, and business services. Currently Yahoo! boasts about 2.9 million paying subscribers. The company said it does not break out numbers for specific services like Platinum. Moloshok thinks the time is right for new Internet content services.
“About thirty million homes have broadband this year,” he said. “I think when people upgrade to broadband they are going to want something more than faster access to email.”
Garcia said the future of Internet entertainment is still hard to read. “This stuff is interesting,” said Denise Garcia, principal analyst for media and advertising at GartnerG2 in Stamford, Conn., “but our research shows that people are still hesitant to pay for online subscriptions. Reluctance to pay for online entertainment is decreasing slightly: in 2001 fifty two percent were unwilling to pay for entertainment, and that has dropped to forty-five percent in 2002.”
But, she continues, the content, access, and technology providers are still testing the waters.
“Entertainment services like these are really an appeal to get consumers to buy broadband Internet access. But I don’t think these new offerings are going to be the ‘killer app’ that will drive a massive rollout of broadband,” Garcia said.
Platinum does not require a broadband connection, but Garcia said dial up quality would be inferior to broadband. The service does require a PC and is currently not supported for Mac users, but Moloshok said Yahoo! will add Mac support, “somewhere down the line.”
