Portals and Video — An Overview

So the big news com­ing out of the 2006 Con­sumer Elec­tronic Show (CES) is that all the por­tals are now try­ing to go into the video space. Microsoft, AOL, and Yahoo have already made their announce­ments (as has Apple, which is not pre­sent­ing at CES and is reserv­ing its sparks for next week’s Mac World) and word has been leak­ing that Google will also get into the space. So it’s time to review, side by side what each player has to offer.

Soft­ware

The first thing I’m tak­ing a look into is what are the soft­ware pack­ages each offers:

So it looks like we will be deal­ing with three dif­fer­ent types of dig­i­tal right man­age­ment sys­tems, mak­ing it dif­fi­cult to actu­ally have con­tent play on every sin­gle device. If only Apple, Microsoft, and pos­si­bly Google, could sit down and agree on a stan­dard way to han­dle this, it would make everyone’s life eas­ier. How­ever, because they all want to lock-in users, we will see an increas­ing amount of incom­pat­i­bil­i­ties pop up. This becomes more vis­i­ble in the portable space, which I’m high­light­ing below:

If my analy­sis is cor­rect, Apple is using its dom­i­nance in the iPod space to try to gain power in the liv­ing room; Microsoft is using its dom­i­nance in the liv­ing room to try to get trac­tion in the non-PC world (and gets an early edge as it will play on the Sony Playsta­tion Portable and works on the Treo 700w); Yahoo! is hop­ing that an alliance with Nokia, which has a strong posi­tion in the mobile phone busi­ness, will help it in that space. This makes for a future bat­tle in the portable video space with Microsoft get­ting an early hedge.

What con­tent and how much?

But all the dis­cus­sion so far has been one of tech­nol­ogy. The real ques­tion is what con­tent is avail­able and how much it will cost. Let’s look at what they will offer:

Apple has done a good job in cap­i­tal­iz­ing off its early lead in the space to get music related con­tent and some TV con­tent. How­ever, it is weak in the news, weather and sports arena, which could be an issue (I’ve actu­ally heard from peo­ple at sev­eral large con­tent providers of those types that they fear the power that Apple has in that space and, as a result, are won­der­ing whether they should offer con­tent to Apple at all because they are afraid to be led down a path where Apple would be in the lead, with them get­ting lit­tle input into price and strategy).

Also of note here is the fact that none of the por­tal is yet offer­ing movie down­load. I expect Apple to be the first out the door with such an offer­ing. Google and Yahoo! may also enter that space but Microsoft will not (as some of its part­ners like MovieLink, Cin­e­maNow and Starz, are already offer­ing such things) and AOL may only offer Time-Warner con­tent (other stu­dios will prob­a­bly not want to offer their con­tent through a com­peti­tor). Yahoo! will prob­a­bly hedge out Google in that area too, largely due to the fact that its man­age­ment has deep ties into Hollywood.

Last but not least is the amount of user-content. Google and Yahoo! are play­ing with the long tail, hop­ing that user-generated con­tent will help them fill some of the pipeline. This will be an inter­est­ing test as to how com­pelling that con­tent can be and there may be some tricky issues relat­ing to copy­right but it seems to be a risk those two play­ers are will­ing to take.

The next ques­tion is how much this will cost:

In this space, it is inter­est­ing to see two dif­fer­ent busi­ness model col­lide: on one side, you have com­pa­nies that are look­ing to offer adver­tis­ing sup­ported con­tent to the masses and charge a pre­mium for some of the con­tent. The charg­ing model on the pre­mium con­tent is also diver­gent from player to player: Apple is look­ing at a fixed per unit price, while AOL and Microsoft are look­ing at an all you can eat price for a larger fee. Although Yahoo! has not announced much in this space, they look pri­mar­ily to the adver­tis­ing sup­ported model as the way to go. Google, on the other hand, is going to try to cre­ate a mar­ket­place based on vari­able rates, and will prob­a­bly use some­thing sim­i­lar to an AdWord for Video type of pro­gram to sub­si­dize their own free content.

Update:

I’m mak­ing a few changes to the tables (pri­mar­ily in the Google columns) based on the lat­est infor­ma­tion I’ve received.