Investor's Business Daily, August 24th, 2007
Yahoo will again try to squeeze some bucks from pigskin.
For the second year in a row, the Web portal will team up with the National Football League to Webcast live games this season. But the games are available only to fans living in most places outside of the U.S., Mexico and Canada -- and there is a fee.
Yahoo YHOO sells some other content services, such as online dating and fantasy football. But the market for selling online content remains uncertain. It is even more uncertain now, after Google GOOG earlier this month said it would stop selling sports, music and news videos on its Google Video site.
But many analysts say there is content that will sell online. That content might well include the Yahoo NFL Game Pass service.
"This is clearly a tertiary development for the NFL because it's an overseas market and it's available only on computers," said Phil Leigh, an analyst for research firm Inside Digital Media. "But it will probably be profitable for Yahoo and the NFL, and it's a sign of where things could go."
Yahoo and the NFL declined to comment as of yet on the service, though sign-ups already are available at sports.yahoo.com/nflgamepass. Neither have revealed any specific numbers about last year's Webcasts, nor have they revealed their financial arrangements.
Could Be Moneymaker
The service, though, can be a moneymaker, Leigh says.
The Yahoo-NFL service will sell for $24.99 a week, the same as last year. But fans can buy the entire season package for $249.99.
"The price is pretty steep," Leigh said. "It's an indication of just how high a price the NFL puts on its content."
Satellite TV firm DirecTV DTV sells a package of NFL games, called Sunday Ticket, for $269 a year. That service, which also broadcasts all of the games live, is available only in the U.S. The Yahoo Webcasts will use the DirecTV feeds.
The Yahoo-NFL Internet service includes all regular season games. It doesn't include the Super Bowl and other playoff games. Fans also can watch replays of recorded games for up to 48 hours after the final gun sounds. Last year, they had just 24 hours to watch replays.
Besides the U.S., Mexico and Canada, the service also is not available in the Bahamas and a few other island nations. It is available throughout Europe, Asia, South America, Australia and Africa.
Consumers will need a broadband Internet connection. By 2011, 87% of U.S. Internet users will watch videos online,says eMarketer.
Most online video -- news stories, music videos or amateur footage -- is available for free on media Web sites and on video-sharing sites such as YouTube and Metacafe.
It's been tough for companies like Google to charge consumers for video, says Fred Boxa, a principal with IBB Consulting. Most of the video offered by Google for a price could be found elsewhere online for free, he says.
"They probably didn't see a significant uptake because they weren't an exclusive distributor of that content," he said.
Sole Source
The key for Yahoo is that it's the only online source of NFL games. And the subscription plan eases the process. Many people prefer paying a long-term subscription instead of a fee per video, Leigh says.
"The subscription thing is simple because you don't have a transaction every time you use the thing," he said. "You just have one transaction when you sign up."
There are a few online subscription services that seem to be doing well. Major League Baseball sells Webcasts of its games. Classmates.com, the United Online UNTD unit that plans to make an initial public offering, sells a subscription service that lets old schoolmates get back in touch.
But the subscription model hasn't always panned out. CBS CBS tried selling subscriptions to live Webcasts of the National Collegiate Athletic Association's men's basketball tournament. Last year, the TV network dropped the fee. The games are now online for free, supported solely by TV-like video ads.
The Webcasts on NFL Game Pass will have ads because DirecTV Sunday Ticket carries ads. It's unclear whether Yahoo will sell separate ads for its Webcasts, but the service may not be ideal for that, some say.
"There are only so many American football fans overseas," Boxa said. "And because they are spread over so many countries, that makes it difficult to sell advertising."
