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Yahoo Go - Genuine Personal Entertainment Guide?

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Yahoo Go™ - The World's First Genuine Personal Entertainment Guide?
Colin Dixon - IP Media Practice Manager

Download this TDG Opinion as a PDF

April 27, 2006

The Announcement

With the release of Yahoo Go™, Terry Semel believes he now has a solution that could link virtually every facet of our digital lives into a single coherent user experience (bridge the gaps between the solitary 'islands' of our various entertainment experiences). Yahoo! will now be everywhere you are: on your office PC, on your mobile phones, and, as of yesterday, even on your living room TV.

It's not the first time this kind of thing has been attempted, nor will it be the last. To attain 'omnipresence' is a goal of every major media company including Google, Disney, Viacom, and many others. However, this is the first time a system operator (be it a virtual one) has attempted to embrace their users in every facet of their lives. It is breath-taking in its scope, even if a little clunky in execution.

The Details

At the January 2006 Consumer Electronic Show, Yahoo! CEO Terry Semel publicly announced the Yahoo! Go initiative, a platform by which the Company would reach each user with Yahoo!-branded services on every digital device they own. As Mr. Semel said, the "Electronic Joe" has "Invested a lot of time and a lot of energy setting up their world on the PC and they now want the ability to take that information wherever they go." With last week's purchase of Meedio (a manufacturer of media PC, DVR and automation software), Yahoo! gained the intellectual property it needed to transform the PC into a whole-home media engine and deliver a full PVR experience including an integrated program guide to any networked TV in the home.

As well, Yahoo! can now deliver its entire library of web-based content to the TV, if the user is willing to go through the pains of hooking the PC to the TV.

The Logic

If we look at what others are doing to link the PC to the TV, we immediately bump into two industry titans: Microsoft and Intel. Microsoft has put its full weight behind Media Center Edition, having seen the opportunity to lock-down the role of home media hub for the PC and, by default, for Microsoft. Intel recently jumped into this space with the ViiV initiative, seeking to make the flow of media between digital devices a seamless experience.

On the face of it, it would appear that Yahoo! is suddenly in competition with both Microsoft and Intel - not a good place to be! After all, this is among WinTel's key strategic concentrations, so any alternative vision to turn the PC into a home media hub or persuade users to hook the PC to the TV would be highly offensive to both Intel and Microsoft.

But Yahoo! Go also enables consumers to organize photos, videos and music and then ship this content around between your home or laptop PCs, mobile phones, and home TVs in a seamless and easy-to-use fashion - but isn't the vision behind Intel's Viiv?
So it would seem that Yahoo! is squaring off against Microsoft and Intel. So how does Yahoo! stack up against the technology competition? In short, pretty well.

First, the software is free! Hands-down this wins over spending money on a Windows Media Center or Intel ViiV-powered device. Of course, you still need to have a media-friendly PC with a built in TV tuner card (or Yahoo! can show you where to easily find and order one). But if you already have a PC with these features, Yahoo wins hand down on the issue of cost.

Second, Yahoo! provides wonderfully simple, step-by-step instructions to help consumers get the TV hooked up to the PC. No, they don't talk about using digital media adapters (a topic that should be avoided until consumers are ready to tackle that complexity), so as long as you're willing to place the PC next to a TV, connecting the PC the TV is as simple as connecting a DVD player to an A/V receiver - in fact, the way Yahoo! describes the process (using simple terms, warm colors, and clear, understandable graphics), one has to pause and appreciate the simplicity.

But to focus on the technology is to miss the more important point. For Microsoft and Intel, technology sales are the end game. For Yahoo!, technology is merely a means to an end - it is secondary to Yahoo!'s larger ambition to control the platform interface and the distribution of digital content distribution. If that prioritization sounds familiar, it should. It is the modus operandi of your cable or satellite company.

The Implications

As Terry Semel said at January's CES, Yahoo! Go has four objectives:
- To create a seamless experience between devices;
To utilize the particular device to its best advantage;
- To know better the end-user; and
- To base the entire effort on open standards.


For those of you that read my report on the Interactive Program Guide space released last November, you are already familiar with these points. Mr. Semel is describing what I then called a "Personal Entertainment Guide" or "PEG."

With Yahoo!'s intended arrival in the TV environment, it aspires to become the user's guide to all media, delivering a rich variety of content to users wherever they are, whenever they want. The Yahoo! user no longer needs the clunky program guide provided by the cable or satellite vendor. Consumers can use the richness of the web to find the entertainment they're interested in. Not only can they find TV shows and schedule them to record on their PVR, they can chose from the endless bounty of the web and view it all from the comfort of their couch. And all courtesy of the Yahoo! PEG.

This would appear to be the worst of nightmares for traditional PayTV operators. Suddenly, they become part of a Yahoo!-defined walled garden of sorts, hidden behind the Yahoo!-branded user interface and reduced to a simple pipe that delivers broadcast television. Without their own proprietary IPG being used, how can they sell pay-per-view and VOD movies? How can they sell their premium sports packages? A fortune in incremental revenue is suddenly at risk, and the possible loss of identity with their subscribers would have a catastrophic financial impact on traditional PayTV providers. Simply stated, adding an unregulated and "unwalled" Internet connection to the TV experience, and then allowing a company like Yahoo! to steal the IPG interface, is the last thing any rational PayTV operator wants to see.

The Bottom Line

The web has revolutionized every market it has touched. How fitting that the revolution in entertainment should be brought into sharp focus by a child of its domain. Yahoo! has evolved beyond the simple web portal of its youth into a new type of system operator - network agnostic virtual operator (NAVO, if you will) that doesn't own multi-systems but rides its multiple services on the networks of others. Through its personal entertainment guide, the NAVO can reach users through their cellphones, PCs, and TVs delivering content whenever and wherever they want.

Yahoo! has taken the next step in challenging the dominance of the traditional MSOs. Brian Roberts and Rupert Murdoch will likely look back in the coming years and ask where all their incremental revenue has gone. One thing is for sure; Terry Semel knows!

About The Diffusion Group (TDG) -
The Diffusion Group is a strategic research and consulting firm focused on the new media and digital home markets. Using a unique blend of consumer insights, executive-level consultants, and hands-on technical experts, we produce more than just research - we create Intelligence in Action™.

TDG is committed to providing market research and strategic consulting services based on conservative, real-world analysis and forecasts grounded in consumer research.

For more information about The Diffusion Group or to sign up for our free weekly TDG Opinions newsletter, visit our website at www.thediffusiongroup.com.

ENDS

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