Portal firm takes aim at TV content as home entertainment market edges away from live broadcasts.

July 6, 2005

Yahoo plans to announce on Wednesday that it has hired David Katz, a former senior vice president of CBS, to take charge of the Internet portal firm’s entertainment and sports divisions.

According to the Los Angeles Times, Mr. Katz will work with Ira Kurgan, formerly of Fox Broadcasting, and Shawn Hardin, a former executive of NBC’s Internet group. They will report to Lloyd Braun, former chairman of ABC Entertainment Television.

The hiring of Mr. Katz, the fourth TV executive to join Yahoo in recent months, lends credence to the notion that broadcast television will be sternly challenged by the emergence of store-for-play television and video on demand.

With store-for-play, customers will use a device such as a TiVo box to download movies or other programs via broadband. Then they will be able to view the program at their leisure a certain number of times, after which it will be automatically erased from the storage device.

‘The telecoms have to pay attention to what’s happening here.’

-Tom Nolle,

CIMI

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“Sports programming is the only regular form of television entertainment that requires the viewer to be in front of the TV at an appointed time,” said Tom Nolle, president of CIMI, a Voorhees, New Jersey, technology assessment firm. “Even news is not ‘live’ in the true sense of the word, so increasingly the public is switching to some form of store-for-play, or TV when you are ready for it.”

Competing for Access

This opens the door for Internet portal companies such as Yahoo and Google, which can now compete for access to content with cable TV companies and the emerging video products from the telecommunications carriers.

“The TV networks still own the largest repository of content,” said Mr. Nolle. “By hiring TV network executives, Yahoo is gaining the expertise to take advantage of the changing tastes of the viewing public. Yahoo is large enough to contend. TV networks would not enter into a content deal with a small company that they can’t collect a judgment against if they screw up the digital rights.”

The Internet is even competing with broadcast TV for live events. Last Saturday, America Online attracted and supported more than 5 million viewers for its Internet feed of the Live 8 concert without any major meltdowns.

This kind of capacity demonstrates the growing maturity of the technology behind live webcasts. Six years ago, when Victoria`s Secret tried to broadcast a live fashion event, the technology could not handle the demand. Many viewers saw blank screens or very poor video.

“There is going to be a period of about seven years as this all gets sorted out,” said Mr. Nolle. “But once content deals get awarded, they tend to be somewhat exclusive. The telecoms have to pay attention to what’s happening here. The telecoms could end up with a good piece of very premium content but they could end up missing the largest part of the content market—the existing repository, which Yahoo may be after.”