Friday, April 28, 2006

Do Be Adobe

My money in the emerging VOD market is on somewhat of a darkhorse: Adobe, whose acquisition of Macromedia a year ago is starting to look like genius. I've been really impressed by YouTube's streaming quality -- esp. given that they now have 6 million daily users worldwide. They are using Macromedia Flash to deliver the goods. Michelle Malkin's new Vlog, Hot Air, also looks like they are using Flash. Looks great (as does Michelle...), and has never crashed my system or stalled to buffer.

But I think Yahoo's longterm strategy in this sector is pretty smart.

By integrating Yahoo's existing, ZIP-code-based TV listings - which the company has made available for years - into the software the company initially developed for downloading music videos via broadband, Yahoo is putting two and two together, converting users' PCs into a low-cost equivalent of TiVo...without the service charge.

...a user of Yahoo's new Go for TV Beta service can utilize the listing service to program her PC to record video from the card, onto her local hard drive. The video source isn't the Internet, of course, but the cable service, or even a simple coaxial lead from an aerial antenna. The equipment, therefore, is entirely customer-owned, and the service is pre-existing... so they avoid TiVo's service charges. For a three-year service plan, TiVo waives the fee for hardware, but charges customers $16.95 per month. Meanwhile, an ATI TV Wonder Elite PCI card costs about $120 - an investment many of Go for TV's users have already made. Suddenly, Yahoo makes a very compelling case for carving a new niche for itself, not from its old territory of search, but directly from the heart of the burgeoning video-on-demand industry where standards and practices still have yet to be decided.

I was one of Tivo's first few thousand customers, but have never bought stock in the company, mainly because of early patent-issues, and later because it seemed so displaceable by bigger players in the market. Their interface is the best of any DVR available, and their name, like Google, has become an eponymous verb. So maybe they will make it still. More likely, an almost certain takeover candidate.


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