Is Yahoo competing with TiVo in the DV-R market?

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Is Yahoo competing with TiVo in the DV-R market?

Sunnyvale (CA) – It was last January when Yahoo introduced the general public to the brand “Yahoo Go,” at CES in Las Vegas, and when press and spectators were told that the company would be offering interactive video services to the public free of charge. But we’ve heard those terms so many times before, to refer to a variety of different services, from reruns of “Welcome Back, Kotter” to glorified user interfaces enabling spectators to choose their favorite home video of misbehaving pets. Carefully, quietly, Yahoo is rolling out a service which may not only truly suit the term “interactive video,” but may, if successful, change the game for video service providers such as Comcast and Cox.

Over the last week, Yahoo has begun testing of a new feature of its Yahoo Go for TV service, that essentially provides a software-based front end for customers’ existing TV tuner cards. 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.

Using one of five supported name-brand TV tuner cards, including ATI’s TV Wonder Elite and HDTV Wonder, and Nvidia’s Dual TVmce, 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.

Furthermore, the recording takes place using the tuner card’s own drivers, with Yahoo providing the scheduling and the front end. So all indications are that the recordings a user may make utilize whatever common codecs her tuner and graphics cards already support. Without the extra layer of DRM in place, the recordings should be perfectly portable, meaning they can be burned to a DVD-R or video CD, although for now using the user’s own software and not Yahoo’s.

Last February, the general manager of Yahoo Music, Dave Goldberg, urged members of the recording industry at a major convention to cease using DRM as a basis for its business model. “DRM is not a consumer value proposition, it’s a consumer cost,” Yahoo’s corporate music blog quotes Goldberg as saying. “It creates a nice barrier of entry for the tech companies, rather than something that’s beneficial to labels, artists, or consumers.”

Although Yahoo Go for TV is a project from a different division of the company, it’s possible that Yahoo believes it may have hit on a new and lucrative strategy: changing the parameters of a media market typically based on a “closed circuit,” utility-oriented revenue model, into a low-cost, open market approach with an advertising-based revenue model. Go for TV already offers music videos, although not in recordable quality or with recordability, but also not with a price tag attached, either. For now, no DRM is attached to these broadband downloads, mainly because of the lack of recordability there. But if Go for TV can continue to leverage the ability of users to utilize the content they’re already getting, it may never need to employ DRM – especially if the real purpose of its broadband link to the user is mainly to provide a pipeline for advertising.

And while customers use their own hardware, 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.

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