The focal point of this effort will be a premium video-highlight service called "FIFA VIP Club." For $19.95, subscribers can view video streams through dial-up and broadband connections for each of the 64 World Cup games. Fans around the world itching to relive plays by English star David Beckham or the speedy Brazilian forward Ronaldo will be able to watch highlights between two hours and hour hours after each game ends. All of the four-minute highlight reels will be available in six languages. In one caveat to subscribers, Yahoo! warns that it may not be able to guarantee access to the video feeds during peak hours. FIFA originally attached Internet retransmission rights to its $1.78m (1.9bn euros) broadcast licensing deal with KirchSport. To rebroadcast highlights, Yahoo! and FIFA had to relicense the Internet rights from the German media company. "Working with original rights-holder FIFA, we found a way to break through into new territory to complement what has previously been in the realm of broadcast media only," said Tonya Antonucci, general manager of the Yahoo!-FIFA partnership. The video highlights will be broadcast only in Microsoft's Windows Media, excluding RealNetworks and Apple Computer's QuickTime technology. Yahoo! said the decision was based on a cost-benefit analysis, but competitive pressure may have been a factor. Yahoo! is considering launching a subscription-only video streaming service, a move that would bring it into direct competition with RealNetworks' RealOne service. RealOne counts some 600,000 subscribers who pay between $9.95 and $19.95 a month for access to audio and video content, including live radio Major League Baseball and NBA game broadcasts, as well as music and news. RealOne has cut several exclusive content agreements, including a recent deal that saw ABCNews.com pull its video from Yahoo!'s site. Aside from the subscriptions for video highlights, the Yahoo!-FIFA site is selling advertising and sponsorships. Major marketers that target sports fans, such as Budweiser, MasterCard and United Airlines, have signed on to the site. Since many of the advertisers have never worked with Yahoo!, the company hopes these relationships will transfer into marketing agreements on its flagship site. Finally, sales of every shirt, game ball, tote bag or other product purchased on the World Cup site will be divided between Yahoo! and FIFA. The Web portal also must share all revenue generated from advertising and subscriptions with FIFA. Less than half of the estimated $35m to $40m the company has committed to FIFA is in cash, according to sources familiar with the deal, with the rest coming in the form of promotions throughout Yahoo!'s network and technology costs for running the World Cup site. "Yahoo! will be looking at the profit and loss to see whether the three revenue streams provide the kind of margins that encourage us to invest in sports relationships either on a regional or global basis," Antonucci said. A sporting chance
Sports licensing on the Internet is still in its infancy, but the demand is clear. Web companies are always looking for ways to differentiate from their competitors, and one way to do that is through content. Sports leagues have the content that Web media sites crave, and reading up on games has become one of the most popular functions of the Web. Sports leagues have been able to sell TV broadcast rights for billions of dollars, an economic foundation that few are willing to shake. In many cases, Internet rights have been tied closely to broadcast rights. For example, since General Electric's NBC has paid $3.5bn for the exclusive broadcast rights through the 2008 Olympic Games, all Internet-related deals for Olympic coverage must go through the TV network. Such was the case in the 2002 Winter Olympic Games in Salt Lake City, which chose Microsoft's MSN to host the official site. Microsoft, which has a joint venture with NBC in the online and cable news channel MSNBC, heralded the agreement as a major competitive win against America Online and Yahoo! because the software giant could offer content available nowhere else. "Clearly (sports licensing deals are) a great opportunity for MSN to reach a broader audience and for sports leagues to reach a broader consumer base as well," said MSN product manager Lisa Gurry. "We think the folks we worked with have looked toward industry leaders on the Internet to partner with." Baseball has been the most aggressive in taking its franchise online. The MLB brought all of its Internet rights under its control in 2000, taking charge of all league Web sites and putting online radio broadcasts behind a subscription wall. In 2001, RealNetworks paid $20m for exclusive rights to broadcast games for three years -- a deal that has become the cornerstone of its RealOne subscription business. But MLB also has its own online ambitions and last year announced plans to stream a handful of live games over its site. The National Football League has taken a more traditional approach, licensing all production and hosting for its NFL.com site to CBS SportsLine.com. SportsLine is paying the NFL more than $24m in cash over the next five years for those rights, which include some limited access to video. The National Hockey League also has a deal with Microsoft to promote MSN content and tools heavily throughout its site. A world of fans
Despite having FIFA as its ally, Yahoo! still faces considerable competition from well-established players for soccer fans' attention. ESPN.com has launched a network of sites including ESPNsoccernet.com and Spanish-language site ESPNdeportes.com to lure information-hungry fans. The Web sites will feature ESPN writers in Japan and Korea reporting on games, statistics, team and player profiles, and providing live interactive scoring for games. Given soccer's soaring popularity outside the United States, Yahoo! also faces competition from international media outlets with World Cup sites that closely follow their home teams. Established US news media such as ESPN or Fox Sports may have an editorial advantage, given their reputation for in-depth coverage. But Yahoo!'s Antonucci said she believes exclusivity has its advantages. Daily lineups for each match will be posted on the site before they appear elsewhere, along with up-to-the-minute data on games and players. And having video rebroadcast rights doesn't hurt either. "This is offering video content to an event that will have over one billion people watching it worldwide," said P.J. McNealy, research director at GartnerG2, a division of research firm Gartner. "From that standpoint, it will be a big boost for them."
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