AOL, meanwhile, has made video a key part of its turnaround strategy. The company has been offering its customers a "bring your own access" plan for $14.95 a month that includes email and other software, as well as exclusive broadband content such as news clips and music video broadcasts. Just this week, the company announced a new sports-news programme as part of that package.
Creating a video service hits close to home for Yahoo chief executive Terry Semel, the former Warner Brothers co-chief executive who joined Yahoo in May 2001. The longtime Hollywood mogul has taken steps to boost Yahoo's online entertainment assets, engineering the acquisition of music video site Launch Media and the unveiling of Yahoo Platinum, among other things.
To get Platinum off the ground, Semel hired former Warner colleague Jim Moloshok as his point man for securing content from media and entertainment companies. Moloshok once ran Entertaindom, Warner's online entertainment site, but he left in 1999, shortly after parent company Time Warner scrapped plans for a public offering.
During a conference call with Wall Street analysts in July, Semel described Platinum as a "real learning curve" and admitted that Yahoo had not put many resources behind it.
The company has refused to break out subscriber or financial details of Yahoo Platinum, although it has highlighted subscriber gains from other "premium" services such as enhanced email and online personals. Still, the move is a clear admission that Yahoo has failed to convince many Web surfers to pay for its motley collection of video programs.
Even RealNetworks, which operates RealOne, the largest paid video and audio subscription service on the Internet, has seen overall membership stall this year, despite rapid growth in music service Rhapsody and in premium radio.
RealOne charges $9.95 a month for access to a bundle of programming it calls SuperPass, which includes access to movies, news and live audio of Major League Baseball games. RealNetworks announced 1 million paid subscribers in March, sparking a surge of interest in paid video offerings. Since then, however, sign-ups have shown signs of flagging, with total paid subscribers for the company climbing to just 1.15 million in the third quarter, including the addition of 165,000 music subscribers.
