by Scott Bass
September 5, 2000
|
Streamingmedia.com reporter Scott Bass recently caught up with CEO Jeff Morris to chat about Yack and its plan to be the premier internet programming guide.
Q: Looking at recent news with Yack, you guys were recently named by the government of Singapore as their official program guide and looking over some of the things that you guys have done recently, you’ve been making strategical alliances all over Europe. Does that mean that the U.S. is really just a small slice of the pie?
No. I think it’s safe to say that our primary business today is in the U.S. But we are very focused on establishing an international presence as quickly as possible. Certainly, what is interesting, is that while the Internet is global, most of the content (we estimate between two-thirds and three-quarters of all on demand and live events) actually originate from North America in the English language. We think that is going to change over time. So we’re very interested in moving out and bringing our product and our proprietary technology out to the rest of the world as well as setting up alliances in various regions where we can layer on local content and work with local players. So certainly the announcement you just referred to with Singapore One, is part of that. We’ve announced deals with British Telecom. We’ve announced deals with World Online. We’ve announced deals with FreeServe. So the UK and a lot of Europe we’ve gotten a pretty good foothold in. We’re looking to ratchet those up. So the global strategy is one leg of our corporate initiative and it’s certainly an important one. But I would suggest that our primary focus, right here and now, is just domestic U.S.
Q: In other recent news, you recently acquired one of your competitors, ChannelSeek.com. Tom Britt was actually one of the first people that was kind enough to grant me an interview when I started doing this stuff.
He’s a fabulous guy and I’m very excited at being able to work with him now. ChannelSeek was clearly, as you correctly identified, a competitor to us. They were probably our closest competitor. We found ourselves with such a shared vision that we felt that the time was right for market conditions, et cetera to combine our efforts and to combine our assets and to move ahead in lock step as a single organization. So we announced that acquisition, about six weeks ago. We are still in the final stages now of closing the deal and they bring to us a real nice running start in the broadband space, which has been their primary focus. It deals with quite a few DSL operators representing probably about 70% of total DSL reach at this point. We’re also working on a deal with RoadRunner which I can’t talk much about.
What we are trying to do is simplify life on every end of it. Simplify it for the consumer. Simplify it for the distributor and move forward. So, yes, we are very excited about bringing ChannelSeek into the fold. Tom is a very smart guy and he’s got a lot of relationships. He’s well known in the industry and well liked in the industry. I think that bringing his vision and Yack’s together is just a stroke of great fortune.
Q: ChannelSeek started publishing a monthly print guide a few months back. I see you're going to continue publishing the ChannelSeek guide as the Yack guide. Are there going to be any changes or is it going to be business as usual?
We are going to work on it. I think it was a really bold and brilliant stroke for Tom and for ChannelSeek. It certainly got my attention with [ChannelSeek] as a competitor, when he came out with that guide. We have re-branded the guide now. The first issue as the Yack.com guide has already gone out. We’ve got a circulation of a hundred thousand plus broadband users and we’re looking to improve it as much as we can. We’ve had a few more assets we’ve been able throw at it from the Yack side and I think it’s just going to look bigger and better and it will grow in reach. It will grow in quantity. It will grow in quality over the next couple of months and I think it will be a very fabulous promotional piece for our content producer partners and a fabulous educational, promotional piece for broadband distributors as well as an extremely helpful for consumers. So those are the three key constituencies and as long as we can keep them all happy in understanding of what’s going on, it’s a wonderful tool to evangelize the richness of content available on the web now.
Q: For quite some time, Yack.com has been in what’s been dubbed as rapid expansion mode. How much longer is that going to last and what is the ultimate goal?
Well, nothing short of total world domination.
"The notion of 'what’s on the web tonight' will soon be as pervasive as 'what's on TV tonight.'" – Jeff Morris, CEO of Yack.com
Q: Okay.
I would say we continue in that. If anything, we are looking to expand that. We are in conversations now with a number of players on the strategical alliance front. We are looking at a bunch of new distribution relationships that will be expanding our reach. We have grown our event producer network now. We are up to about 260 event producers, all of whom have voluntarily joined and signed agreements with us who are pushing their listings to us. We are going to look for ways to better serve them. Get them greater and greater exposure. When we add in the ChannelSeek, content producers will be pushing close to 300, which is absolutely unprecedented. These are all major players who are pushing their content and event listings to us. We are also looking to grow out into other media. So expect to see us not only in our own print guide but also in other print vehicles soon. And I don’t think other media will be far away either. I have a vision that the notion of "what’s on the web tonight" will soon be as pervasive as “what’s on TV tonight.” Therefore, I think ultimately every newspaper in the country will be listing and looking for someone who can provide them with a “turn key” operation of web listings for the day or for the week. And, I think radio is going to be an interesting vehicle for that and television as well. So stay tuned.
Q: I think one of the reasons why I like Yack and probably the reasons why you’ve enjoyed so much success, is that you do offer a lot of things that your competitors don’t. We just talked about the guide that’s now a Yack product. But also you’re working on a Yack tool bar. Can you tell me a little bit about what convenience that offers?
Through our relationships, we’ve had, for some months now, a very interesting start up called, At Hoc. They are creating a branded tool bar that is a very thin download and is a persistent presence right under the browser that enables you to get right into Yack and drill down to whatever level of granularity you would want within a category, as well as, search for an event. We found that the people who have downloaded that (and probably number a couple thousand people at this point) are visiting us much more frequently. And, people get a lot more value out of the service by the persistent nature of it on their screen.
The other thing that in terms of us growing and gaining momentum is that we’ve been coming out with basically new products on an almost monthly basis. Back in January, we launched the Internet radio guide with over 4,000 radio stations in it and we are getting ready to wrap that up to an even larger number shortly. And then about a month later we launched the on-line film guide. Both of these, I think by the way, were first. There are probably others who are looking to these kinds of things but we’ve had this up and running for some time. We have also launched an animation guide. We’ve had a guide to major league baseball up, 5,000 audio broadcasts of every major league baseball game and any other chats that were appropriate. And we are actually data testing right now a teen portal or a guide to web events with a focus on the 18 to 24 age group that’s called Yackster. [Editor's note: Yackster launched last week, after this interview was completed.]
We’ve also been active in putting together a coalition with some of our event producer partners, trying to work with them to protect issues that we consider very critical giving all the news about Napster and Scour. We have come down clearly on the side of protecting intellectual property and trying to protect against any copyright infringement and we are putting together a coalition of event producer members, as well as, any others who want to join and get into a dialogue with us about the issues and possible solutions to the issues. That’s been another announcement that we’ve made.
Q: And then you’re referring to, I guess the term that’s being used is “stream tapping?”
Which is simply one other iteration of anything that has to do with distributing content and denying the producers or the creative players behind that content. Or the rights holders, the opportunity to brand and monitor that. Stream tapping in particular is something that’s been going on for sometime, which is basically, if you serve us someone’s stream on your site, let them pay for the hosting and then you replace their ads with your ads, their brand with your brand. We feel that is something that’s perhaps next– we’ve lived through ICraveTV, we lived through RecordTV.com. We all know what’s going on with Napster. We’ve seen Scour Exchange with video. And by the way, a lot of this, I applaud from a technical perspective,--some of these peer-to-peer technologies. It’s innovative, creative. It’s fabulous breakthrough technology. Much of it is great from a user experience. My background is television though and I can tell you it is reminiscent of something the programming industry, broadcast and cable programmers live through, which was, you may remember back to the day when satellite TV meant 12-foot dishes. What were they three to five meter dishes?
"[Napster file sharing] technology does a disservice to consumers because people will not be incentived to create content and distribute it over the web and to let the web become the full fledged media distribution platform." --Morris
Q: Uh-huh.
These huge big things and they cost $5,000 and anything that came from the sky was free. It took four or five years to put the genie back in the box and come up with inscription technology that was efficiently industrial strength and conditional access that enabled people, programmers – it was one thing when they were a couple hundred thousand big dish owners. They were called TVRO at the time. “television receive only.” But when that became a half a million and it looked like it was going to keep climbing, that became a major economic disincentive for programmers and in fact, the PBS business, Direct TV, Hughes, and EchoStar, have flourished ever since. Inscription technology and traditional access have been in place. The cost of the hardware has come down and people pay a monthly subscription fee for the content. I think there are analogies to what happened there and to what’s happening on the web now. I think it was an inevitability to a creative technology that would enable people to distribute content, whether they had permission or not. But, I think there is equally an inevitability and certainly a profit motivation or incentive for content producers to protect that copyright because if they can ultimately, this technology does a disservice to consumers because people will not be incentive to create content and distribute it over the web and to let the web become the full fledged media distribution platform. It really is or can be if there’s a concern about the ability to drive profits from it.
Q: Given your experience, is the analogy fair in the sense that the genie will be relatively easily put back in the bottle as it was with satellite in the 80’s?
No. It took four years.
Q: Are we looking at that kind of a challenge or something much worse?
Well, I think the technology will probably materialize in less time because the rate of change of technology has been increasing in such a dramatic rate over the last decade or so. But with that said, there are a lot of very smart people out there in the world who are willing to invest a lot of their own personal time and effort to find ways to circumvent that. I think ultimately, it will require a lot of elements coming into play almost simultaneously. Including, getting pricing down to a reasonable level and make sure that’s it’s worth people’s while to play on a more ethical basis than a less ethical basis. So in terms of a prediction for how quickly the cheating can be put back, I think that’s a tough one and really rests on a number of different constituency groups and how they choose to handle this. Clearly, the music industry has been hit hardest, but it is very equally clear that television and film entertainment is just around the corner.
Q: Absolutely.
And all told, that’s a lot of – there’s a lot of money in those industries and a lot of concern. And I think from the consumer perspective–in fact I wrote an editorial in our most recent Yack guide, which talks to the point of, there’s no free lunch. We’ve all heard about the, “lose weight without exercising,” and “learn to yodel in five minutes,” or whatever. And there are just offers that are sometimes too good to be true. The notion of, “get access to every movie and every song ever written in your home for free,” falls into that category. At a certain point, we run the risk of killing the golden goose because to a degree, it’s one thing to say, "music labels can afford it". That may or may not be true. That’s not really the point. There are a lot of bands that are up and coming bands, or independent film creators, who really do need to be able to monitor their content to put bread on the table and to continue producing their works. And the answer is, if they are going to be denied that opportunity and there is no way around it, then they are simply not going to do it.
Q: They’ll change careers.
That’s a good one. Go into market research.
Q: Exactly. That’s funny because I’m an amateur musician actually so I completely appreciate what you’re saying. The small guys are the hardest hit.
Absolutely. And I fully expect that there will be plenty of content that will be free to the user. Plenty. But at the same time, the garage band, the struggling musician that’s looking to get started, may find it in their interest to put some of their music out on the web for free. But over time, if they are going to make a career out of it, there comes a time that they catch on. People are interested. People like them. Maybe there’s a record deal in the offering. And all of a sudden they are on the other side of the fence and now saying, "Now I need to drive some revenue from this".
Q: Wrapping up, are we in the middle of a broadband explosion or is this the calm before the storm and where do you guys expect to be in a year from now?
In terms of penetration or in terms of -- household penetration of broadband are you asking or in terms of content? Because I think the answer is, actually we are in the middle of an explosion on both sides. Actually, let’s talk on the content side for one quick second. If you have a DBS connection, meaning in a direct broadcast satellite, you’ve got over 300 channels available to you. Do the math. That’s 7,000 hours a day. There is easily a hundred times that in terms of number of hours of content available in terms of streaming media on the web. If you look at how many shows is that on television, you’ve got 30 minute, 60 minute, 90 minute and 120 minute shows. On the web, you’ve got two-minute, three-minute, five-minute pieces. So the multiple is probably a thousand if not ten thousands and the same with the number of content providers. Obviously, the costs of producing content on the web is so great, is so much less, than the cost of producing it from broadcast that again, you’ve got these huge multiples in terms of the number of content providers out there. So there is this explosion of content. That is of course the reason that Yack has a value proposition. But clearly, every live event that occurs on the web now, the amount of the pool and reservoir of this content is growing at an exponential rate. Every live event, every cybercast, every time there’s a new web experience at the stream, it’s almost instantaneously archived and then made available on an on demand basis. So it’s growing at truly exponential rates and on a daily basis.
As far as broadband, I think RoadRunner is just about to or has just hit a million subscribers. AtHome, I think is above that number. With a competitive marketing environment out there, I think what we’ve been waiting for quite some years, has been the case of a digital set top boxes in the cable industry. I think we are right now at the point where we are going to see penetration begin to ramp up. I think there are a number of critical gaining factors here including pricing, but I think that all the pieces of the puzzle are beginning to fit into place and that a year from now we’re going to be looking at dramatically increased broadband penetration. I for one believe that we will become ubiquitous at some point. I think it will become a more or less a commodity offering and the cost will come down dramatically and that will help facilitate further penetration. All told, it will probably be five to ten years until we’re looking at the ubiquitous existence of broadband but I think we are going to see the rate of penetration begin to increase dramatically even over the next 12 months.
