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Yahoo! Uses SpotLife for Video E-Mail

On Monday, Yahoo! announced that it has chosen SpotLife to add video to its Yahoo! Mail (mail.yahoo.com) service. Terms of the deal were not announced.

The service is being rolled out immediately, although some users may have found it by accident almost a week earlier, as Yahoo!’s banks of servers have had it installed. Already, Yahoo! has added a live webcam feature to its instant messaging service, as well as a video messaging feature in its member directory (powered by iClips).

"We believe this new feature will provide Yahoo! Mail users with a unique new way to communicate with family, friends and business associates," said Lisa Pollock, director of Messaging Products for Yahoo!, in a statement. "Our agreement with SpotLife further supports Yahoo! Mail’s strategy to continue to develop and integrate innovative, new features that add real value to people’s lives."

Adding video to an e-mail is as easy as choosing the "Add Video" option on Yahoo! Mail, and is much like adding attachments. Users must agree to download a small plug-in called Composer, which allows them to upload existing AVI files or capture live video from a webcam. The software comes with basic editing features that include trimming, playback and saving. SpotLife’s automatically compresses and uploads the video to SpotLife’s servers where they are stored for about 10 days before they’re deleted. The e-mail recipient simply receives a text message with a URL where they can play back the video file. Currently, Composer only works with Windows Media files and is limited to video that is thirty seconds long.

Interestingly, SpotLife chose to use progessive downloading and not streaming for sending the video. According to SpotLife CEO John Walsh, this was because many Yahoo! Mail users are on modems and won’t be able to stream good quality video. "The experience is not greater, but it’s smoother with progressive downloading," said Walsh.

Free Now, Pay Later?

Also interesting is that Yahoo! chose to outsource the video e-mail service rather than do it itself. Ever since Yahoo! acquired Broadcast.com in 1999, it has been integrating streaming into its core businesses. Just last week, Yahoo! announced it was cutting jobs and looking to generate more non-advertising revenue. Although Walsh didn’t want to speculate on Yahoo’s motivation for outsourcing, he did say that SpotLife has a "vast amount" of experience in the personal broadcasting space.

The Yahoo!/SpotLife video e-mail service is free for now, although it’s possible that Yahoo! may chose to monetize it later. Walsh speculated that Yahoo! may charge for in the future, but said that it was purely Yahoo!’s decision. "I can’t speak for Yahoo!," he said. "It’s a question of a new market application. Let’s get it out there and implement it and see if customers like it to make a business decision down the road."

But it seems Yahoo! is looking at advertising to support this new venture. All videos sent by users first play a generic 10-15 second video ad. This can be confusing and even frustrating for some users who simply want to view the personalized video e-mails. During the preview last week, most of the video ads shown were public service announcements (PSAs), and not paid ads.

SpotLife wouldn’t comment on the video advertising arrangement and declined to say if the two companies split ad revenue. As of press time, Yahoo! did not return phone calls seeking comment.

Streaming Becoming Mainstream

Overall, the Yahoo! deal is a big step for SpotLife which has suffered in near anonymity running its own personal broadcasting portal since early 2000, allowing users to stream and webcam at SpotLife.com for free. In September, however, SpotLife decided to move to a subscription model, so that anyone who wants to webcast or webcam must sign up for monthly subscriptions. Anyone wanting to view webcasts can do it for free, however.

As a result of the move to subscription, SpotLife lost many users, although Walsh didn’t say how many. He also didn’t say how many subscribers it had gained. Walsh said he expected to lose a number of casual users that weren’t serious about personal video. By going subscription, he said that SpotLife can keep costs down, while getting some additional revenue. Fees for SpotLife.com users start about $3 a month and go to $99 a month for power users.

A few other companies in the personal broadcasting space (like VideoShare, EarthNoise, PopCast and iClips) have disappeared or are focusing on providing services to other Web sites. With Yahoo!’s 80 million active registered users (as of September 2001), this deal can open up the world of streaming and digital media to a whole new audience.

Unfortunately, the video e-mail service is only available to Windows users on both the composing and viewing side. Walsh said that there still hasn’t been a decision whether to support composing for Mac users yet, and is hedging his bet on the large quantity of Windows users. Still, playback should include Mac’s in "two weeks", said Walsh.

"We make it relatively painless for companies like Yahoo!," said Walsh. "It’s attractive for companies like Yahoo! or dating site or auction sites that see video as valuable. The fundamental technology is applicable to any site at the end user level."

Walsh said SpotLife is also looking to incorporate streaming in the future, especially when it comes to the wireless side. "It depends on the application and connection [speed]," said Walsh.

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