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Shopping Into Convergence, Cable or Not

12/03/2000 7:00 PM Eastern

After overdosing on those streaming-media hopefuls at last week's Western Show, you may actually be convinced that the Web is the next television. If that's the case, what's the best way to monetize it?

Home shopping.

But wait! The biggest names in Web portals are already moving down that road-with or without cable. And to make it more interesting, they're forming alliances of convenience with media companies that are already involved in teleshopping.

About a week before the Los Angeles cable fiesta (or was that
siesta
?), Yahoo! Inc. unveiled Yahoo! Shopping Vision, a rich-media extension of the Web portal company's existing merchandising feature.

Yahoo! ShoppingVision will present streaming video content, including material from its new partners, ValueVision International (which is also escalating its relationship with NBC) and TechTV (formerly ZDTV). Yahoo!, which already claims to be the Web's "No. 1 portal shopping destination" (based on Nielsen Media Research/NetRatings' September survey), will let online "viewsers" watch the streaming video content and purchase merchandise from the programs through a mouse-click. No advanced set-top box deployment required.

The integrated entertainment and shopping capability is based on the structure now offered at Yahoo! FinanceVision, another part of Yahoo!'s strategy to insert rich media (i.e. extensive graphics and full-motion video) throughout its lineup.

The shopping component will also be integrated with the Yahoo! Wallet interface, which means that as customers see products in the streaming video window, information and links to the merchandise that is being displayed or described will simultaneously appear in a window adjoining the video stream.

The deals with ValueVision International Inc. and TechTV underscore the opportunities in convergence.

ValueVision will provide live programming 24 hours a day, as well as archived video content. TechTV shows (especially the consumer-electronics and PC product reviews) will be adapted for the streaming format and distribution via Yahoo! ShoppingVision.

Some programs from both networks, including ValueVision's jewelry, watches and electronics categories, will appear on Yahoo! Auctions and elsewhere throughout the Yahoo! collection of sites.

On the heels of the Yahoo! deal, ValueVision also formed a marketing alliance with uBid Inc., a consumer online auction site. The objective of this pact is to drive active auction customers between Web and TV shopping venues.

ValueVision and uBid will co- produce programming for biweekly shows on the ValueVision network, simulcast via both companies' Web sites. The firms estimate that their combined customer base is 40 million Internet users and TV viewers.

Meanwhile, America Online Inc.-which already has its own collection of shopping sites primed for streaming-media enhancement-looks like another portal ready to expand its services. AOL's existing alliances with merchants and programmers suggest a mighty streaming assault, although nothing is likely to emerge until after the AOL-Time Warner Inc. merger closes.

The most intriguing element of the Yahoo! and ValueVision deals is their impact on NBC, which has its own agenda as portal player. The new NBC Internet Inc. (NBCi) Web service, which replaced the short-lived Snap! portal, is touting its high-speed connections, mainly through its Telocity digital-subscriber line alliance.

Indeed, NBC's on-air promotions for NBCi take a swipe at AOL and Yahoo! Yet during last month's deal-making spree, NBC and ValueVision signed a 10-year licensing agreement, which calls for the rebranding of Value- Vision as an NBC shopping channel, and includes use of the Peacock logo around the work. The deal also grants NBC parent General Electric Co. warrants to buy 6 million shares of ValueVision.

There's some must-see corporate drama, as ValueVision juggles its NBC connection (i.e. investment) with its new Yahoo! ShoppingVision role. It gives "monetizing" a new thrill.

Lest the cable shopping giants seem left out of this online shopping binge, let's remember that last July, HSN and Excite@Home Corp. set up a strategic alliance to create and simulcast live interactive shopping channels. The co-branded shows are to be transmitted online at Excite.com and on HSN's TV networks. They have yet to be seen.

The Cable & Telecommunications Association for Marketing preface to last week's cable show focused on streaming-media opportunities. That's appropriate, since CTAM was among the first organizations to recognize the role of TV shopping in the new cable mix more than a decade ago.

But in the next world of interactive shopping, there are mighty competitors seeking to leverage their way into the clicks-and-mortar malls. Kmart Corp. claims nearly 2 million customers for its Bluelight.com free Web-access service, which is surrounded by targeted merchandising offers. And speaking of targets, Target Corp.'s top-level alliance with AOL is already paying off.

Another interactive shopping veteran-J.C. Penney Co., which actually launched its own interactive cable shopping service more than a decade ago-has again become one of the top-performing Web merchants.

These companies are eyeing streaming content as part of their merchandising agenda.

The technological assault-especially by streaming vendors-might make cable companies think that their broadband lines are the coveted entry route for this new breed of telemerchant. That's not necessarily so.

Like any aggressive shopkeeper, these guys are looking for any channels that will sell more of what they've got to offer. The real question is, "Who's buying?"


I-Way Patrol columnist Gary Arlen insists Char Beales remembers the first time he whispered the word "shopping" into her ear.

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