Yahoo! Inc. has built up a business running Webcasts for corporate clients, and now it is giving them the option to do it themselves. After offering Yahoo! Broadcast as a managed service, the company recently announced it would start licensing its Webcast Studio Professional software to companies, allowing them to create their own Webcasts — and save money in the process. For companies that sponsor 50 or more Web events a year, it can add up to big savings, said Yahoo! vice president of enterprise solutions Jim Lewandowski.
For a $250,000 up-front licensing fee, customers can buy Yahoo!'s tools and training to create their own Internet broadcasts. Yahoo! then charges a per-event broadcast fee of $2,000 to $5,000, depending on the scale of the broadcast.
In comparison, as a fully managed service, Yahoo! typically charges $15,000 per event, if a company staged 50 events a year, it would pay a maximum $500,000 annually, compared to $750,000 under the old system.
The cost savings improve after the first year. Companies are required to pay a renewal fee for subsequent years that equals roughly 60 percent of the original $250,000 fee with some variation based on the number of Webcasts a company stages.
While Yahoo! will continue to manage Webcasts for other clients, for these large-volume customers "it is much more affordable to do it using Webcast studio professional and managing it yourself rather than coming to companies like Yahoo! and having us provide a full-service offering for the broadcasts," Lewandowski said.
According to Lewandowski, 50 events is a relatively small number. Many large companies use Web broadcasts for everything from investor information events to training for sales forces and internal communications, he said.
Marc Harrison, Jupiter's research director, agreed many larger corporations are indeed reaching that volume for corporate Webcasting.
"Particularly for companies that want to be able to do a lot of Webcasts — maybe in the financial service industry, maybe where they do 10 or more Webcasts a week — it starts to make sense economically to bring some of the production and delivery of these events in-house," Harrison said.
Figures from Jupiter Media Metrix indicate Yahoo! is aiming for no small market. The analyst firm projects the market for software and services surrounding corporate Webcasting will rise to $2.8 billion in 2005, up from $140 million in 2000.
For Yahoo!, a good early sign of this is the fact that nine major customers signed up for the Webcast Studio Professional tools even before the product was officially announced.
"We are at a similar kind of point from an adoption perspective with Internet broadcasting, although I predict this will have a much quicker uptake than e-mail did," Lewandowski said. "What we are seeing from an Internet broadcasting perspective now is several large Fortune 500, Global 1,000 customers that are beginning to mass-adopt the usage of Internet broadcasting throughout their enterprise."
The package includes a one or two-day training session with Yahoo! technical advisors that covers how to use the Webcast tools. While that does shift the work to a company employee, it is not necessarily a full-time job.
"This would just be some extra skills that somebody would have in the communications group or maybe in an IT department," Lewandowski said. "Once you are trained with the product, it is a very, very quick process. It depends on how elaborate your broadcast is — for example, if you do a broadcast with audio and slides, that's something that somebody could put together in less than an hour's time."
Lewandowski said that with full control to create their own content rather than coordinating with Yahoo!, it may encourage companies to stage more Webcasts in a given year.
"That's what is happening in the marketplace right now, and this tool is really just an enabler to allow people to produce their own broadcasts and do it much quicker, much more customized to the way they want it on their business," he said.
Harrison sees a greater opportunity for corporate Webcasting in external applications like corporate partner training and product launches. But for now, Yahoo! is simply following the existing market demand.
"I think Yahoo! has done a good job of following what their customers say they want," Harrison said. "And I think that the corporate Webcasting market is in the state of development right now where corporations are only focusing on internal now. So they are following the money right now, which is a good, sustainable strategy."