June 11, 2002 2:20 PM PDT
Terra Lycos cues music, movie services
Under its agreement with iFilm, the Waltham, Mass.-based company will provide access to its library of 80,000 movie shorts, trailers and alternative videos, expanding on the portal's entertainment site, Lycos Entertainment. Lycos also plans to use iFilm's advertising technology to bundle commercials with film clips; the two companies will share revenue from the ads. Financial terms of the deal were not disclosed, but the company expects the deal to last for an indefinite period.
Separately, Lycos launched an online music-subscription service in partnership with Listen.com. The service, called Lycos Rhapsody, sells access to a collection of 10,000 albums from four of the five top record labels, including BMG Entertainment, Sony Music Entertainment, EMI Recorded Music and Warner Music Group. After a free trial period in June, the subscription service will sell for between $4 and $9.95 a month.
The moves aim to lift Lycos in two areas: by improving advertising opportunities and subscription revenue. Due to the shrinking ad market, Lycos, along with other major Net publishers, has been hard-pressed to lure marketers to spend online. By streaming entertainment over broadband connections, the company can take advantage of iFilm's iStream technology for incorporating ads into Webcasts. The company aims to appeal to marketers hoping to reach more affluent, at-work visitors.
At the same time, the company is trying to advance the sale of subscription services, like that of an online music venue. Last month, Lycos introduced a paid e-mail service, free of ads, and a rendition of its services for corporations. But it may have a difficult time competing against already established music services like Pressplay and MusicNet.
Still, Lycos is banking on a widening population of people accessing the Internet through high-speed connections, or broadband. David Pritchard, Lycos' senior director for music, TV and film, said more than 50 percent of its audience visits during work hours using a broadband connection.
By striking a deal with iFilm, Lycos aims to compete more fiercely with other movie and entertainment Web sites. According to Jupiter Media Metrix, Lycos Entertainment does not register in the top 30 movie-related sites. Yahoo Movies ranked No. 3 in April, followed by iFilm at No. 6 as the most popular film-destination sites.
"The core strategy in the entertainment space is to build a destination that attracts a significant audience of broadband users, with compelling content that people want to come back to," Pritchard said.