Yahoo: Let’s put on a show!

Yahoo CEO Marissa Mayer
Pictured: Yahoo CEO Marissa Mayer announces the company's Q4 2013 results. Image: IDG

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15 April 2014 | 0

After a two-year period defined by a string of acqui-hires and flat revenue, Yahoo CEO Marissa Mayer is turning her hand to another strategy for returning the portal to profitability: original scripted programming.

According to a report in the Wall Street Journal, Mayer and chief marketing officer Kathy Savitt have been reviewing some 100 projects, with speed of turnaround being key to selection. I haven’t seen the cod philosophy of ‘fail fast, fail cheap’ applied to prestige television – which is slow and expensive to produce – and I doubt anyone will again, so you can’t say Yahoo isn’t an ambitious company but you could add foolhardy and scattershot, as well.

Mayer has brought plenty of mobile and social talent in-house and done an impressive amount of rationalising but Yahoo remains a company without a core product, playing in many spaces but not being well-regarded in any of them. And yet it retains a healthy user base. In December2013, according to comScore, Yahoo-affiliated websites (Yahoo.com, flickr, Yahoo Mail etc.) had a total of 195 million unique visitors from desktop PCs in the US alone, putting it ahead of Facebook and Google. ComScore does not track mobile traffic, so the real picture is likely less impressive but the point remains, there is traffic but where there is traffic is there life?

Breaking Yahoo’s dependence on content partners to focus on its own material is one way to prove it can grow its user base. Revamping its news offering by hiring broadcasters Katie Couric and David Pogue showed Mayer is serious about video news but scripted dramas’ more high-risk, high-reward game will prove an expensive folly for a number of reasons.

First, Yahoo has form in mismanaging video. In 2012, Tom Hanks’ 20-episode animated miniseries Electric City was to be the first ‘online digital blockbuster’ but has instead turned into more of a cross-platform experience, encompassing games, apps and video without Yahoo support. It was not renewed for a second run.

Documentary maker Morgan Spurlock’s Failure Club lasted for 84 episodes until disappearing in late 2012 but its talking heads style presentation meant it could be made with minimal effort. The fact that it lasted as long as it did most likely came down its low production costs and Spurlock’s devotion to the project.

As a semi-regular user of Yahoo products, that I have never heard of these projects tells a tale in itself.

Original
Second, Yahoo has no content around which to base its offering. Netflix and Amazon are prospering form their original productions because they sit in an existing content ecosystem. No one would have signed up for Netflix to see House of Cards on release, but you can be sure it held on to a lot of customers because of it. Similarly, shows like Orange is the New Black either prevent churn entirely or bring people back when a new series is released.

Amazon’s first production, political comedy Alpha House, is into its second series and is about to be followed by seven more ‘Originals’ including X-Files creator Chris Carter’s The After. Without Amazon Prime already delivering movies to 20 million subscribers paying $99 a year new drama would not be commercially viable.

Third, there is the hardware question. Netflix has avoided its service limitations by making itself available on as many platforms as possible, from PC to mobile to competitors’ set-top boxes. Amazon has its forthcoming Fire TV box. Apple has Apple TV. Even Xbox Live and PlayStation manage rental stores with original content. The point is, where there is a physical device there is a solid point of entry to the sitting room. Without a hardware partner Amazon will be in the position of having expensive product with nowhere to put it except on its own sites, which are not considered destinations for this kind of content.

A review of Yahoo’s forthcoming products includes a smart TV platform. Even if there is a platform there needs to be content agreements for it to catch on. As Netflix and Amazon seek to lock down exclusive digital distribution deals with studios and networks (Netflix has exclusive rights to Disney content, for example) there may not be a lot of market left for Yahoo to haggle over.

Without content or hardware support Yahoo is going to fail fast in TV. Failing cheap is not how this show works.

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