Yahoo Screen is no more. The troubled tech giant has killed its highly-hyped and high-spending video division less than four years after its launch.
The Yahoo division joins Xbox Entertainment Studios on the growing pile of ambitious video divisions trying to compete with television and failing.
Yahoo’s video concern, which boasted more than 1,000 hours of programming and a partnership with MTV and Comedy Central parent company Viacom when it first went live in September 2013, had trouble attracting an audience and ultimately became more famous for its failures than its successes.
The main company is undergoing a complex “reverse-spin” uncoupling from its richest asset, a stake in Chinese e-commerce platform Alibaba – a move CEO Marissa Mayer announced the day before she gave birth to twin girls.
Yahoo Screen was one of the company’s big swings during the push to create more outlets for digital video advertising a few years ago. “At Yahoo, we’re constantly reviewing and iterating on our products as we strive to create the best user experience,” a spokeswoman told the Guardian.
“With that in mind, video content from Yahoo as well as our partners has been transitioned from Yahoo Screen to our Digital Magazine properties so users can discover complementary content in one place.” The news was first reported by Variety.
The enterprise will probably be best remembered for picking up NBC’s critically beloved, commercially dicey sitcom Community for one more season after NBC dropped the show and just hours before the actors’ contracts were set to expire.
The move may have been great for the show’s fans, but it didn’t budge Yahoo Screen’s bottom line. Part of that may be due to Yahoo’s laser focus on its own portal – the content aspired to compete with television but was almost entirely browser-bound, minus a few buggy apps (one on the Xbox, one on the Apple TV, and one on Chromecast).
The company took a $42m impairment charge on the value of its video assets in the third quarter of 2015, and CFO Ken Goldman singled out Community and the other two series Yahoo had picked up when pressed by analysts to explain himself. “We’re not saying we’re not going to do these at all in the future, but what we are saying is in three cases at least, it didn’t work the way we had hoped it to work,” Goldman told investors.
At its heart, Yahoo Screen was always driven by the need to create more places for video ads to live, and like abortive video divisions at competitors including Microsoft, the group was neither able to out-YouTube YouTube nor eat into traditional TV networks’ audiences.
At the time, ad sales executives in the TV world characterized the shift to digital video as more annoying than threatening – big spenders now had a place they could threaten to take their money if they didn’t want to increase their investment in a traditional network that year, but few actually shifted their cash over to TV-ish projects online.
When then CEO Ross Levinsohn, who spearheaded the project, unveiled Yahoo Screen in 2012, he was enthusiastic about its potential. “I enjoy watching cats on skateboards chasing laser pointers as much as anybody,” he scoffed. “We’re shooting a little higher than that here.”
