Yahoo to Invest in Original Web Series Programming
By Mike Shields and Douglas MacMillan for The Wall Street Journal
Yahoo Inc. is raising its ambitions in online video, with plans to acquire the kind of original programming that typically winds up on high-end cable-TV networks and streaming services like Netflix, people briefed on the company’s plans said.
The company is close to ordering four Web series, these people said. And unlike in years past, Yahoo isn’t looking for short-form Web originals, but rather 10-episode, half-hour comedies with per-episode budgets ranging from $700,000 to a few million dollars, the people said.
Yahoo Chief Executive Marissa Mayer is hoping to show off TV-caliber content to advertisers on April 28 when Yahoo holds its “NewFront” event that is Internet companies’ answer to upfront ad-sales presentations made by TV networks each spring.
The company is competing in a costly and crowded market for top-notch original TV series. Besides a broad array of cable outlets vying for those shows, new entrants like Netflix Inc., Amazon.com Inc. and Hulu LLC also have entered the fray.
“They’re looking at the same type of shows that Netflix and Amazon are eyeing,” said a person familiar with the situation.
The TV landscape has fragmented over the past several years as consumer habits have changed and new online distribution models have emerged. Plenty of Americans still watch TV: 283 million each month, according to Nielsen. But rather than sitting in front of a TV set to see a show as it airs, many more viewers are watching when they choose, through apps and on-demand services from cable companies, and subscription online services like Netflix and Hulu. Users now binge on entire seasons of programming.
Some users are cutting their pay-TV subscriptions and relying solely on online services. Having original programming of their own to showcase—Netflix’s “Orange Is the New Black” or Amazon’s “Alpha House,” for example—is helping online services attract subscribers.
By offering more high-quality video programming, including originals as well as old episodes of shows like “Saturday Night Live,” Ms. Mayer is aiming to get users to spend more time on the site watching high-price video ads.
Yahoo is also trying to step up competition with Google’s YouTube, which is by far the largest video site, with 12.6 billion video views in January, according to comScore. Yahoo is the fifth-largest, with 384 million.
Yahoo has produced original video series in the past, including Morgan Spurlock’s “Failure Club” reality show, as well as “Electric City,” an animated series created by and starring Tom Hanks that was the company’s first foray into scripted programming when it launched in 2012.
The people briefed on Yahoo’s plans say Ms. Mayer and her chief marketing officer, Kathy Savitt, have reviewed more than 100 projects over the past few months, looking for series that are ready to launch and don’t require a lot of development.