Not Even Community Could Save Yahoo’s TV Dreams
We talk a lot about the Golden Age of Television. What we talk less about, however, are the casualties of the war for programming dominance. Amazon’s Transparent winning awards and Netflix’s House of Cards launching a binge-watching boom are huge victories in the struggle to validate streaming TV, but there have been losses as well—and now Yahoo has lost a huge battle.
Late yesterday, as the company relayed its third quarter earnings, Yahoo also announced that its slate—led by the reboot of Community, as well as Sin City Saints and Other Space—had resulted in a $42 million loss. As such, it would likely pull the plug on its original series.
“We thought long and hard about it, and what we concluded is (for) certain of our original video (series), we couldn’t see a way to make money over time,” company CFO Ken Goldman told investors. “We’re not saying we’re not going to do these at all in the future. But … it didn’t work the way we had hoped it to work, and we’ve decided to move on.”
What went wrong? Well, for one, Community was already a niche property when Yahoo decided to save it; it had generated paltry numbers for NBC for years before being cancelled, and had lost a good share of its audience after showrunner Dan Harmon was fired in 2012. (He returned to the show after a year away.) Putting it on a platform that’s a tiny blip on the streaming landscape didn’t help. Yes, most people know the name Yahoo, but they don’t all know that the company has a streaming service, let alone one with the high-profile, baked-into-your-new-flatscreen prominence of Netflix or Amazon Instant.
Oh man. Yahoo lost a lot of money by loving Community. Now THAT makes me remorseful. They were so supportive I hate that it wasn’t rewarded.
— Dan Harmon (@danharmon) October 21, 2015
“TV is a hit-based business. While people hear about the successes that companies like Amazon have had backing original content, rarely do people count the bodies Amazon has tossed aside—those shows that never made it to general awareness,” says Jame McQuivey, a Forrester analyst. “Yahoo’s mishap with Community is partly the economics of the business … but partly because by picking up a show that had been cancelled by a network, it was already working with content that was risky.”
Make no mistake: this isn’t the last time something like this will happen. There’s simply too much to watch and too many places to watch it. Estimates show that some 400 original shows will hit viewers this year between networks, streaming services, cable, and other outlets. It’s great that there’s a show for every viewership niche, but betting on a show that was already struggling—and then letting creator Dan Harmon spin it up any way he wanted—made for a slope so slippery that Community couldn’t find a foothold.
Like it or not, it’s time to reconsider this whole “Streaming Can Save Our Show!” mentality. (Sorry, Firefly.) Netflix has had some success with resuscitations like Arrested Development and Wet Hot American Summer: First Day of Camp, but both shows gained a huge advantage from the service’s user base, massive library, and recommendation engine. (Come for Parks and Recreation, stay for this other thing Amy Poehler did!) It has what Kennan Venkateshwar, Barclays’ head of equity research for media, cable, and satellite, calls a “whole ecosystem of content.”
More importantly, Netflix made itself an original-programming player with original programming. House of Cards was something new—as was Transparent for Amazon, The Knick for Cinemax, Unreal for Lifetime, Mr. Robot for USA, and every success story on every network or platform imaginable. Hulu picking up The Mindy Project pleased the show’s fans, but it didn’t transform Hulu into an original-content powerhouse; that’s more likely to happen next year, when the company releases James Franco-starring Stephen King adaptation miniseries 11/22/63.
Is Yahoo’s blunder with Community a sign we’ve plateaued in our desire for yet another streaming service (or, perhaps, yet another reboot of an old fan favorite)? Not so fast. There’s plenty of room for new platforms. The thing is, their creators just need to understand that the cost of producing original content is the same whether the network is NBC or Netflix—that $42 million doesn’t care who spends it. In order to succeed, platforms need to do the math to bring viewers to their new prestige project. “There has to be some mapping between that show and the metadata which links that show to all the other shows that are similar,” Venkatashwar says. “There could still be a lot more of these platforms before people start rearing back.”