Yahoo appears to have lost its big streaming gamble. The company is now reporting that its video division took a 42 million dollar hit in the third quarter of this year, with expensive shows like the company’s recently-purchased comedy series Community to blame.
This massive loss could spell the end of the tech giant’s foray into high-budget series.
Despite big-name advertisers like Honda, CFO Ken Goldman said that Yahoo was struggling to monetize its newly-acquired series, stating that it, “couldn’t see a way to make money over time.”
Besides Community, Goldman also blamed Yahoo shows Sin City Saints and Other Space as contributors to the financial losses.
A comedy series by Dan Harmon about a group of unlikely friends who meet in a study group at community college, Community ran for five seasons on NBC before being cancelled at the network. The show was then bought by Yahoo for a Netflix-style revival, producing and exclusively streaming season 6 this year.
The show was part of a big play by the company, with executives focused on strengthening the quality of its exclusive streaming content. Former chief marketing officer Kathy Savitt was largely responsible for Yahoo’s move in that direction, after seeing the success of original and licensed series on digital networks like Hulu and Netflix. Savitt has since left Yahoo to work for independent studio STX.
Though the company has yet to officially announce the cancellation of the series, Community will likely not be back for season 7. The show’s actors only had contracts through season 6, and many of them — such as Allison Brie and Joel McHale — have become household names who would want more money from the network as the result of any new contract negotiation, while star Donald Glover has already moved on to bigger things.
Despite the multi-million dollar write off, Goldman says the company isn’t officially bowing out of longer-form streaming video quite yet.
“We’re not saying we’re not going to do these at all in the future,” he said, “what we are saying is, in three cases at least, it didn’t work the way we had hoped it would work.”
