Yahoo! Inc. (NASDAQ: YHOO) is trying to get into the content and programming business. And in a really big way.
The Wall Street Journal reports that sources say Yahoo is ready to pull the trigger on an order for four web series. These are not short-form web-only type series, but are full-blown 10-episode, half-hour comedies with budgets of up to a few million dollars per episode.
Details are scarce, but CEO Marissa Mayer is said to be aiming toward having at least some deals done by the beginning of ‘NewFront,’ the web version of TV’s venerable ‘upfront’ where advertisers are pitched all the proposed cable and network shows for the fall season and sign up to buy ads. NewFront kicks off April 28 in New York.
Whether Mayer can close the deals that quickly is questionable, but she can still make a big noise if she decides that Yahoo can make enough money from advertising to support paying for the programming. If Yahoo owns the programs, then it can benefit from licensing in international markets and syndication.
Mayer has long said that she wants Yahoo to focus more on video, and she’s already hired TV news star Katie Couric and former New York Times tech columnist David Pogue to give the strategy some accomplishments to point to.
If Yahoo goes ahead, it will come into direct competition with Netflix Inc. (NASDAQ: NFLX) and Amazon.com Inc. (NASDAQ: AMZN). Yahoo’s planned assault on YouTube and Google Inc. (NASDAQ: GOOG) already has the potential to cost Yahoo some serious money. Adding content creation costs boosts the spending even higher, and Yahoo will be up against the deep pockets of the likes of Comcast Corp. (NASDAQ: CMCSA), owner of NBC; The Walt Disney Co. (NYSE: DIS), owner of ABC; and Time Warner Inc. (NYSE: TWX), owner of HBO, among other things.
Yahoo should have a significant war chest if the planned initial public offering of Alibaba goes off. The payoff for Yahoo could well be in the neighborhood of $36 billion.
Yahoo! shares have fallen 15% this year after rising 103% in 2013.