Yahoo Blames Community & Other Original Programming For $42 Million Write-down

The third quarter earnings for Yahoo are in, and the company fell short of its own expectations. According to Yahoo’s projections, it should have brought in $1.26 billion in revenue during the third quarter. Instead, it only had $1.23 billion in revenue…and that discrepancy means that the shareholders are going to be angry.

Via The Wrap, Yahoo’s Chief Financial Officer Ken Goldman blamed a $42 million write off on the company’s ambitious original programs including Other Space, Sin City Saints, and the sixth season of Community.

“We thought long and hard about it,” said Goldman during a conference call with Yahoo investors. “What we concluded is certain of our original video content, we couldn’t see a way to make money over time. I’m thinking of Community, I’m thinking of Sin City Saints and so forth. So there, where we had spent money and had some assets on our balance sheet, we elected to write those off. That actually helps us going forward and we won’t have the expense to impact us going forward.”

Goldman added that “In thinking through that, we thought of not only what is the cost, but what is the cost to market and create the streams you need to make them successful. So we’re not saying we’re not going to do these at all in the future, but what we’re saying is in three cases, at least, it didn’t work we had hoped it would work, and we decided to move on.”

I do have to call out some BS here. Community could very well have cost Yahoo a lot of money, but $42 million for 13 episodes of Community seems like a very high number even when factoring in the other Yahoo original series. And if Community was such a money loser, then why did Yahoo repeatedly say that it wanted more episodes?

Either way, this seems to put the nail in the coffin of Yahoo’s ambitions to compete with Netflix, Amazon Prime, and Hulu in the original programming department. It’s likely that Yahoo will still put out original series, but the investors aren’t likely to be willing to take more costly write downs like this one without a few heads rolling at Yahoo HQ.

Community fans, share your thoughts on Yahoo’s multi-billion dollar write-off in the comment section below!

Photo Credit: Yahoo Screen / Sony Pictures Television


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