Yahoo, like many other streaming services at this juncture, has been busy branching out into original programming. However, this week a conference call to investors indicated that Yahoo’s originals aren’t going so well. A few fans may have been happy with originals like Community, Other Space and Sin City Saints, but Yahoo is now saying the company wrote off $42 million for those original projects.
The news comes as Yahoo has reported its earnings in the third quarter in 2015 and they fell well below expectations. Obviously, when earnings are lower than expected, the company then has to go to the shareholders and explain why. As noted by The Wrap, Yahoo CFO Ken Goldman says that the new originals were not moneymakers for the streaming service, at all.
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.
This is pretty bad news for Community fans, who have been on a bit of a rollercoaster ride since NBC initially ended the show’s run back in the spring of 2014. Despite the niche fandom surrounding the series, NBC couldn’t make money off the show, but Yahoo Screen still opted to pick a new season of the comedy up, doubtless assuming that even if Community wasn’t a big breadwinner, it would at least earn the service some faithful subscribers. And while reports have indicated that Yahoo was still wanting to commit to another season of Community, the cast’s contracts were up and they couldn’t really afford to commit to any more episodes because they would be too costly.
Although talks have been bandied about regarding a potential movie, the fact that Yahoo has admitted the company wrote off $42 million goes a long way to explain why another season of Community was not really feasible, even if it kicked off to good reviews and was generally well-liked by fans. In fact, during the meeting, the CFO noted that Yahoo has decided to "move on," which may say something about the possibility of originals in the future.
Obviously, Yahoo isn’t being super specific about what did the worst. Maybe Community was responsible for a smaller percentage of the money loss than the Paul Feig-created Other Space. Regardless of which show was the biggest stinker, they all lost money and that’s just not good from a business perspective.