Yahoo is working its way into the television business, but the company doesn’t want to create good TV—just distribute it. It’s a sign that content promotion and distribution are more than good marketing strategy. They’re also good business strategy—and marketers who haven’t evolved to include them are missing out.
Original television programming is becoming more popular with services like Hulu, Amazon Prime and Netflix giving audiences a diverse range of stories to watch, discuss and share online. Yahoo is planning to acquire several television shows and use them to lure ad dollars from both traditional and digital networks. It’s the latest in a series of acquisitions CEO Marissa Mayer has pursued in order to generate revenue for the recovering brand.
A Wall Street Journal article about Yahoo’s pivot to TV says the company wants shows that are “ready to launch and don’t require a lot of development.” But why wouldn’t a company as large as Yahoo want to have direct control over content creation?
It turns out that the popularity high-quality entertainment relies on more than production values—it relies on audience share. The right show on the right network with the right kind of audience—the passionately devoted livetweeters of “Scandal” or the bingewatchers of “House of Cards”—can become unstoppable. Shows can survive now not by attracting a large number of viewers, but by attracting the right number of devoted viewers.
Brands are learning to follow their audiences where they lead, and for more brands that means following them to the Internet. What does this mean for the future of TV content distribution?
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Putting your money where the audience is
Yahoo’s choice to find great content rather than create it from whole cloth means that the rights to sell content are becoming more important than the rights to create it. This development could offer rewards to the people who both create TV shows and the companies that buy them.
Independent studios and other artists no longer have to attach themselves to a large network to get something made; instead, they can explore creatively, get picked up by a deep-pocketed company and increase production values. In Yahoo’s case, the company won’t necessarily have to invest in creating a show from scratch—instead, it can invest in expanding a show that already has a potential audience. And a potential audience can be more reliable than broad demographics for marketing and advertising campaigns.
Why cable companies should be scared silly
But there’s another reason why Yahoo wants to become an Internet TV network—people are spending more of their entertainment hours online, and giving advertisers the opportunity to engage with them. This could spell big trouble for broadcast networks and cable companies that want to keep a grip on their audiences, and there are already signs that their grips are slipping.
At least one cable company is planning for the future: Comcast’s proposed merger with Time Warner would create one the largest Internet providers in the country. It would also create a company with assets in both content creation (NBCUniversal) and distribution through cable. (Note that Google, parent company of YouTube, is approaching content distribution from the other side of the field with Fiber.)
Yahoo’s latest move is a signal to viewers that what they want to watch matters. But it’s also a signal to brands that an investment in content distribution is an investment in audience share. Not every show produced by an online network will find its mark; but if Yahoo can succeed in attracting and maintaining viewers for its new shows, it could open a new lifeline of advertising revenue. It would be proof that when it comes to TV, it’s not who makes the drama that matters—it’s who sells it.