Five years ago, a handful of companies with names like Pop, Pseudo and Icebox promised a future when original shows produced for the Internet would replace traditional TV viewing.
The dot-com bust deflated those grand ambitions.
But the vision of creating unique, interactive multimedia programming for a generation weaned on video games is very much alive at Yahoo Inc.
The giant Internet portal isn’t talking about its plans for content. But analysts suggest a profound shift may be at work, with Yahoo using its enormous reach to force Hollywood studios, among other video creators, to produce programming with the Internet in mind.
Yahoo can offer up a worldwide audience of more than 300 million — a number that some analysts say could reach 1 billion by the end of the decade.
“Those are numbers that are sufficient to make the likes of Rupert Murdoch salivate and turn green with envy,” said David Garrity, an Internet and media analyst with Caris & Co., referring to the owner of a media empire that includes Fox television and movie studios.
Yahoo has already forged partnerships to webcast content from other media. It showed the entire debut episode of the Showtime series “Fat Actress,” starring Kirstie Alley, at the same time the episode was broadcast on cable.
It also features exclusive behind-the-scenes footage from the Mark Burnett-produced NBC shows “The Apprentice” and “The Contender,” and offers material from JibJab, the two guys who created the animated short cartoon that lampooned presidential candidates George W. Bush and John Kerry.
America Online has similarly broadcast the first episode of the WB Television series “Jack & Bobby” and features exclusive musical performances in its “Sessions AOL” series.
Yahoo chairman and chief executive Terry Semel said recently that 75 percent of users access the portal using high-speed connections, making it possible to stream video of all sorts, including content by individual users.
“Our great attributes are interactive,” said Semel, the former co-CEO of Warner Bros. “We have huge audiences who themselves are the programmer.”
Among other moves, Yahoo recently signed a deal to buy Canadian photo-sharing startup Flickr Inc., which lets people upload digital photos, publish photos in their blogs and share digital photo albums. Another recently launched Yahoo site lets users search for writings, lyrics, photos and other content authored by people who want others to use their ideas as the basis for new creations — the so-called “Creative Commons.” Then there’s the newly announced social networking service, Yahoo 360.
It all speaks to Yahoo executives’ excitement about “micropublishing” — letting the portal’s users create content attractive to fellow users that will encourage people to hang around in Yahoo’s virtual world.
It’s a vision shared by others who see a future where people aren’t just passive viewers of content but participate in creating the “TV shows” of tomorrow.
One company built on the concept is Brightcove, a startup that envisions a day when “Internet Television” offers thousands of channels of content, some produced by traditional TV companies and much produced by individuals as the cost of digital cameras and editing tools drops.
Yahoo fueled speculation that it might try to produce its own original content when it hired former ABC primetime program chief Lloyd Braun in November to run its media group and moved all its content units under one new roof into the former MGM headquarters in Santa Monica.
Yahoo executives insist they don’t suffer from Hollywood envy or the desire to take the multimillion-dollar gambles regularly taken by studios.
“When I wanted to move our media companies all into one place, and hire ... creative executives, the intent was not for them to either make movies or start making big television productions,” Semel told an investors conference. “It would be ridiculous and it’s not what Yahoo is going to do."
Lauren Rich Fine, an analyst at Merrill Lynch, says Yahoo is attractive to investors for its diversified revenue stream from paid search, advertising and social networking ventures. It simply doesn’t aspire to the business model of the traditional Hollywood studio, where only six out of 10 movies make back their investment.
Yahoo says it is in the earliest stages of developing its entertainment strategy and therefore declined to make an executive available to discuss it with The Associated Press. But the company has made it clear that one of Braun’s mandates is to find new ways for Yahoo’s music, games, news, sports, kids and other divisions to draw more visitors.
Moving content off the computer onto cell phones, portable media players and other devices is likely a key goal, many in the industry believe.
“The video experience online and on wireless devices is getting much better,” said Bernard Gershon, senior vice president, ABC News Digital Media Group. “People’s willingness to pay to access some of that content is definitely improving, and content creators, like us, are actually looking at this medium as a way to produce new and different content.”
But it remains too early to tell exactly what direction companies like Yahoo and rivals AOL, Microsoft's MSN and Real Networks will take. (MSNBC is a joint venture of NBC and Microsoft.)
Ultimately, whether Yahoo morphs into an online TV network or produces its own content, its strategy boils down to keeping visitors within Yahoo’s virtual walls as much as possible.
Said Martin Pyykkonen, an analyst with Janco Partners Inc.: “The more content and interesting things they put there, the longer they keep you there, the more opportunities they have to monetize you through advertising.”
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