James R | On 06, Jan 2016

Yahoo is officially shutting down its VOD service, Yahoo Screen.

The streaming service, which was only launched two years ago, was intended to compete with video giants such as Netflix, YouTube and Vimeo. It followed Microsoft into the original content game, after the computing firm also launched its own in-house production team, Xbox Entertainment Studios. Microsoft, though, shut up shop in 2014, a move that highlighted how costly producing online video content is – a cost that not everyone can afford.

Now, Yahoo seems to have learned the same lesson.

The site launched with more than 1,000 hours of content, including eight short-form original series and a partnership with Viacom. It even reached an agreement with Live Nation to stream daily music concerts and, last summer, teamed up with America’s National Football League to deliver the world’s first global live-stream of an NFL game.

The biggest feather in Yahoo Screen’s cap, though, was the resurrection of NBC’s comedy, Community, in a deal with Sony Pictures Television. Reviving Dan Harmon’s show for fans who were disappointed following its cancellation, the site seemed destined to bring about the sitcom’s fabled “six seasons and a movie”. In October 2015, though, Yahoo revealed that it lost a staggering $42 million on Community and its other big-budget original shows, Sin City Saints and Other Space.

The service, which was free to users but relied upon adverts to generate income, secured a sponsorship from Honda for the launch of Community, but struggled to find a way to build a big enough audience or attract enough advertising clout to fund itself. Even YouTube, which has over a billion users, recently launched an ad-free subscription model to drive up revenue.

“We thought long and hard about it, and what we concluded is (for) certain of our original video (series), we couldn’t see a way to make money over time,” said CFO Ken Goldman when announcing the loss last year.

“We’re not saying we’re not going to do these at all in the future. But what we are saying is, in three cases at least, it didn’t work the way we had hoped it to work, and we’ve decided to move on.”

Now, Yahoo has officially given up the Yahoo! Screen ghost, instead incorporating its videos into the rest of the site – the Live Nation concerts, for example, will form part of Yahoo Music.

The closure arrives as Yahoo appears to be facing financial difficulties, with Chief Executive Marissa Mayer struggling to turn the ship around after a poor 2015.

“At Yahoo, we’re constantly reviewing and iterating on our products as we strive to create the best user experience,” a Yahoo spokesperson told Variety.

“With that in mind, video content from Yahoo as well as our partners has been transitioned from Yahoo Screen to our Digital Magazine properties so users can discover complementary content in one place.”

Other existing original videos will be available to US users in the TV section of Yahoo’s site.

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