The Seattle Times writes about Yahoo’s plans:
Yahoo! is quietly but aggressively lobbying Hollywood to create programs to be shown exclusively on its network of Web sites.
People familiar with the discussions say Yahoo! is pressing entertainment-industry producers and talent agents to start pitching new shows and short films that the Internet giant could license for viewing online. No longer satisfied to simply repackage film trailers and TV clips, some Yahoo! executives believe the surge in broadband connections means the Internet may finally be ready to operate more like a television network, these people said.
The business model is unclear, but Yahoo! is considering advertising and subscription fees to cover the cost of the programs, according to a person familiar with the situation.
Yahoo! thinks consumers will embrace its efforts this time. More than half of Web surfers in the U.S. have high-speed Internet connections at home, and people who use broadband spend much more time online than people who have dial-up connections.
Besides, Yahoo! needs to create more places to put ads. By luring customers with sports scores, news stories and other information, the company raked in $1.2 billion from online advertisers in 2003. Now the portal is running out of space for more ads and sponsorship notices.
Video ads that resemble TV commercials command even higher prices, and that could more than cover Yahoo!’s costs.
