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Yahoo takes a $42 million write-down on Community and other shows

"We couldn’t see a way to make money over time."

Yahoo's recent foray into original video content has failed. The company announced at an earnings call that it will be taking a $42 million write-down in the third quarter for its video division. "We thought long and hard about it," said Yahoo chief financial officer Ken Goldman, according to a report from The Wrap. "What we concluded is [that] 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."

community dedicated a whole episode to a honda SUV

These original series were unveiled back in April, with Community the most high-profile acquisition. The cult comedy had been a critical success in its early seasons, and Yahoo's decision to renew it for a sixth was reminiscent of Netflix rescuing Arrested Development. However, while Netflix makes it money from subscriptions, Yahoo has to do the same from advertising. For Community, this included a deal making Honda a "presenting sponsor" for the show, with the company given pre-roll video ads and even an entire episode — "Advanced Safety Features" — structured around its new CR-V SUV.

Although Yahoo said the campaign was a success for Honda (a biometric study reportedly showed that millennials were more "emotionally engaged" with the branded content than the rest of the episode), it wasn't enough to boost the tech firm's own revenues. (Community's Joel McHale already announced earlier this year that the show would not be getting a seventh season.) Goldman reportedly said that although Yahoo's original content — including Community — "didn’t work the way we hoped it would work," the company hasn't ruling out the possibility of trying again in the future.