Agencies Ho-Hum on Yahoo's Latest Premium Video Drive

Yahoo has struck up a premium content deal with Electus, the entertainment studio created by former NBC exec Ben Silverman. The arrangement will produce a series of new shows for distribution on Yahoo, which has said it will bring in advertisers at an early stage of production.

But agencies reacting to the news Friday were skeptical that Yahoo and Electus can produce hits. They note the last few years are littered with heavily hyped original content efforts that haven’t found the consumer and advertiser adoption their creators had hoped for.

“This category of development has a track record of more failures than successes,” said Chad Stoller, BBDO’s EVP/director of digital strategy for North America.

That’s not to say Yahoo will have trouble selling its new shows to brands — at first.

“There are always advertisers that see it as an opportunity,” Stoller said. “There’s always someone willing to be the first one in. I don’t have any doubts that this thing will launch and get off the ground. But I challenge you to name more than one decent online-only series.”

Sarah Baehr, Razorfish’s VP, media, also expressed fatigue at the parade of digital-only shows.

“Almost every single entertainment company has somebody in its midst whose job it is to come up with content that is supported by advertising,” she said. “Everyone who’s a talent wants to leverage digital content and have it be ad-supported.”

Indeed, the pool of digital studio entrepreneurs is deep and getting deeper. It includes celebrities like Ashton Kutcher (Katalyst Media) and Will Ferrell (Funny or Die) along with proven television execs like Silverman. Meanwhile, some early-wave ventures have shut down or gone on hiatus. Among them are Ripe Digital Entertainment, backed by Hearst Television and Time Warner, and 60Frames.

Part of the problem is that these studios and their distributors are competing with established television franchises for product placement and branded entertainment dollars. With limited client budgets, especially in the recession, agencies must choose carefully, and they tend to go with the proven.

“With any type of branded content whether it’s working online or on television, the time and resources required [are large],” she said. “Put the media dollars aside — is the payout going to be there?”

In such an environment, she said, an integration with “30 Rock” may be perceived as a better bet than an untried Web series.

“Often there isn’t a clear model in terms of what that the value is going to be,” said Baehr. “There’s a heavy reliance on the talent and the person behind it, and I don’t necessarily think that has equaled success.”

Electus, launched in partnership with Barry Diller’s IAC, is led by Silverman as CEO. Silverman hails from NBC Universal, where he directed the entertainment giant’s TV operations.

Separately Friday, Electus announced it will incubate an ad and content production company led by actors Jason Bateman and Will Arnett. Called DumbDumb, the project will create comic bits and ads in partnership with Web publisher CollegeHumor.com, which is also owned by IAC.