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Yahoo! stakes out new territory in Hollywood

By Staff writer of The Christian Science Monitor / February 22, 2005


When Yahoo! decided to lease the former headquarters of film giant Metro-Goldwyn-Mayer several weeks ago, there was an undeniable symbolism.

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Ever since the start of the Internet revolution, Web-based companies have dreamed of the day when they could harness the creative might of Hollywood on a fiber-optic wire, allowing customers to call up films and television shows with the click of a mouse.

The opening of the new Yahoo! Center in Santa Monica, Calif., this April suggests that, at last, this era may begin in earnest. For now, Yahoo's goals are modest - it has no intention of producing the next Steven Spielberg film for cyberspace or poaching David Kelley to write a Web version of "Boston Legal."

Yet some analysts say the day of Internet sitcoms might not be far away, and the trend could not only transform the entertainment industry but also turn firms like Yahoo! into the Disneys of the new century.

Already, the success of Web music ventures like iTunes and Napster hints at how the Internet is changing from an information platform to an entertainment medium. As technology improves, all of Hollywood will face the same pressure to meet the demands of a generation with Internet expectations. In this atmosphere, companies like Yahoo! have a natural advantage, and many analysts expect them to parlay that knowledge into multimedia empires that reach across the entertainment landscape.

"Yahoo has positioned itself to be a major player," says Paul Saffo of the Institute for the Future in Menlo Park, Calif. "It's an information company trying to turn itself into a media company, and it has a good shot."

The first outlines are already apparent. Yahoo's music service has included music videos for some time, and the firm recently announced a deal with Showtime to webcast the first episode of the new series, "Fat Actress." In addition, Yahoo! also offers exclusive outtakes from the NBC reality show, "The Apprentice."

It's a go-slow approach, but at this point, it's about all the Web can handle. Yahoo! realizes that most Americans aren't likely to settle down in front of a computer screen to watch "Gilmore Girls." Nor are the current DSL lines fast enough for high-quality video.

Gradually, though, the technology is coming. Some analysts think it is years away. Others, however, hear about new ultra-fast Internet lines and note college students who hook up their computers to work like televisions, and are more hopeful. "It's getting there, but it's just beginning," says Robert Atkinson, a technology analyst at the Progressive Policy Institute in Washington.

Yet even at this early stage, there are signs that Yahoo! is already thinking about original content, rather than relying exclusively on Hollywood. Yahoo! will distribute short films by JibJab, an Internet animation outfit. Admittedly, JibJab is hardly the "West Wing." The animation of its political satires is on a par with "South Park" - simple photo cutouts with marionette mouths.