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TheStreet Open House

Why Yahoo! Was Live Streaming Taylor Swift

Stocks in this article: YHOONFLXAMZNCMCSADISTWTR

NEW YORK (TheStreet) -- Yahoo! (YHOO) tried to appeal to Swifties -- the teenage (and older) army of rabid Taylor Swift fans -- by hosting a live stream event on Monday of Switft introducing her latest single. Sunnyvale, Calif.-based Yahoo! is tiptoeing into original Web content creation and this is just the latest tier in its plan. If successful, this would give Yahoo!'s topline a boost after a series of hits and misses (Tumblr, a blogging platform Yahoo! paid $1.1 billion for, has yet to see significant revenue from advertising).

"The fastest-growing part of the Internet in terms of advertising volume is online video," Brad Adgate, research director at Horizon Media, told TheStreet. "As dollars continue to migrate to online video, you want to have a place at the table."

Digital video ad spending will total $12.27 billion by 2018, according to eMarketer estimates, with the industry growing at 41% this year alone. No wonder Yahoo! wants in.

Read More: Live Concerts Would Lift Yahoo!'s Video Strategy

The problem is this elevator, though still on the ground floor of its growth potential, has already reached maximum capacity. Netflix (NFLX) dominates the online streaming space with Hulu nipping at its heels. Amazon (AMZN) has elbowed its way in with its own original content (though its programming success is a blip compared to Netflix's).

To compete, Yahoo!'s strategy is to adopt broadcasters' game plan -- to focus on the spectacle of the live event, appealing to the cord-cutters' mentality but also eliciting the must-watch-now, can't-miss anticipation broadcast television once represented.

Traditional channels are attempting to recapture this spark, too. Comcast's (CMCSA) NBC is chasing the theater crowd with live productions such as Sound of Music over Christmas last year and a Peter Pan revival this December. Meanwhile, Disney's (DIS) ESPN has been strengthening its grip on live sports to cater to the fringe sports fanatics.

Read More: Google, Facebook Battle Over Exploding Online Video Ad Revenue

Yahoo! plans to claim its stake on music fans, demonstrated in its recent deal with concert organizer Live Nation (LYV) , a partnership promising to premiere a new, live concert from performers like Swift each day via Yahoo! Screen (Kiss has already performed while Justin Timberlake will later this month). Yahoo! Screen, launched in 2011, has long featured content from other providers -- Buzzfeed, The Onion, Comedy Central -- but is becoming more populated with exclusive content (Community, a cancelled NBC series, will air its sixth season this fall thanks to Yahoo!'s backing).

"In some ways if you're going to be late to the game, it's akin to in team sports signing a free agent all-star in order to get up to speed quickly," David Hallerman, analyst at eMarketer, told TheStreet on Yahoo's content strategy.

Yahoo! has yet to respond to requests for metrics, though, as The New York Times points out, Taylor Swift quickly became a trending topic on Twitter  (TWTR) and has remained there through to midmorning Tuesday.

-- Written by Keris Alison Lahiff in New York.

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