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Taylor Swift Marks a Do-or-Die Moment for Yahoo!

NEW YORK (TheStreet) -- Marissa Mayer has an opportunity to not only silence her critics, but make history at Yahoo! (YHOO) .

On the heels of Monday's Taylor Swift live stream, Mayer had better have a plan in place that capitalizes on the incredible buzz the event generated for Yahoo! and Yahoo! Screen.

While I have been writing about the value Taylor Swift can bring (and now has brought) to Yahoo!'s live video/music strategy for months, there's more to add. Because at this stage of the game, Mayer must roll out an all-encompassing and coherent plan that includes, builds on and extends from Swift. If not, there's a good chance Yahoo! will remain stuck in the mud, critics will rightfully ratchet up pressure on Mayer and, sooner or later, she'll be out of a job.

First, for context, see April 2014's Yahoo! Should Stream Taylor Swift's Next Tour and December 2013's Marissa Mayer's Biggest Game Changer Yet.

Second, let's break down a route Mayer could take with respect to live concert streaming. Of course, it doesn't have to go down exactly as I describe to be successful, however Mayer must focus on parlaying the Swift hype into something sustainable. This theme underlies everything that follows.

Continue With Live Nation, Start With Swift

The one concert per day for 365 days deal Yahoo! cut with Live Nation (LYV - Get Report) is fantastic. However, as I explained earlier this year, while it's a nice foray into a largely untapped space, it's not sticky enough:

... doing a different show from a different band every night isn't going generate the type of loyalty Yahoo! requires from its users. You're in one night because you love DMB, but you're probably not compelled to come back the next night to see an act you're not quite as rabid about.

That's why putting together an ad-supported and subscription-based package for, say, the forthcoming Taylor Swift tour makes sense on so many levels. It provides Yahoo! with a megastar who will bring her core of rabid fans back to Yahoo! Screen night after night after night. It's the next best thing to being there. And when they can't be there, they'll be glued to Yahoo! Screen.


At least for the demos with a loyal affinity for Swift, Yahoo! will be more than a mundane daily habit for checking the weather forecast or a sports score. It will be the go-to destination for something meaningful in these people's lives. That's the type of daily habit Mayer needs to turn Yahoo! into, not the one it currently is . . . one that forms no real bond with an audience it is hoping will just give it an errant ad click.

Plus there's what amounts to guaranteed money in hopping on the Swift bandwagon. While Swift and her camp sell everything from the standard tickets and merchandise to Coke and Keds while on tour, even they haven't exploited live concert streaming. But "exploit" is the wrong word because, from a fan's perspective, being able to pay a price for full access to the tour is a true value add. You're getting something you've never been able to get before (legally, in high quality and guaranteed) for what really is a nominal fee. 

If one million "Swifties" were to drop, say, $50 each for a pass that allows them to live stream and have archived access to every show on the forthcoming "1989" tour that's $50 million in revenue. Revenue that's icing on the cake for Swift. Her most recent tour in support of the Red album grossed $150 million.

Duplicate Swift Elsewhere

Streaming the Swift tour -- which will likely kick off this fall -- isn't enough for Yahoo!

Streaming Swift on a consistent basis (preferably every night) solves the Live Nation problem with respect to loyal, repeat visits, but it only does so for a specific, albeit large and important, audience. Yahoo! needs to decide who it wants as a loyal customer and partner with other musical acts out on or preparing to go out on tour.

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Rocco Pendola writes for TheStreet. He lives in Santa Monica. Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.


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