Jon Steinberg, the founder and CEO of Cheddar, a news-streaming service, is a media-industry veteran. He previously served as president and COO at BuzzFeed, and later as CEO at the Daily Mail in the U.S., where he grew the site's revenue by 45 percent over a period of 18 months.
On Friday, Cheddar opened its second major studio, in New York City's Flatiron Building, from which it will broadcast its "Cheddar Life" series, featuring content in health, wellness, and fashion, as well as business and technology news. The company also has a setup on the first floor of the New York Stock Exchange. The new project, Steinberg says, cost roughly $350,000 to build out.
Cheddar, which launched in January and began broadcasting in April of this year, now counts around 100,000 daily viewers. "I wanted to create a cable network focused on this intersection of business, tech, media and culture," said Steinberg. The solution, he quickly realized, did not lie in cable networks, where content is "geared toward 50- and 60-year-olds."
Instead, he turned his attention to over-the-top streaming services, such as Netflix and Hulu. These platforms, he figured, would soon balk at the prices charged by cable networks to license their content, thus paving the way for Cheddar -- with its hipper aesthetic and cheaper fees -- to strike a deal with the services, and gain exposure to millions of viewers.
Steinberg has already scored key partnerships, including with Amazon's video streaming service, Prime Video, and with Vimeo, a platform that counts more than 280 million users. Cheddar charges a $6.99 monthly subscription fee, though users can access the coverage for free through Facebook Live, a real-time broadcasting tool on the social media platform.
Uniquely, the company aims to be the "CNBC for Millennials." It hopes to attract younger audiences by offering more informal coverage in business and technology, steering clear of "macro" economic trends, and owning up to awkward moments on camera. (For instance, during an early Cheddar broadcast, Steinberg admitted to viewers that the stock charts they used to demonstrate market drops looked like "play school kindergarten charts.")
"Everyday in live television, something goes wrong. When you watch cable news, you'll see the broadcasters waving for the graphic, or you'll see the wrong B-roll," says Steinberg. "We just roll into it. We discuss how annoyed we are, because people want intimacy. They want humanity and realism."
Where content is concerned, Steinberg adds that most of the startup's six or seven daily interview subjects are below the age of 40, which should help to create a sense of camaraderie with Millennial viewers.
To his point, most cable news networks have weathered a steady decline in ratings over the past few years, as streaming grows increasingly popular. Between 2011 and 2016, about 40 percent of Millennial-targeted television viewing time migrated to streaming video and other activities, according to Nielsen's most recent "Total Audience Report."
Still, channels like Fox News, CNN, and MSNBC saw profits surge last year, ahead of the U.S. presidential election. Fox News finished July with 2.8 million primetime viewers, while MSNBC and CNN each saw 1.3 million and 1.7 million primetime viewers, respectively. Meanwhile, the percentage of so-called "binge" viewers disconnecting from their paid TV providers hovers at just 8 percent, according to recent data from Forrester Research.
Cheddar, which has raised $3 million in venture capital funding, primarily from Lightspeed Venture Partners, may well be positioned to give the incumbent networks a run for their money. The startup generates revenue through advertising, branded content, and licensing fees from streaming partners. It claims it will see $1.5 million in sales this year, projecting $5 million in 2017.
Steinberg acknowledges that streaming platforms do face challenges in continuing to win over customers, but he's optimistic, and likens the state of the industry to the early days of the Web.
"I think it [the industry] will look like the early days of internet services or phone services," he says. "You had certain stuff on different networks, and over time they joined up in a way. That's what we're going through now. Some people will be on Hulu, some people on Netflix. They'll hodgepodge together the bundles they want, and in the process cut video programming."