Former BuzzFeed operations chief Jon Steinberg is convinced that the TV business as it exists now is finished.
While TV execs await the mainstream arrival of the “skinny bundle” and inspect the entrails of subscriber losses for hints about the future of the business, Steinberg is going all in on over-the-top distribution, the delivery of content to viewers over the internet without the need for a cable box.
Steinberg’s new venture is Cheddar, a business news network aiming to sell its shows directly to online platforms like Netflix, DirecTV Now and Hulu, which have traditionally licensed the bulk of their content from library holders like Disney and Time Warner. Cheddar launches its new studio on the ground floor of the Flatiron Building in Manhattan on Friday.
“My bet is that all of these platforms are going to turn to the Time Warners and say, ‘The cable news channels are charging us too much,'” Steinberg tells The Hollywood Reporter. “What they need is unrestricted content.”
Riding this wave, Cheddar announced a partnership with Amazon in July and has been broadcasting regularly on Facebook Live, the social media site’s new live video platform. Cheddar Live, Cheddar’s flagship program, usually gets around 80,000 views per broadcast.
But the wave could crash on top of Cheddar as easily as it could propel the business to a successful start. Steinberg estimates that there are only currently about 15 platforms, like Netflix or Hulu, that he’s targeting to sell Cheddar content to. He’d like to see that market widen.
Likewise, Facebook has been slow to monetize Facebook Live, which is holding another potential revenue stream in abeyance. Facebook has said that it’s now “testing monetization with select media partners.”
“I never rely on these platforms,” says Steinberg. “You’ve always got to have your own revenue streams in place.”
For Cheddar, as for many successful startups within new media like BuzzFeed and Vice, that means native advertising and branded content. Fidelity investments signed on as Cheddar’s first financial sponsor, and several minutes of the Aug. 2 Cheddar Live broadcast were devoted to showcasing its stock ticker app, much in the style of a live-read radio ad.
Cheddar has generated ad revenue so far of $1.5 million, according to Steinberg, but that’s just icing on the cake. The licensing fees that will constitute the bulk of Cheddar’s topline are still in the oven.
The Gramercy-based company is aiming to appeal to millennials with its content as well as its distribution method, focusing its coverage on more fashionable topics like tech, media, startups and entrepreneurship.
“No oil and power, no Fed, not too much macro,” says Steinberg. “We really want to focus on tech and consumer products.”
There’s no denying that Cheddar’s intended audience is growing: Between 2011 and 2016, 40 percent of millennials‘ TV viewing time migrated to streaming video and other activities, according to the most recent Nielsen Total Audience Report. A survey last year by consulting firm Deloitte found that 39 percent of millennials‘ total viewing time is now devoted to streaming.
“I don’t think the format is broken,” stresses Steinberg. “People still want informative, dynamic, ambient content. That content just needs to adapt.”
