Little Big Cheese
A former BuzzFeed exec and his start-up, Cheddar, look to take a bite out of suddenly vulnerable cable news giants.
For all the socio-political influence Fox News and CNN wield these days, the cable news titans aren’t exactly sitting on enduring pillars of strength.
TV’s dual-stream subscription and ad revenue models are being disrupted from all sides, and the channels’ audiences grow grayer by the day.
Cheddar, a two-year-old start-up, is hoping to crash the cable news party. Backed with $54 million in venture capital and founded by Jon Steinberg — a brash New Yorker who was previously president and COO of BuzzFeed — Cheddar is proliferating across traditional and next-generation pay-TV programming guides. It caters to a far younger demographic than cable news typically attracts.
The firm is signing big distribution deals, not only for its flagship Cheddar financial news channel, which is headquartered at the New York Stock Exchange, but also for the recently launched general-interest outlet, Cheddar Big News.
Venture backing has given Cheddar a key advantage. According to Steinberg, Cheddar gets 95 percent of its revenue from advertising and does not charge carriage fees to pay-TV operators. Compare that to the more than $1.50 per month per subscriber that Fox News charges.
That has made it easy for Cheddar to sign distribution deals with new virtual pay-TV operators, including Sling TV, YouTube TV and Philo. With their channel bundles and profit margins both on the skinny side, these virtual services are particularly budget-conscious when it comes to licensing networks. Free helps. A lot.
But Cheddar’s can’t-lose proposition for virtual pay-TV operators also appeals to traditional platforms. Not only does number-one cable operator Comcast carry Cheddar, so does the National Cable Television Cooperative (NCTC), which represents more than 800 small cable operators in the U.S.
“Cheddar is directly addressing several key needs our members have, including a unique approach to news,” says Rich Fickle, NCTC president and CEO. Its lack of carriage fee and easy-to-use mobile app make it a good value for small cable operators, he adds.
With some 130 staffers, Cheddar’s core financial news asset is heavily focused on Silicon Valley, and its on-air talent appears decidedly collegiate. Steinberg says the company aims for a non-partisan look — more USA Today than Fox News or MSNBC.
But he himself has very definite opinions, especially about his competition.
Describing more traditional networks at a recent pay-TV industry event, Steinberg didn’t mince words: they’re “geriatric,” he said.
This article originally appeared in emmy magazine, Issue No. 11, 2018