The company, founded in 2016, operates two networks — the newly rebranded Cheddar Business, positioned as a CNBC-style financial and business network for millennials, and Cheddar News, which it previously called Cheddar Big News. Cheddar’s linear programming is carried on Dish’s Sling TV, AT&T’s DirecTV Now, Hulu With Live TV, YouTube TV, FuboTV and Philo, and went live on PlayStation Vue on Wednesday (Jan. 23).
“We made it our goal to be on every one of these services – which is the future of television,” said Jon Steinberg, founder and CEO of Cheddar. That said, going the OTT route is an easier path: Steinberg acknowledged that “it’s virtually impossible to get traditional channels launched” on traditional pay-TV platforms.
Cheddar’s linear streams also are available on Comcast’s X1 set-top boxes and on DirecTV’s internet-connected set-tops. It also sends out a live feed via Twitter and sells direct-to-consumer subscriptions (for $2.99 per month or $29.99 per year). All told, Cheddar reaches roughly 30 million homes through its deals, according to Steinberg.
As part of Cheddar’s push to bring in more revenue with the expanded distribution footprint, the company will launch a block of primetime programming next month, Steinberg said. The weeknight lineup will include “reality-business programming” and a game show, he said. That will extend Cheddar Business’s original content wheel past its current live coverage from 9 a.m.-6 p.m. ET (after which the channel replays highlights from the day).
Steinberg declined to provide details of its agreement with Sony for PS Vue or other distributors, but he said unlike other cable TV network startups, “We’ve never written a check for carriage.”
The main revenue stream for Cheddar, which calls itself a purveyor of “post-cable networks,” is from advertising and branded content. Last year, the company generated $27 million in revenue (up from $11 million from 2017) and Steinberg is shooting to nearly double sales in 2019.
“We are in these premium TV environments, next to CNN, CNBC and Fox News Channel,” he said. “It’s completely work-safe, high-value inventory delivered to young, affluent audiences.” Cheddar’s sponsors and advertisers have included Chase, Goldman Sachs, TradeStation and Fidelity, and Steinberg sees an opportunity to expand beyond the endemic financial-services category.
To date, Cheddar has raised $54 million in funding from investors including Amazon, AT&T, Comcast Ventures, Raine Ventures, Liberty Global, Goldman Sachs, Altice USA, the New York Stock Exchange, Lorne Michaels’ Broadway Video, and Lightspeed Venture Partners.
Steinberg is projecting the company to be profitable in the fourth quarter of 2019 “and stay profitable,” he said. “I’m obsessed with keeping the company frugal. You should see our offices.” The company has spent $10 million on acquisitions, including buying RateMyProfessors.com from Viacom last year, and currently has $30 million in the bank between cash and accounts receivable, according to Steinberg.
Cheddar now has 180 employees, most of whom are based in New York. Cheddar Business broadcasts primarily from the trading floor of the New York Stock Exchange, covering business and tech news. Cheddar News covers general and headline news. On PlayStation Vue, Cheddar Business is available in the Access package, available to all subscribers. Cheddar News is available to all subscribers with the Elite and Ultra packages.
Interest has surged among traditional media companies in next-generation streaming video plays: witness Viacom’s $340 million cash deal for Pluto TV, a free, ad-supported streaming service.
Asked what Cheddar’s exit strategy is, Steinberg said, “I don’t think our exit is going to be someone writing a giant check for us.” He added, “I have no interest in merging with other digital companies.” On the other hand, it would make sense for Cheddar to be part of a local TV station group, or to combine with the news operations of a larger media company if those were to be spun out, Steinberg said.