3 Years Later, Cheddar is On Every Over-The-Top Pay TV Service in the United States
In January 2016, I incorporated Cheddar. Peter Gorenstein (our Chief Content Officer) and I sat in the lobby of The Westin in Times Square (our “office”) and dreamt of creating Cheddar and getting it on Sling.
Sling was the first to bet on us. We love them and our partnership.
In the intervening 3 years, the following services have launched, and Cheddar has subsequently been privileged to receive carriage on:
- YouTube TV
- Hulu with Live TV
- DIRECTV NOW
- fuboTV
- Philo
- Sony PlayStation Vue
With our launch today of both of our networks (Cheddar Business and Cheddar News) on Sony PlayStation Vue, we have accomplished something that wasn’t even a thing in 2016, and we certainly never dreamt possible:
Cheddar is available on every Over-The-Top (OTT) television service sold in the United States.
Furthermore, Cheddar Business is the ONLY network available across all of the main vMVPDs listed above. No other cable network group can claim this. We took the bet that new, modern distribution would come, and that we could get carried on it. And that we could do this more quickly than incumbents could crack more youthful skewing live news content (existing cable news audiences have average ages over 60).
If you want to buy a live news, locals, and sports package as a companion to Netflix, you get Cheddar.
Over the past three years we have steadily leveled up the quality of our content, guests, and reporting. We’ve expanded from business news to headline news with our Cheddar News network and most recently esports and gaming news with our daily Cheddar Sports hour at 5pm EST. We also pioneered a new advertising product focused on integration and sponsorship that is ideal and unique to the live news model. All our advertising relationships are client direct. I’d hazard to guess that we work with half of the top 20 financial services companies in the U.S.
With this universal OTT carriage, the first week of February, we will launch our first slate of primetime programming on Cheddar Business centered on reality business programming and game shows. The coming year will be about programming excellence and continued ad innovation and more live hours. (We are currently airing 17 hours a day of live news across the two networks.)
2018 revenue looks to be around $27 million up from $11 million in 2017. Our booked revenue for 2019 already stands at $26 million as well, ensuring enormous top line growth in 2019 with the year just beginning and many top tier brands just hearing about Cheddar and our advertising offering for the first time.
Our business also has already shown real operating leverage. The rapid revenue growth of 2018 was accompanied by roughly the same modest absolute dollar EBITDA loss of $4 million we saw in 2017. We will go profitable in Q4 2019 and stay that way.
Our capex to build all our studios and technology to deliver to 40 plus platforms has been hyper efficient and built for this new world from the ground up, measured in single digit millions since inception. As mentioned, our operating losses since inception have been modest, and even including our acquisitions, the vast majority of the capital we have raised sits in cash and AR.
The financial profile of the “post cable network” has all the margin and eventual cash flow benefits of the prior “cable network” without the enormous launch costs of yesteryear. With that said, this has been 3 years of laser-like focus on content, technology for live OTT broadcast and delivery, advertising product development, and distribution work that would have left any other team of 180 people no longer standing. It would be hard to catch up to us, but we will keep running nonetheless.
One more note, headcount will grow only modestly in 2019 to accomplish still massive growth on all fronts. We love operating leverage; growth will drop to the bottom line.
In 2019, we want to get on more cable and satellite boxes too. We’re already on Comcast X1, DirecTV, AT&T Uverse, and WOW. We want to be the best partner in the world to our current and future telecom/MVPD/vMVPD partners and their viewers and support them as they offer seamless experiences across their own hardware and OTT offerings.
We also love the out-of-home viewing space for live news, especially in reaching people 18 to 24, and took the first step in reaching that audience with our creation of CheddarU — a network of 1,600 screens in dining rooms, gyms, and student unions on 600 college campuses.
Finally, we view the “freeview” systems, namely The Roku Channel, Pluto TV, Samsung TV Plus, STIRR, and those forthcoming, as an important vehicle to allow the sampling of a limited quantity of our live content. We are pleased to be on these systems, and anticipate being on all future ones as well. (FYI: I wrote this before the Viacom/Pluto news. We have many friends at Viacom and Pluto and are thrilled to be their partner!)
We think the MVPD, vMVPD, and “freeview” platforms all stand to grow enormously with traditional incumbent and new entrant live news programming, and we plan to grow our share of viewership on these systems substantially over the coming years. We are a three year old toddler in a world of adults; our walk becomes steadier every day, and we plan to start running. We now have the same OTT real estate as the old guard cable networks, and it is on us to take share on these systems as they grow while serving our distributors, viewers, employees, and partners.
