Trouble at Cheddar
Plus, the growth of AI-generated news sites
Hi there,
Cheddar is in a tough spot.
Last week we learned that the company went through a new round of layoffs. According to reporting by Insider, staffers are feeling burnout and whiplash from editorial pivots, and many lack confidence in the network’s future.
Founded by ex-BuzzFeed President Jon Steinberg in 2016, Cheddar aimed to be a post-cable news network, distributing content across streaming channels and monetizing primarily through advertising (instead of carriage fees). The company grew revenue quickly – reaching $11 million in 2017 and $27 million in 2018, before getting acquired by the Internet and cable company Altice for $200 million in 2019.
Of late, the path has been rockier. The company went through a round of layoffs in 2020, and in early 2022 Steinberg exited the company. Revenue at Altice’s “News and Advertising” division, which includes Cheddar, fell 5.5% in 2022 and dropped 14% in Q1 2023.
Cheddar deserves credit for taking a run at an ambitious, original vision. But the vision hasn’t neatly aligned with how the streaming market has evolved. Power has accrued to the large streaming platforms (e.g. Netflix, Amazon, and Apple), and these platforms spend money on exclusive content that differentiates their services. Cheddar’s ad-centric model, however, requires distribution across many streaming services, rather than exclusivity. And at a time when direct audience relationships are increasingly important, Cheddar is reliant on third parties for distribution.
Alongside the layoffs this year, Cheddar has shifted more focus to social media, garnering skepticism from staff. As BuzzFeed’s experience has shown, it’s difficult to pivot a company with traditional cost structures to a creator-centric model.
Surely there’s still room for a “post-cable news network.” But Cheddar is still searching for the right model to get there.
And here’s the latest news in digital media:
NewsGuard has now identified 217 AI-generated news sites, many of which are monetized through programmatic advertising.
BuzzFeed now has 170 creators in its creators program, up from 100 this time last year.
Group Black may buy a majority stake in the Arena Group, which publishes Sports Illustrated and Men’s Journal.
Vox Media appointed new leaders as it aims to further diversify revenue.
Axel Springer’s WELT launched a news plugin for ChatGPT.
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