"Video Killed the Radio Star."
We all remember that song from The Buggles in 1979. Now, traditional journalism is the one facing slings and arrows as technology continues to reinvent the way we absorb content.
Painful as it may be, let's all agree that print isn’t for the future. Next in line for the chopping block is old-school broadcast newsrooms. By the end of 2017, 22 million people had cut the cord with cable TV and opted for an OTT platform, like Roku or Apple TV.
"I think about video packages in four categories: news, sports, escapist content and real deep stories," said Sam Landman, managing director of Comcast Ventures, who spoke at Media Kitchen’s 11th annual Venture Capital Conference in New York City on Thursday. "News is the odd one out. What is not fully understood or appreciated is how expensive it is to run a proper news-gathering organization."
He explained that a newsroom is not the kind of business that’s going to be profitable on an ad-supported basis, but it was possible in the past because you had media bundles like NBC selling the Golf Channel alongside MSNBC and CNBC.
"They cross-subsidize each other and can all be profitable," Landman continued. "The major question in my mind -- as economics shift -- is how do we fund journalism and news in this world?"
His money is on aggregators and distributors instead of the traditional content gathers. The Facebooks and Twitters over the Refinery29s and BoredPandas.
Content creators like the last two may have raised a lot of money at some point, but where do they go now? The distributors don’t have to vertically-integrate because the content is substitutable -- like those videos we all see of fast hands under a camera making guacamole in 20 seconds.
However, there is one news organization Comcast Ventures is backing: Cheddar. If you haven’t heard of it, you’re obviously not on social media because it’s been dominating feeds.
Today on Opening Bell with @KristenScholer & @timsteno:— Cheddar (@cheddar) April 13, 2018
President Trump slams Former FBI Director James Comey after details emerge from his book, Elon Musk refutes claims that Tesla is cash-strapped, and lots more. #CheddarLIVE https://t.co/xR17J0xOgX
"We saw a future where people would be fed up paying $160 a month for 300 channels and watching ads which are just annoying." said Melissa Rosenthal, executive vice president at Cheddar and previously a creative lead at BuzzFeed.
She said that the incumbents are now reaching 67 to 69-year-olds, with CNBC hanging onto 160,000 people watching at any given time. That number likely includes people watching passively in doctors’ offices or in cafeterias.
Aware of the power shift, these incumbents are cranking out their own skinny bundles and OTT systems like Sling and AT&T’s DirectTV, even though it puts them at risk of cannibalizing themselves. But while Rosenthal doesn’t believe the future is hundreds of skinny bundles, she said it’s important Cheddar is across as many of them as possible.
The news organization, which focuses on technology, business and finance with eight hours or broadcast every day and 60 to 80 guests, is geared towards a future where a huge slice of content is on demand. The other piece of the pie is short-lived content on social media feeds.
"You did not wake up one morning and say, ‘I want to watch 30-second shitty videos that are on my feed’ -- Facebook has done this for us," she said. "We believe there’s definitely room for live in that and we wanted to pave that way forward."
It’s the live video aspect that caught Comcast Ventures’ attention. Cheddar helps to bolster its broadcast voice by practicing what it preaches in terms of its demographic -- the anchors are young, diverse, and "the talent that would never have got a seat at the table at the incumbent networks, mostly because those folks are either making $40 million or have been removed for sexual harassment reasons."
And when it comes to ads, Cheddar is fully-integrating brands to be part of the conversation, with the aim that the audience takes something away from the partnership. It's simple, but incredibly effective.
"We feel like if you want to do ads, be [Ogilvy & Mather Founder] David Ogilvy -- reinvent things which have worked previously," Rosenthal added.
Barry Lowenthal, president of MDC Partners’ Media Kitchen, said the VC event "brings the people that are investing in new media and technology, entrepreneurs and clients with budgets together to think about the future. Clients always tell us it gets their wheels spinning and they leave with tons of ideas, so we keep doing it."
"It’s always been important to us to stay close to the VCs that are funding the future so we’re always grateful to bring out clients and staff together to hear it from them first hand," he added.