Speaker 1:
From the Library of the New York Stock Exchange, at the corner of Wall and Broad Streets in New York City, you're Inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership and vision in global business. The dream drivers that have made the NYSE an indispensable institution for global growth for more than 225 years. Each week, we feature stories of those who hatch plans, create jobs and harness the engine of capitalism right here, right now at the NYSE and at ICE's 12 exchanges and seven clearing houses around the world. Now here's your host, Josh King, head of communications at Intercontinental Exchange.
Josh King:
Hi everyone. How do you get your business news? Is it the paper edition of The Wall Street Journal delivered to your driveway? Are you glued to CNBC or Fox Business news? Do have a Twitter feed with all the leading financial journalists scrolling through your phone? In many cases, it depends upon your demographic. Today we sit down with the founder and CEO of Cheddar Inc., which is what Jon Steinberg calls his live post cable network focused on covering the innovative products, technologies and services transforming the world around us. Last year, Cheddar announced a third round of financing from many well known names AT&T, Altice USA, Lorne Michaels's, Broadway Video. I should note for full disclosure at the New York Stock Exchange, a subsidiary of ICE.
Josh King:
When you visit the floor of the NYSE on any day, you can see the broadcast studio at post 10 where Cheddar has been turning out content since its launch in April, 2016. Back in those early days, the show was supposed to be an hour long, but today's guest who anchored that first broadcast says they ran out of content after 40 minutes. But since then, coverage has grown to include a full day of live reporting to millions of paying customers on a variety of social and OTT media services. Our conversation with Cheddar's founder and CEO, Jon Steinberg, right after this.
Speaker 1:
Inside the ICE House is presented this week by the Secure Financial Transaction Infrastructure or the SFTI network. SFTI is the backbone of the ICE platform providing high security, high speed direct market access and trade execution capabilities to over 150 global markets. SFTI connects data and analytics from more than 600 proprietary and third party market sources. More on SFTI later in the show.
Josh King:
Jon Steinberg founded Cheddar in early 2016 and was up and distributing programming in just four months. Let's say he had some experience in the field. Before launching his new venture, he was the president and COO of BuzzFeed, the online upstart, where he was that company's 15th employee and helped to grow it into a billion dollar internet giant. He's no stranger to helping disrupt an industry and building a media juggernaut. Jon, welcome to the ICE House.
Jon Steinberg:
Thank you for having me here.
Josh King:
You like the new Peloton treadmill?
Jon Steinberg:
I love it. I think it's amazing. John Foley's an incredible entrepreneur. The Peloton Bike has been a huge success with the screen and the interactive classes and the-
Josh King:
Who's your favorite trainer on the bike?
Jon Steinberg:
I like Jess King. I was talking to Foley about it and he was saying some of the trainers, some of the instructors are more about spirituality, some are more about intense fitness. I think she's sort of a mix. Then I do the trending classes. It's a great company. Look, it's a billion dollar company now. The last round Goldman Sachs invested in. It's one of the so-called unicorns. Incredible.
Josh King:
Did you do any of the special Pyeongchang workouts?
Jon Steinberg:
No. I have not seen those yet. I really only do Peloton probably two days a week, and then most of the time I just do lifting. I'm not as addicted to it as some people are.
Josh King:
Do you think your news anchors could deliver the news and do a 45 minute sweat burner at the same time?
Jon Steinberg:
Well, when I did this interview with John Foley, the CEO, we talked about possibly doing the interview while on the Peloton Bikes, but that idea got spiked. I don't know why that idea didn't happen.
Josh King:
We should have just a little carve out window of at least the Cheddar News feed so people can read while they do their workout.
Jon Steinberg:
I talked to him about doing that actually. We've had conversations about trying to get Cheddar on the bikes. I'm looking at all these places now. There's a network that controls all of the TVs in 80 airports, 2,000 screens. It's like a closed circuit TV network almost. By the time this podcast comes out, we should be live on that. I'm excited about that. I like those kind of unique locations to put the programming.
Josh King:
Why do you have Albert Einstein on the top of your Twitter feed?
Jon Steinberg:
It's a great question. I saw that painting. I was with the kids and we did like a food tasting tour, believe it or not, in Florida. There was that beautiful street scape of a rainbow color field and then Einstein in the background there. Look, I guess I admire people that come up with ideas that are largely doubted at the time and then people who persevere. I mean, that really is the entrepreneurial journey. Everybody kind of thinking that it's impossible, and then you, even at times thinking that it's impossible. Then one foot in front of the other making it happen. That's why, I mean people like John Foley who said, "I'm going to do spin classes in people's homes and I'm going to ship a bunch of ..."
Josh King:
It's an amazing piece.
Jon Steinberg:
... "bike to everybody's houses and connect them all with the internet and live broadcast instructors." Elon Musk, "I'm going to land rockets on their tails." The incredible is incredible to me. I mean, that's a lot of Cheddar too. That's why that we cover that stuff on Cheddar because that's the stuff that I like. I found it inspiring and our bet was that a broad group of people in their 20s and 30s wanted talking speakers and self-driving cars all day long.
Josh King:
We're going to get to some of that. I think if you remember what I said in the intro, you started back in April 2016. I don't think that your set was quite what it was back then on the New York Stock Exchange compared to what it is now. What's your memories of those first few days in the air?
Jon Steinberg:
I have great memories of it. I mean, I remember the first day that we did it like yesterday. I mean, Ian, who's sitting right over here with us was there with me. We were building this thing and getting it all set up and it's all like, I have a lot of positive nostalgia for it. I mean, Peter and I were down there. We only had two other employees at the company at the time and-
Josh King:
This is Peter Goldenstein?
Jon Steinberg:
Peter Gorenstein, yeah. He was our chief content officer. Then the idea was, well, let's do it one foot in front of the other. Is what I always said. Let's see if we can do an hour. Let's see if we can find enough guests, and then let's never go backwards. We made the commitment to ourselves and to all of our partners that if we did an hour that first day, I think it was April 11th, 20-
Josh King:
'16.
Jon Steinberg:
... 16, April 12th, we wouldn't do less than an hour. Then we got to three hours and four hours, and then we hired people. The key to these whole things is one foot in front of the other.
Josh King:
You mentioned Elon Musk earlier. He brought his Falcon Heavy rocket to Launch Pad 39A at Cape Canaveral to send it into space the very same spot that 40 years earlier, the Apollo/Saturn rockets went into space. For your forward looking cutting edge media business, you've come to a place that is over 225 years old. Why did you pick the floor of the New York Stock Exchange?
Jon Steinberg:
It was so important to me and if we weren't to have been welcomed here, I don't know if we could have made the company. I really think that Tom Farley and the rest of the team here, seeing the vision and saying, "We're going to do this." It was such an integral part of it because to me it's a visual medium. I always say that Cheddar is a window on the world medium. If we're going to do business news coverage, it has to be at the heart of what is visually identified as business. We love the market because the market makes live work. In the absence of open to close, business is a bit disconnected. If we couldn't have the floor of the exchange, it wasn't clear to me that we could do a live business network.
Jon Steinberg:
When you look at visually it's stunning, the people that come through are stunning in terms of the executives, and then you can visually see and feel the market on up days, down days, IPOs, even the cycle of the year as you go into holiday periods where you know that there's going to be ... You come back from Christmas holiday and New Years and you come to the floor in January and everybody sort of kind of holds their breath to see what will the first week of January look like. You can't do it without the trading floor.
Josh King:
I don't know if you were at BuzzFeed or the MailOnline when you were writing the business plan for Cheddar, but what was that spark of the moment where you, whether you were writing it yourself or to your partners, say, it's got to be the floor of the exchange?
Jon Steinberg:
I came to the floor for the first time, it would've been, I guess, 2011, maybe when I did Squawk on the Street, which became Squawk Alley, and I had never seen anything like it. The last time I had been to the exchange had been probably in middle school where, when we used to do the tours in the gallery. I had these kind of very visual memories of it. When I looked around and I saw the different media outlets on the floor and the vision for what Cheddar was going to be kind of came to me, I would say it was always in my head. I have sketches of kind of where it would look like on the floor. I never had really a vision of it that didn't involve the exchange.
Josh King:
What are the metrics you're using now to tell folks about how broad your viewership is these days?
Jon Steinberg:
We have all the view data, so we're able to say that we do two to 300 million views a month at this point across all of the clips that are on Facebook and YouTube and Twitter and Instagram. Then we use an audience measurement firm called Cogent that calls up 4,000 people every six weeks to ask them, are they watching us live? Are they aware of us? And so on and so forth. That nets out to about 6 million people that watch the content across one of the platforms live in some form. Then now I've begun to work with Nielsen to try to push them to come up with methodology for measuring us across all these different OTT platforms. We kind of try to use every possible metric that we can to kind of explain the scale to largely advertisers.
Josh King:
For all those views, what's been the ramp of headcount that you've needed to have to pull this off?
Jon Steinberg:
We're at 120 people now, which is pretty good. That's eight hours live for Cheddar and then Cheddar Big News is kind of the headline news network. I call it sort of an apolitical CNN, is sort of the vision for that, or a headline news, or a USA Today type thing. That headcount to do that is sort of baked into that. We're going to launch that network with 10 people, 10 additional heads. Obviously there's a lot of heads from the core operation that kind of parlay over to that. But what I always tell our team is, if we can do this with 100 or 200 people, it's extraordinary. If we do this with 1,500 people, then it just becomes a lot less exciting. It's funny, I always remember the line from whoever played Sean Parker in the Facebook movie, and he says, "You know what? A million dollars is not cool. You know what's cool? A billion dollars." What I always say to our team is, 1,000 people's not cool. 100 people's cool.
Josh King:
That's exactly right. You could have called your business anything. It didn't maybe make a lot of sense in 1994 when Jeff Bezos came out with the name Amazon for his company selling books, although in retrospect, you understand exactly what he was doing. Why call this thing Cheddar?
Jon Steinberg:
Well, what I've realized recently, and for some reason, I didn't really think about this much for the past two years, is fox. A fox is a furry woodland creature. When I say fox to you, you think of Fox network and you think of Fox Business and Fox News. It is amazing that all these names sort of mean a random thing and then over time they come to be associated with something. Cheddar means money.
Josh King:
In who's vernacular?
Jon Steinberg:
Jay-Z has a lyric and people have called it. It's like sort of a shorthand for it or a fun term that people use. It's like a hip hop term as well. But I wanted a name which was very memorable, which was sort of adjacent or connoted business or money, and I wanted people either to love it or think it was stupid.
Josh King:
It didn't seem to make much sense to Donald Trump when he tried to pronounce it at his first news conference as president elect.
Jon Steinberg:
Yeah, exactly. That was a great moment too. But I'm okay with people thinking it's silly or stupid. At least they remember. Nobody forgets it. Also, I wanted what we do to not seem like we were trying to copy things people were already doing. Using a letter acronym would've seemed like we were trying to be something we weren't. Then I thought that calling it something which was too sort of endemic, money network or ticker or stock news or something, I felt like that would just get lost in the shuffles. It's very much a branding and marketing exercise. It's probably turned out better than I thought it would've.
Josh King:
Is it a measure of Cheddar quote having arrived that a story ran today on cnbc.com about Snap planning two versions of its camera enabled glasses that uses Cheddar as its news source?
Jon Steinberg:
Yeah, that's really important to us. The first step was being able to cover the news in a unique format. Then the second step of our editorial journey is being able to break and make news. We hired a young reporter named Alex Heath. He joined us from Business Insider and he was getting a lot of scoops. He was getting a lot of scoops on Snapchat. He was getting a lot of scoops on Facebook. What I consider a scoop is a unique nugget or information bit that doesn't require a long drawn out investigation process. For two reasons. First of all, those long drawn out investigation processes are unbelievably costly. As a small company, we're not equipped to do that. Then the second piece being that, they're very legally fragile.
Jon Steinberg:
They need to be thoroughly vetted, tons of lawyers involved. That's the kind of thing that a CNN or a New York Times or a Washington Post can do, and a Cheddar can't do that. We don't have the equipment to do that, the people to do that. Alex basically gets stories and these people call him and people email him stuff and employees that trust him. Yes, it's really important to me now that we have stories that then everybody needs to source us. Because that creates credibility. It makes people want to come on our air because they know that we're a place that does original reporting. It bolsters advertisers excitement around us, and it creates a whole flywheel around the company.
Josh King:
Google Glass was roundly panned when it debuted. Do you think Snap's version will avoid some of Google's mistakes?
Jon Steinberg:
Well, the reason why this is a good story is that the first version of the Snapchat Spectacles, they wrote off a lot of inventory on a quarter or two ago. This second version, and I think most people thought they weren't going to try to do another set of spectacles, this new version has fixed a lot of the technical uploading issues associated with the first version. Then they've even announced, or they've not announced, we even broke the story that there's going to be a third version, even further out, that's going to have two cameras that's going to allow you to do depth of field and augmented reality and things of that nature.
Jon Steinberg:
It's a very exciting story because spectacles are a very exciting product. Also, people didn't see it coming because no one thought Snapchat going to stay in the hardware game. We knew last night when we had the story and Alex decided he was going to break it on our air this morning, we knew that it would be big. There's this site we all like, and the Facebook executives, we pretty obsessively called Techmeme. It's sort of like a leader board of the biggest tech stories of the day, and then this story is now on the top of it. Well, we love when that happens.
Josh King:
Do you think it'll get Kylie Jenner back in the fold?
Jon Steinberg:
The funny thing about that Kylie Jenner tweet, which sent the stock down quite a bit, was she was still on Snapchat. It was a bit unfair or a bit misinterpreted that tweet. But to your point, I mean our earlier topic about why is it important to be on the floor, it's the Snap post is, I don't know, 30 or 40 feet from where we are. When Kylie Jenner does a tweet, the question is, does it matter or does it not matter? There's only one indicator of whether or not people think it matters or not. That's the stock price. That day, the stock price, I think it traded down 6% or something based on that tweet that she did. We're here where it traded down 6%. If we're in a green screen studio-
Josh King:
Even midtown somewhere.
Jon Steinberg:
In midtown, you're not where it's trading down. I think that people's perception around live and real and where the action is is essential.
Josh King:
Cheddar did a story a few days ago about Dunkin' Donuts' new concept store. Lo and behold, if you watch the feed today, your anchors have two cups of frothy Dunkin' brew on top of their desk. I remember Starbucks sponsored Morning Joe a couple years ago. How does native advertising fit into your business model?
Jon Steinberg:
It is the sum total of our revenue right now. I mean, the 11 million in revenue we did last year was all overwhelmingly, 90 some odd percent that native branded integration. I think that it's not something that we invented. When I was at BuzzFeed, we did native advertising there that was largely articles, but we borrow from David Ogilvy's great vision around advertorials to do that. With this, cable networks having what is termed the lower third, the lower third of the screen sponsorship with what's called a bug, a logo there, all the major cable networks do that. We just decided to kind of turn the volume up to 12 in terms of doing that, and it's been unbelievably effective. We run brand studies on the efficacy of this. We've got partners like E-Trade and HP and Ally Bank, and Dunkin' and you're looking at 60, 70%, in some cases, 80% lift in purchase intent and favorability as a result of those integrations.
Josh King:
I think the origin species of that would go back decades probably to Camel cigarettes. Remember John-
Jon Steinberg:
Camel Caravan, yeah.
Josh King:
Let's hear that.
Jon Steinberg:
Yeah.
Speaker 4:
The makers of Camel cigarettes bring the world's latest news events right into your own living room. Sit back, light up a Camel and be an eyewitness to the happenings that made history in the last 24 hours. The Camel News Caravan presents today's news today, produced for camel cigarettes by NBC.
Josh King:
The first native advertising.
Jon Steinberg:
Absolutely. Look, I like it when we can point to what we're copying and that it's not new. There's a reason why they did that, because it works and that show is successful for a good long time. The notion of, okay, well, does advertising hurt? Does advertising make people not want to listen to the content? It's exactly the opposite? It's far less interruptive than a commercial and no one has ever forgotten that the Camel Caravan hour was on NBC.
Josh King:
John Cameron Swayze would light up a butt on air just to reinforce that point.
Jon Steinberg:
Absolutely. There's 100 different ways to do these integrations. It can be a thematic integration. With HP, their tagline is keep reinventing. We do segments around reinvention. Then with a partner like Fidelity, we can use their application integrated into the show to look up stocks, to look up earnings, to look up ratios and technical trading points. There's always a thematic way you can do it. Then often there's a product, physical or virtual. Physical in the case of Dunkin' coffee or HP laptops, and virtual in the case of integrating the app into the show.
Josh King:
My household may be one of a dying breed where we pay the full boat to a cable company for every channel available. Is that part of the reason that Disney felt the reason to make their bid for Fox or that Comcast stepped in earlier this week and put in a 31 billion bid for Sky TV?
Jon Steinberg:
I think that there's two trends. The content consolidation trend, which is what you're talking about, which is discovery and merging with scripts and announcing here on the floor of the New York Stock Exchange, and then coming over and David Zaslav and Ken Lowe coming on our air to talk about it. The trend of Fox merging a bunch of their assets with Disney is really probably a response to the consolidation of media heft that Google, Facebook and Netflix have. Murdoch has spoken quite candidly about the idea of being subscale. That really is question of, and even Apple too, in a world of digital giants, you've got to be so big to compete for advertising dollars and audience share. On the question about the full boat of the cable bundle, broadband is growing. Comcast is growing their broadband business. Altice is growing their broadband business. The wireless providers are competing in that as well too. Then video subscribers, people that are getting the full video package, are decreasing by mid single digit percentages.
Jon Steinberg:
You're going from 80 to 90 million households that have video, a cable box, in the US, and there's a decline there. Then there's a growth on the other side, which is these skinny bundles. Which is Sling, Philo, YouTube TV. There's 5 million of those households now, and that doubled in the past year. There was a great report put out by MoffettNathanson, which I think is an excellent research house, that puts the number of 10 million households that will have these bundles by the end of the year. It's a shifting behavior. For the cable companies, the broadband business is so lucrative. It's almost a bit like Apple selling fewer Mac computers, but over time kind of hitting upon their best product. You could argue the best product in the history of the world because it's the highest market cap company in the world. The iPhone. It's a transition.
Josh King:
You recently tweeted out a shot of the cover of Fast Company magazine with the quip, it's the only time I buy print. It was the most innovative companies, I think the 50 most innovative companies. It had The Washington Post up on top based on all the things that I think Jeff Bezos has brought to that business. It had companies like Gimlet Media in the podcast business. Crooked Media, also in the podcast business. Axios and also Cheddar on the list. What do all of these companies have in common?
Jon Steinberg:
All these companies have ... I mean the list is called most innovative, and the innovation is really shorthand, I think for doing something very different. The Washington Post would be investing in technology and original reporting at a time where that's becoming increasingly costly and people are cutting back. Gimlet would be the trail blazer in the podcast space. Axios would be a company that went from sort of zero to 100 in terms of being the heartbeat of DC in terms of covering The White House and having an inside view into that.
Josh King:
Where does Cheddar fall in that? What did you bring home that you said, "We're so happy to be on that list."
Jon Steinberg:
Well, I think that we chose to do something very different at a time where there's not ... I can't think of any companies that are startups that are doing eight hours live a day, going to do 16 hours live a day. It's a bet. When we started it, it was a long odds bet. Then ideally each day, those odds become a little bit less long. Then the problem with that is, the odds become less long, more people enter and more competition comes in. I think the reason why we haven't had as much competition at this point is because the technical complexity of doing the live broadcast and then kind of combining that with a lot of the internet kind of publishing skills, it's a unique skillset. It's not clear to me that we could do what we're doing here at Cheddar and then also run a big website with a lot of images and a lot of articles. It'd be like trying to do two very hard things at once. I think that's where we've managed to kind of pick this very unique niche.
Josh King:
Whether it's The Washington Post or Cheddar, there are so many roots to traditional media and the kind of innovation that you are bringing to the market. I want to hear a clip from perhaps one of the original big media companies and its leader, because I think that has a particular connection to you. Let's hear it.
Speaker 5:
Tonight we're proud to present a Walt Disney classic Robin Hood. This full length animated film is not just for kids, but for the kid in all of us. That stars this Foxy gentlemen, Robin Hood, plus all your favorite characters. There's Little John and Maid Marian, and of course there's evil Prince John and that cold and heartless Sheriff of Nottingham. The brilliant Disney animation along with music and songs brings a new dimension to this legendary classic. Tonight you'll see what really happened in Sherwood Forest.
Josh King:
That Disney's former chairman and CEO, Michael Eisner, introducing Robin Hood, just like Walt himself did in the days of old. When you were 15 years old, Jon Steinberg, you had a summer internship at Disney, NYSE ticker symbol, DIS, which included presenting to Eisner. What did the teenage Steinberg learn from that experience and what do you bring into Cheddar today?
Jon Steinberg:
My whole life, from the age of, I don't know, seven or eight on, I wanted to be a Disney imagineer. I had learned what Disney imaginary was. I went to Disney World. I went to Epcot and my mind was just blown. Then I read about Walt Disney and all I wanted to do was be at Walt Disney. When I was able to weasel my way into getting an internship there and got to work in the R&D group, it was a bit like the movie Big with Tom Hanks, is what I always tell people. I was like a gopher, but I got to be around these incredibly brilliant people. What I learned from that might not be what you expect that I learned from that. I did that when I was 15, 16 to the time I graduated college. I sort of had an internship with this team. Then I graduated college and it was sort of over. At that point, I went and did some jobs that were not so great and my career felt a little dead-ended to me.
Jon Steinberg:
In some ways, I felt a little bit like a child star. Where I felt like my best days were sort of behind me and I was the ripe bulb age of 22. I've had a lot of ups and downs. BuzzFeed was very hard in the first two years and Cheddar was very hard in the first few years. Cheddar's still very hard. I think that what I learned from the Disney thing is, you have lots of ups and downs. The people that give you the love when you need the love are true friends and true supporters. Because when you're on top, everybody loves you. I think I learned a lot of, I guess, humility or tough knocks, I guess, from the Disney experience. Because it was so disappointing to have done something so fun and so creative, and then to have such boring jobs when I was fresh out of college.
Josh King:
Even Eisner's own story, leaving Disney was a tough knock on him, but he's sort of roared back with Tornante now.
Jon Steinberg:
Yes. I got to meet him years later and had an early dinner with him once. I mean, I-
Josh King:
People have second acts.
Jon Steinberg:
People have second, third and fourth and fifth acts. My dad grew up pretty poor in Newark, New Jersey and his parents insisted, being the first member of the family to go to college, that he be a doctor. My dad was not a good student and didn't have any interest for medicine and was pushed into it. Was an okay doctor, but he wasn't blowing out the doors. At 36 years old, he decided he wanted to go into real estate. He moved us all from New Jersey to New York. Today he's one of the most successful residential real estate brokers in New York City. It's constant reinvention. Things constantly change. I do like that Churchill line. I always get it wrong. It's something like, to change is good and to change often is divine, or thing like that. I kind of live by that.
Josh King:
More on Jon Steinberg's long and winding path through the Sherwood Forest of big media after this.
Speaker 1:
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Josh King:
Back now with Jon Steinberg, founder and CEO of Cheddar. I saw a recent photo, Jon. You were talking before the break about your experience at BuzzFeed. You took it at BuzzFeed's office on Spring Street, lower Manhattan. Part of that headquarters now boot storage for a shoe store. You went from your teenage years with Walt Disney imagineering to gigs with Google and BuzzFeed.
Jon Steinberg:
It's boot storage because BuzzFeed is in a much bigger office and outgrew that space. Actually the boot store that was downstairs, even when we were there, I guess the boot is stores doing so well ... It's like an expensive boot company, Frye boots. I don't really know the kind of boots they are, but I know it's called Frye. That they took the second floor for boots storage. It's not like they turned it in ... For me, it was just like-
Josh King:
But BuzzFeed has had challenges figuring out how to take its next step. I mean, you had the news division possibly talking to Laurene Powell Jobs, and these are rumors, but it's trying to figure out how it grows from adolescence to adulthood.
Jon Steinberg:
I would say the reason why I went back there and took the picture is that, I don't like looking backwards, I really don't like looking backwards, but I do like kind of reminiscing and trying to think about what I learned in the different places and remembering what it felt like to sit in that office in June of 2010 when I went to work there and how hard it was. There was no business coming in and people didn't think I was particularly experienced because I wasn't particularly experienced. Most people thought I would just to get fired.
Jon Steinberg:
You kind of try to put yourself back into that mindset from time to time and remember what it was like and how you kind of solved your way or worked your way out of those problems. Then I think, when the next set of problems comes along, you can kind of reflect back on, well, I got through this and I'll get through the next thing. That's how I think you stand the cutting edge. I think you stand the cutting edge by remembering that there's always a different problem. There's always a different hassle. You got through the last one. You'll get through this one. That's really important, I think.
Josh King:
Moving on from BuzzFeed, it was after the stop at MailOnline to Cheddar. You said in the past that there's too much emphasis on the idea and not enough on a grind. Cheddar did follow that model. The company started, I think in January 2016, and you were on the air by the middle of April. How did you make that happen so fast, and would you do it the same way again?
Jon Steinberg:
Well, we had a lot of support from the New York Stock Exchange. We really did. I mean, it was all here and we just brought the equipment in and the fiber and the infrastructure was here. That was a heck of a jump start for us. We wouldn't have been on the air as quickly were it not for that. But to answer the first part of your question, I just don't think ideas are worth nearly as much as people think. I have people come up to me all the time and say, "I have an idea for this. I have an idea for that." is the expression my grandfather used to say to me, your idea and a subway token will get you on the subway.
Jon Steinberg:
As a little kid, I didn't know what that meant. It kind of confused me. Now, what it meant. What it means is, the idea is worth nothing. You're going to get on the subway with the subway token and your idea doesn't actually do anything for it. I really believe that if more people took their bad ideas and just worked really hard on them, rather than waiting for the perfect idea, they would create value. Now, I can't tell you how much value Cheddar would've been worth. This is really kind of like the key to the whole thing. Let's say that we did one hour of Cheddar and people liked it. For some reason we got to three hours, let's say, and the audience capped out and the demand capped out.
Jon Steinberg:
Let's say we were doing three hours a day, we had 30 employees, we'd managed to get the business profitable, and we had 200,000 people a day watching it. Not millions, just 200. The company would not be worth what it is worth now. But assuming that we capitalized it correctly and we didn't get ourselves topsy-turvy, the business would be worth more than the capital that got put in into it. When people used to say to me, "Is the audience big enough for Cheddar? Will it be big enough?" My answer was always, "It'll be big enough as long as we don't over capitalize it."
Josh King:
How's the company valued today?
Jon Steinberg:
The last round, we were valued at 85 million post.
Josh King:
You were once, I think when you started out, I don't think you'd describe it this way, but others did, was the business news channels for millennials or the CNBC for millennials, the way they live their lives. The stats backed that up in 2016. But we're now seeing old farts like me sometimes tuning in yeah. With 85% of adults in 2017 now getting their news from their mobile devices. Have you seen a change in the demo demographics of your average viewer?
Jon Steinberg:
Yeah, certainly. But we have not yet hit the point where we are so big that the average age tends to creep up, but that's a good thing. Michael Lewis wrote this book called The New New Thing. In recent years, like that book is less remembered than The Big Short and things like that.
Josh King:
I remember The New New Thing.
Jon Steinberg:
Or Moneyball. Everybody likes the new new thing. Everybody likes new media. The fastest growing segment, to your point of iPad users, is senior citizens. I've always felt that if you get the young people, you get the older people. Because young people drive culture and unless the culture and the content is so, I don't know, dramatic, nine inch nails, which is going to be very hard or nirvana, it's going to be very hard for people in their 50s and 60s to adapt. Not unlike it's very hard for me to like Miley Cyrus and my kids like Miley Cyrus. In music, it can be. But in most cases, young people tell you about a great TV show.
Jon Steinberg:
They tell you about a great movie and it creeps upward. I've witnessed that in all of my older friends. I've witnessed that in my grandparents and business mentors and leaders that I interact with in their 60s and 70s and 80s. I mean, I've been privileged to spend a bunch of time with Jack Welch through my relationship with Strayer. Jack's interested in everything. He's interested in all the stuff that young people started. Now, I know that going the other direction is very hard. Golf is not going to see a renaissance amongst 20 year olds. It's very hard to go that direction.
Josh King:
I think you wrote in The Hollywood Reporter in 2016, that by 2017, everything in the TV ecosystem will be confused and up for grabs. I think we'll see single digit percentage cord-cutting hit double digit percentage cord-cutting. What's the prophecy looking now?
Jon Steinberg:
I think, it's looking pretty good. I think it is looking pretty good. I was reading an analyst report today on AMC and they said that when you talk about AMC, you're really talking about The Walking Dead. Which is their mega hit show. If your drama is in comedies, it's not clear to me that you need a cable network. You probably just need a way to deliver that content. Maybe it's Netflix. Maybe it's Hulu. Maybe it's something new that's direct to consumer. Then if you are live news or part of that live suite, you've got a very lucrative existing audience and you need a way to get to a younger audience.
Jon Steinberg:
I think that's what the consuming public is going to want. YouTube TV advertised heavily during the World Series, and then they advertised during the Super Bowl. I didn't think we'd be at 5 million subs for skinny bundles by this point with 800,000 added in the last quarter. I think it's looking pretty good. Maybe we'll be back here, we'll do the ICE House again in a year, and maybe I'll be off maybe cord-cutting will be 9% or 8%, not 10. We'll see.
Josh King:
You have been on the record many times, Jon Steinberg, most recently, I think at the 2017 IAB conference saying that traditional advertising is broken. I'm watching your feed today. I'm seeing two ads. One is for those strap-on chains that go on your feet to walk in snow, and it's just really this beautiful one minute long montage.
Jon Steinberg:
They're actually not commercials, but go on.
Josh King:
Well describe what that is because what I was thinking watching that was, I got to get myself a pair of those. I'm headed up to the Catskills tonight and there's a foot of snow there.
Jon Steinberg:
Right. Part of the content that we found people really like on Facebook and Instagram is these gadget type videos. These kind of surprising and amazing gadgets. The one that we did that was the biggest was ... They're not all things that you can buy. People think they're commercials, but the most popular one we've ever done, it was a clothing folding machine. You dumped your clothing into this robot and the robot folded the clothes for you. That did 90 million views. I actually think it's 100 million views now.
Josh King:
But doesn't someone want to capitalize on that and sell those?
Jon Steinberg:
Well, you can't. But it's not even really available on the market yet. It's like sci-fi type stuff. Those do very well. We have one this week which is this kind of ... It's almost like a baster that you can inject into a steak. Ian, this will be good for you for the event on Sunday. A bunch of cooks that are friends called. They want to get it. We put the affiliate links in. It's, you can put your rub or your marinate into this injector and then you can either put it into a rib roast or into a chicken or something like that. We make some affiliate revenue off of those. I mean, it's not what's keeping the lights on. We mostly do it because certain platforms require commercials. Sling and YouTube TV and Philo, the skinny bundles we're on require commercials. Facebook, we are not able to insert commercials. Twitter, we're on able to insert commercials. You know when you're watching TV on the internet sometimes and it says we are in a commercial, we'll be right back? Have you ever seen that guys?
Josh King:
Yeah.
Jon Steinberg:
Okay. That's like a slate. When we found out about how that worked, we were like, "Why do they put that in? Let's just put fun gadget videos and fun things we call interstitials into that space."
Josh King:
Do you produce these interstitials or you get them from elsewhere?
Jon Steinberg:
We find all sorts of people all over the internet. We contact them. Then these people are very happy. Some of these are kickstarter people. Some of these are inventors who have made little videos.
Josh King:
You're applying a graphical consistency to them.
Jon Steinberg:
Yeah. We cut them. We tell the story. We actually now have moved into actually producing our own versions of these. One that we did that was very successful was mop slippers, which is exactly what it sounds like. We went and got the mop slippers, and we spilled things on our floor and Aton, who's a guy who works for us, mopped up stuff in the mop slippers. This stuff really sounds ridiculous until you think about the fact that-
Josh King:
I was watching it. I was glued to it.
Jon Steinberg:
No, The New York Times has a wedding section, a fine dining section, an architecture section. Cheddar has a weird and wild wacky gadget section. It's our funnys.
Josh King:
Well, I miss the old NYT circuit section, because I used to devour that
Jon Steinberg:
I love that.
Josh King:
... and it's exactly like that.
Jon Steinberg:
Tuesday. Well, Tuesday was science time.
Josh King:
Thursdays.
Jon Steinberg:
Tuesday was science time
Josh King:
Thursdays was-
Jon Steinberg:
... was circuits. I miss Computer Shopper.
Josh King:
As we wrap up, Jon Steinberg, Cheddar has had an incredible two years so far. You started a new show with Fusion TV called The Point that you are hosting. Some episodes are shot right here at the New York Stock Exchange. Let's play a brief clip.
Jon Steinberg:
Do you think Plated has played an important role in getting men to cook and carry the labor a little bit more in the home life?
Speaker 6:
I definitely do. I think Plated enables anyone to cook a great meal at home from scratch. I think oftentimes perhaps men don't do that just because they're not comfortable doing it. But with Plated, it makes it easy. In my home, my husband cooks Plated for me.
Jon Steinberg:
He's cooking a Plated meal that you designed?
Speaker 6:
Yes.
Jon Steinberg:
So are you backseat driver cooking or how does that work?
Speaker 6:
I try my best not to be a backseat cook. Our apartment's very open, so I usually sit on the couch with a glass of wine probably and he's chopping the bell pepper and I see the slices are too thick. So I'll tell him to cut them all in half again.
Josh King:
That was you with Elana Karp, the co-founder of Plated. I wonder if you are a Plated customer now.
Jon Steinberg:
We are. We actually really do like Plated. We use it a lot. We used it before. That's part of how we booked it.
Josh King:
What are your plans for The Point with Fusion and future content development for Cheddar?
Jon Steinberg:
They've been a tremendous partner and we classify that type of content as what we call the on demand version of our content. We have a partnership with Spotify now. As the press has speculated, Spotify may or may not be direct listing their company soon. We're one of eight partners in what's called Spotify Spotlight, and we produce a weekly news show that goes on to Spotify. We like this. For us, this whole multiplatform approach is, some people want to show, some people want a playlist as news, like on Spotify, and we sort of bob. We even put the content in the format that people want it.
Josh King:
Your favorite meal on Plated?
Jon Steinberg:
I like veal meat balls quite a bit actually. I had that this week. I mean, the kids can even cook these Plated meals. They're so easy. They're very visual the way you get the recipe.
Josh King:
You're making me hungry. It's Friday night. Time to go home and get dinner.
Jon Steinberg:
Yeah.
Josh King:
Jon Steinberg, thanks so much for joining us at the ICE House.
Jon Steinberg:
Always great being here, guys. Thank you for the time.
Josh King:
That's our conversation for this week. Our guest was Jon Steinberg, founder and CEO of Cheddar Inc. Cheddar broadcasting each and every weekday from the floor of the New York Stock Exchange. If you like what you heard, please rate us on iTunes so that other folks know where to find us. It's the easiest thing you can do to help support the show, help attract more listeners to it. If you've got a comment or a question you'd like one of our experts to tackle on a future show, email us at [email protected] or tweet at us at NYSE. Our show is produced by Pete Ash and Ian Wolf with production assistance from Ken Abel. I'm Josh King, your host, signing off from the Library of the New York Stock Exchange. Thanks for listening. Talk to you next week.
Speaker 1:
Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties expressed or implied as to the accuracy or completeness of this information and do not sponsor, approve or endorse any of the content herein. All of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell or a solicitation of an offer to buy any security or recommendation of any security or trading practice.
