I met two smart young companies this week, both in the business of streaming video content to young consumers. Brut, launched in 2016 in France, and Cheddar, launched in the same year by BuzzFeed co-founder Jon Steinberg, both believe that the future is in live video. They see a migration away from cable and toward OTT premium subscription platforms. The contention is borne out by statistics on viewership. In the last seven years, the time watching traditional television for 12-17-year-old consumers has dropped by 50 percent, the same for 18-24-year-old consumers, while for 50-64-year-old consumers it has remained flat and actually risen for those 65 years plus by 7 percent. For both the 18-24 and 25-34-year-old consumers, the smartphone is slightly ahead of TV in platform usage (number of sessions), which is in sharp contrast to the 45-49 year olds who are eight times more likely to watch content on television.
Brut is attempting to be the centrist news medium for the millennial. The number one source of news on the French election for the younger consumer was Brut’s Facebook page. The mix of content is 30 percent hard news, 30 percent news focused on women or minority groups. They put up 5-7 videos per day, some of which are native advertising. Brut has learned that its young consumers have no patience for the traditional ad so they do their own creative. In a paid execution for Netflix, Brut did a video promoting the Star Trek Discovery show with a short subject on NASA’s mission to Mars.
Cheddar is taking a different approach in focusing on financial news. It has studios in the Flatiron District, in Hollywood, at the New York Stock Exchange and in Washington D.C. Its producers have been able to lure important interview subjects such as Mark Cuban, owner of the Dallas Mavericks or Senator Tim Kaine, who was the vice presidential candidate for Hillary Clinton in 2016. There are 1.5 million unique viewers a day, six million a month who go direct to the site and another 200 million who come through Facebook. Native advertising is again a core part of the business model. For Dunkin’ Donuts, Cheddar has conceived a daily segment called Grab and Go, which is news that you need to know every day, with Dunkin’ brand recognition and occasional Dunkin’ spokespeople on products. Other advertisers are in the financial services sector, including Fidelity and American Express. These deals were all done direct with the companies.
The business model for media in the future requires recurring revenue, which means long-term relationships with sponsors. PR firms must now be able to tie together earned and paid concepts. The media we value so highly for its credibility and reach will not survive without branded content. I believe in the media owner’s ability to designate clear swim lanes for classic journalism and sponsored material. I also believe that smart PR teams will be able to take high quality earned content and boost it in social media through smart paid initiatives. This is the essence of communications marketing; solving a client problem through a mix of marketing tools. It is time for us to make the case to CCOs and CMOs alike that the revolution is here and that the rebel forces need to be funded.
Richard Edelman is president and CEO.