Online-only video networks like Cheddar and TYT Network have raised tens of millions of dollars in venture capital money on the premise that online video viewing will skyrocket. Now comes the hard part: figuring out how to make money.
Both startups have been generating revenue from advertising—Cheddar reported $11 million in sponsorship revenue last year—as well as from areas like subscriptions or merchandising. But they’re resting much of their business hopes on getting included in the various new “skinny bundle” packages of streaming channels offered by everyone from YouTube to Hulu and Dish’s Sling. Both Cheddar, a financial news network, and left-leaning news channel TYT are hoping to recreate the traditional cable model by someday getting distribution fees, executives at both say.