Pseudo Bites the Dust
Apparently struggling under the burdens of high debt and operating costs, Pseudo (www.pseudo.com)shut down Monday.
Pseudo's home page has the message, "Thanks to all the viewers and the talentthat made Pseudo so special."
The company recently hired CIBC Oppenheimer to help raise an additional round of funding, and was rumored to be looking for a buyer. Just last week, Jeanne Meyer, Sr. VP of Marketing at Pseudo, was denying rumors of a shut down. "I won't comment on rumors and speculations," she said at the time. "While they're entertaining, they're not true. It's business as usual."
But on Monday, the rumors proved true, as David Bohrman, CEO of Pseudo announced to his employees that the site would be closing its doors due to unsuccessful efforts to raise more capital.
Calls to Pseudo were unreturned today.
The eulogies are already coming in. "I'm very saddened," said Thomas Edwards, President of TheSync (www.thesync.com). "They were an incredible pioneer in the field."
Pseudo's Last Ditch Efforts
Pseudo is just the latest content site to go belly-up. Recently, content companies like Pop.com, DEN, and FasTV have all shut down, citing lack of funds and investment opportunities. Even more content companies (iCast, Shockwave.com, APBNews, NBCi, LoadTV, and Emusic, for example) have tightened their belts and cut staff.
In late June, Pseudo laid off 58 employees, and radically changed its format. The plan was to combine its ten channels into one live continuous show, thus saving money in video production. Pseudo's recent last-ditch efforts weren't very well accepted by many, however. Although the company received lots of press and traffic during the latest Republican and Democratic conventions, the bump didn't last long enough.
Edwards says that going into a live format with interactive chat didn't help generate more viewers. "You need cyberstars to make it happen," he says. In addition, time differences around the world make live shows much more inconvenient for viewers. "What's good for New York, is bad for China," he said. Edwards points to one of his popular shows, Snackboy, which has a healthy archive that's constantly being accessed at all hours.
Edwards has been operating his content site for years, on a shoestring budget, with just two employees--himself and his wife.Unlike Pseudo, his shows are taped, then edited at his leisure before appearing on the site. But Edwards admits that the live format can be a good thing. When TheSync.com experimented with live streaming of Jenni of JenniCam (www.jennicam.com), traffic "went through the roof."
Where's The Competition?
With the exception of shockwave.com, Pseudo was the last high-profile online-only content company still in operation. Companies like MediaTrip, Icebox and iCast still remain, but aren't doing original content, or are focusing on web animation.
Another low profile content competitor is PlayTV, an off-shoot of Play (www.play.com),which makes a web broadcasting box. PlayTV (www.playtv.com) features about half a dozen different live shows a day, such as "Two Guys on a Couch" which features, well, two guys on a couch talking about whatever they want to talk about, "But Seriously with Brian Malow", a talk show that mixes comedy and science, and the ever popular "Kiki at Midnight," where Play co-founder and evangelist Kiki Stockhammer puts on an anything-goes show.
According to a source at Play, there were plans to market PlayTV as a new entertainment site, but they're now rethinking that strategy, calling the environment "a little risky".
Pseudo's History
Pseudo was founded in 1994 by Jupiter Communications co-founder Joshua Harris, and was originally intended to be an entertainment venue for members of the alternative, young, urban culture. Early in its life, it featured just text chat, and gradually added audio, and finally video to its shows.
Although much was written about DEN's Hollywood excesses, Pseudo too seemed to spend lavishly. Early on, Pseudo threw big parties at its studios in downtown New York. According to one partygoer, there was plenty of booze and pot-smoking when taping ended on Fridays. Company legend was that Harris even lived in the studio when he was first starting the company.
In an attempt to become more mainstream, Pseudo hired veterans from the TV world to produce shows, and even got David Bohrman, a former CNN executive, to sign on as CEO.
Funding Dries Up
Just last May, Pseudo received $14 million in additional funding from a group of investors, including Desfosses International (backed by luxury goods group LVMH), Tribune Ventures, and Intel Capital.
Despite the withering of its investment, Intel Capital is "still interested in making strategic investments in companies that help grow the Internet economy," said Robert Manetta, spokesperson for the investment arm of the semiconductor giant.
In addition, as for future investments, like the one Intel Capitalmade in Pseudo, Manetta says, "Certainly we’d like to see companies in the broadband rich media content space grow – whether it’s a company ahead of its time or not."
But the cash influx just wasn't enough, and Bohrman was scrambling as recently as this morning to get a buyer or another investor.
"Pseudo just ran out of time," said Steve Vondehaar, analyst with The Yankee Group."They’d been around a long time and just couldn’t wait around another three years for the market to develop."
But Vondehaar doesn’t see Pseudo’s downfall as the sounding of a death knell on the industry as a whole, "I guarantee there’s a new set of players out there preparing to be multimedia Webcasters, flush with fresh war chests and ready to throw money into the streaming media consumer space," said Vonderhaar. "Only when we see one of these companies succeed will we be able to say, ‘Oh, that’s what Pseudo was missing.’"