Netcaster Pseudo Programs $14M Fourth Round

Pseudo Programs Inc. of New York is the latest of several Internet-based video content producers to raise capital from venture firms.

Earlier this month, Pseudo raised more than $14 million in its fourth round of venture financing. The round was led by Prospect Street Ventures of New York. Tribune Ventures, the venture capital arm of The Tribune Co., was the round’s other first-time investor. Returning investors include Sycamore Ventures, Big Wave Ventures, FD5 and Winfield Capital.

“The Internet industry has gone through several hype phases – content, portals, browsers, etc. – and the pendulum has swung back so that people are now paying attention again to content,” said Chief Executive Larry Lux. “With more bandwidth and media streaming, we will begin to see a critical mass of players out there.”

Like most netcasters, Pseudo’s target demographic is the 18-to-34 year-old market, although it is not limited to this. Pseudo differentiates from other online video producers, like Digital Entertainment Network (PEW June 7, P. 2), in that it produces non-fiction programming that is generated from its studios in lower Manhattan. Pseudo produces more than 250 hours of programming each month, including professional wrestling, poetry readings, hip-hop and other genres often overlooked by traditional media.

“Our programming is produced from a technical standpoint in a way that is similar to television,” Lux said. “With [Internet] distribution come several issues in how you encode programming.”

While Pseudo owns all its own programming, content is distributed through hundreds of online properties including C/Net, Web-TV and Lycos. Lux said he expects Pseudo programming ultimately will be distributed through traditional broadcast channels.

Tribune is one of the world’s largest broadcasters. The company also has equity partnerships with several Internet companies including America Online, iVillage and Excite.

“We are not trying to put our assets together as a network,” said Shawn Luetchens, manager of Tribune Ventures. “Pseudo is an important cog in what is going on in the broadband communications area, and we have an opportunity to learn from them.”

Proceeds from the investment will go to continued production, studio construction and both traditional and online marketing campaigns.

Lux founded National Geographic Interactive in November 1995 and ran the site from then until he joined Pseudo in February. Pseudo was incorporated in 1994 by Joshua Harris, founder of Jupiter Communications.

Lux said the company has not yet decided if it will go to the private or public markets for its next round of financing.