Pseudo Programs Inc., one of New York's first generation of Internet companies, shuts its doors Monday, a victim of heavy debts and a lack of investor confidence. The closing brings an unceremonious end to the content programming studio that launched in 1994 and was one of the first to fire a salvo at the mainstream media industry.
Monday, at 2.45 p.m. EDT, CEO David Bohrman, after an emergency meeting with the board of directors, announced the decision to its staff of 170 employees, all of whom are now out of a job. "Even if we go through bankruptcy, severance is a priority," Bohrman told his staff. But "as of now, we are all former Pseudo employees."
The decision comes just weeks after Pseudo tried to attract a last-ditch round of financing to save its struggling venture.
Despite receiving US$14 million in May from a subsidiary of French media and fashion powerhouse LVMH, the company has since received few breaks. Earlier this summer, Pseudo hired CIBC Oppenheimer to help raise between $30 million to $50 million to keep the company afloat.
Pseudo's hopes dimmed in recent weeks when the company put itself up for sale, but it failed to find interested parties among the streaming media industry. The company continued to talk to other unnamed investors up until the last minute, says company sources.
Although it is unclear how the company plans to proceed, Bohrman assured the staff that the executive team will continue to seek financing or a buyer and assess what it can liquidate. "It's the world's worst time to raise money on the Internet, especially when the words content is attached to it," said Bohrman. "The deathnell was Pop.com. If Jeffrey Katzenberg can't make it ... it gives pause to people who have been thinking about this."
Launched in 1994 by Jupiter Communications co-founder Josh Harris, Pseudo was a pioneering force in creating original programming streamed over the Internet. Originally designed as an Internet radio Webcasting service, the ambitious venture eventually upgraded to video in the late 1990s.
In many ways, the quirky channels and shows reflected Harris' eccentricities. The programming originally was targeted to an alternative urban audience and running the gamut from hip hop to video games to alternative underground culture.
Pseudo had hoped to file to take the company public last fall but was derailed after then-CEO Larry Lux departed the company. Former CNN executive David Bohrman stepped in last January.
Bohrman arrived with a plan to revamp the business completely and to refocus Pseudo toward more mainstream fare - including daily Webcasts devoted to finance, technology and sports. Bohrman lured a team of producers and executives from mainstream media including Mark Berniker, who had worked with Bohrman at CNNfn.
Bohrman further changed the business when the company slashed about 60 employees and reorganized earlier this summer. In the new model, the company aimed to launch a 24-hour Webcast that appeared to be a blend of MTV and ABC's late-night World News Now program. Pseudo's final high-profile endeavor - an elaborate and expensive stab at covering the Republican and Democratic national conventions - fell short of expectations.
Employees today were trying to stay philosophical at being part of the latest dot-com flameout. Says one former employee, "We tried to make it work, and it didn't."