A fad channel is a channel based on a current game fad rather than general gaming. For example only doing pokemon games, Knights and Dragons, minecraft and etc.
For example, after the success of Twitch Plays Pokemon, which spawned a whole series of collective LP livestreams controlled by the entire population of that channel's chat room on Twitch.tv, a spin-off fad launched called Fish Plays Pokemon, in which the game was controlled by a goldfish swimming about its cage. This spawned a series of fads such as Fish Plays Street Fighter, etc.