And just like that… it is gone. CNN+ lasted about a month before getting its cord cut by Warner Bros. Discovery. The decision is the company’s first significant maneuver since the official merger of WarnerMedia and Discovery earlier this month.
WarnerMedia spent somewhere in the neighborhood of $300 million to launch CNN+ and budgeted more than $1 billion on the streaming service over four years. More than 300 employees worked at CNN+, including the recent hiring of key news and entertainment personalities to anchor the streaming service. Hopefully, they will find work at the company’s other news and entertainment units.
Was there room for another streaming service in the increasingly crowded field of streaming services?
Was the programming mix of CNN+ in alignment with the highly valued 25-54 demographic group most valued by advertisers?
Was the strategic direction of CNN+ simply “dead on arrival” amidst the new executives in the boardroom?
The CNN+ decision comes on the heels of Netflix’s harrowing announcement. For the first time in a decade, Netflix this week reported a quarterly decline in subscriptions and it anticipates losing two million more subscribers over the next three months, raising questions about the willingness of consumers to pay for streaming services.
The economics of streaming can be challenging. Niche content producers – with loyal and fanatical audiences – can fetch a premium for their programming. But most people that stream are unwilling to pay a premium for multiple services, even if the price is $5.99 (the monthly subscription of CNN+).
With CNN+ in transition, CNN needs to focus on its core news operations which (politics aside) is struggling in a post-Trump news cycle. Its ratings for the first quarter of 2022 were abysmal. According to Nielsen, among the 25-54 demographic CNN was down 56 percent. News is big business. In 2020, CNN earned $715 million according to the Pew Research Center.
However, news programming – on both sides and across the board — needs a reboot. The focus needs to be more on reporting and less of opinions and punditry. This would restore journalistic integrity, attract stronger audiences as well as the brands that want access to them.