CNN to Make Dramatic Cuts as Major New Venture Flops: Report
At the end of March, CNN launched a streaming service called CNN+.
But after a slow start, investments and projections are likely to be cut back dramatically, Axios reported Tuesday.
In other words, CNN+ might be close to flopping only less than a month after its public debut.
CNN+ is meant to be similar to other streaming services, like Netflix or Disney+, but instead of movies and entertainment, it is news-focused, NPR’s “Morning Edition” reported March 30.
The goal of the CNN+ is to combine live new coverage and other news programming and exclusive CNN shows and interactive interviews, CNN reported.
A subscription to CNN+ costs $6 per month, or $60 for a whole year, NPR’s Eric Deggans reported, with subscribers in the first four weeks of the platform’s launch getting a discount of 50 percent for the life of the subscription.
Some of the major names anchoring for the new service are longtime CNN veteran Anderson Cooper and Chris Wallace, who spent most of his career with Fox News before leaving the network abruptly in December.
However, CNN+ is not getting the response it anticipated and “hundreds of millions of dollars” are expected to be cut from its original investment plan, Axios reported, citing two unnamed sources.
Originally, the plan was to invest about $1 billion into the streaming service. So far, about $300 million has been spent on the subscription service with a large part of that on marketing, according to Axios.
The service was also expected to bring in about 2 million U.S. subscribers in the first year and break even after four years with 15-18 million subscribers, Axios reported.
But now the fate of CNN+ is uncertain.
Since CNN+ is a stand-alone streaming service, it was not automatically connected to giants of TV streaming like Apple, Google TV, Android TV, Amazon Fire TV and Roku. These are generally considered the streaming “gatekeepers,” Deadline reported.
The launch of CNN+ came only a week before CNN officially became part of Warner Bros. Discovery, the product of a merger between Discovery and WarnerMedia. Warner Bros. The merger took effect Friday, CNN’s Brian Stelter reported on Monday.
Besides CNN, Warner Bros. Discovery’s “huge raft” of media assets includes TNT, Turner Sports, the Warner Bros. movie studio, and HBO, Stelter wrote.
HBO Max, a corporate sibling of CNN+, also had difficulties when it first launched in May 2020 until it struck a deal with Roku later that year, according to Deadline.
On Monday, Roku started carrying an updated CNN app that includes access to CNN+ programming, Deadline reported.
However, CNN+ still remains unavailable on Google TV and Android TV.
While some think that the deal with Roku was a step in the right direction for solving the CNN+ distribution gap, the service still seems to have a long way to go.
Already, there was news that CNN+ employees were bracing for possible layoffs later in the spring, Fox Business Network’s Charles Gasparino wrote in a Twitter post a day after the launch of CNN+ on March 29.
Breaking: @CNNplus employees bracing for layoffs possibly as soon as May amid projections of lackluster sales of new streaming channel; CNN employees say new streaming channel could be merged into larger @discoveryplus as early as May unless subscriptions pick up 130 @FoxBusiness
— Charles Gasparino (@CGasparino) March 30, 2022
That, along with investments being drastically cut, leaves CNN+’s future very open to question.
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