Before merger, quiet concern about CNN+

The New York Times via SF Gate ^ | April 24, 2022 | By John Koblin, Michael M. Grynbaum and Benjamin Mullin

[Oldeconomybuyer]

David Zaslav had been CEO of Warner Bros. Discovery for all of a few hours when he learned he had a problem.

On April 11, the day his newly merged company began trading on Nasdaq, Zaslav greeted New York employees with pasta and ice cream bars, delivering an impromptu rallying cry to his new charges. He was on his way to Washington, next stop on the coronation tour, when a call came in.

His team had just gotten its first look at data from CNN+, the much-promoted subscription streaming service started two weeks before, and the news was grim. Fewer than 10,000 viewers were watching at any given time, despite a multimillion dollar ad campaign and big hires like Chris Wallace. They were recommending a cold-eyed review.

Three days later, shortly after Zaslav appeared with Oprah Winfrey for a rah-rah company town hall, he gathered his deputies inside a low-slung stucco building in Burbank, California, on the Warner Bros. studio lot, and said he agreed with their conclusion: shut it down.

The near-instant collapse of CNN+ amounted to one of the most spectacular media failures in years, a $300 million experiment that ended abruptly with layoffs in the offing and careers in disarray.

This account is based on interviews with a dozen people intimately familiar with the rise and sudden fall of the streaming service. They spoke on condition of anonymity to share the details of sensitive conversations.

CNN+ was introduced to the world on March 28, a day before its debut, with a splashy party on the 101st floor of 30 Hudson Yards, the futuristic Manhattan skyscraper that houses CNN. Network stars posed for pictures by a giant fiberglass sculpture of the CNN+ logo, New York City sprawled beneath their feet.

[FlingWingFlyer]

I’ll bet the 10,000 viewers were college Snowflakes who watch shows like SNL and all the late night talk shows. Ya gotta be high or drunk.

[Dilbert San Diego]

A $300 million investment just dissolves overnight???

I’m no media mogul, but, with so much money and resources of talent such as Chris Wallace involved, wouldn’t they take more time than just a month, to see if they can gain an audience???

Or, is it a situation where there are staggering operating losses, for each day they continue to operate with only 10,000 viewers, which prompted them to pull the plug?

[cgbg]

The shareholders should demand a bunch of firings for this debacle.

Stupid needs to hurt.

[hflynn]

Big hires like Chris Wallace? They can’t be serious/

[XRdsRev]

How was this a surprise to anybody ????? You have one of the lowest rated news outlets trying to sell the same stuff they can barely give away for free and it is shocking that nobody wants to buy it ????

You know whose careers should end ??? Those who recommended starting up CNN+ in the first place. Their business judgement is obviously worthless.

[Flavious_Maximus]

The subscription service was $4.99 a month. That comes to $1665 a day of revenue. That would pay the salaries of maybe one producer and a Grip/Lighting Technician.

[chaosagent]

The subscription service was $4.99 a month. That comes to $1665 a day of revenue. That would pay the salaries of maybe one producer and a Grip/Lighting Technician.

Not quite that bad. They had 150,000 subscribers, with 10,000 watching at any one time.
150,000 times $6 = $900,000 per month. So $30,000 per day.
Better, but still not great.

[nwrep]

I am surprised they did not mandate it as required viewing for woke school districts, big city libraries, and colleges like Evergreen, where each student would have had to buy a subscription as part of their semester fees.

In not exploiting the massive woke liberal ecosystem to sell this product to their potential audience, they committed fiduciary malpractice. They could easily have garnered upwards of a million subscriptions using this tactic.

[Blennos]

I understand they had only 10,000 paying subscribers. The rest were watching gratis.

[sauropod]

quiet concern??

I certainly would not be "quiet."

[Graybeard58]

I’m no media mogul, but, with so much money and resources of talent such as Chris Wallace involved, wouldn’t they take more time than just a month, to see if they can gain an audience?

.......................................................

If they had only polled F.R. before investing gazillion$, they would have known it was gonna be a catastrophic flop.

Chris Wallace should have been their number one clue.

[verum ago]

A $300 million investment just dissolves overnight???

I’m no media mogul, but, with so much money and resources of talent such as Chris Wallace involved, wouldn’t they take more time than just a month, to see if they can gain an audience???

Or, is it a situation where there are staggering operating losses, for each day they continue to operate with only 10,000 viewers, which prompted them to pull the plug?

It's the staggering operating losses one. Or put by way of analogy: if your airplane loses its engine on the climb out after takeoff and you don't have much altitude or airspeed, you don't keep trying for your original destination. You make an emergency landing (or in this case, put on a parachute and jump).

CNN+ was a terrible idea from the start, and doomed from the start. If you read the article, it does give some insight into why they tried it: CNN's ratings have been plummeting for the past year plus while streaming services have been booming (collectively, there are some strugglers like Netflix in there), so they figured streaming is the way to go.

Problem is, they didn't actually examine why CNN's ratings have been in free fall: they ascribed it to being a 'legacy' media platform (all of which are suffering right now), when in fact CNN has performed very poorly relative to the other legacy platforms for awhile now. In other words, they thought they had a generic platform issue common to the industry due to changing times, when really they have a content / viewer trust issue.

But human nature and egos being what they are, they couldn't admit to themselves that they need to change their actual product, not just its delivery method- the former requires some unpleasant introspection, while the latter allows them to adopt a "victim" mindset- specifically, they're 'victims of the times,' which works well with their leftist thinking.

CNN+ had 150,000 subscribers, with only ~10,000 online at a time during daylight hours, which is pretty dismal. That gives them what, 9 million dollars of annual revenue? 9 million doesn't even pay for the top 5 personalities/pretty faces, never mind all the other 'talent,' the "hundreds" of other workers, taxes, operating costs, etc... And this article doesn't mention it, but I recall seeing at least one other article mentioning that CNN+ viewership actually dropped after the first 10 days or so. That's a horrible sign. Not many people even cared to try the service in the first place, and many of those didn't like it enough to continue viewing- CNN+ needed explosive growth just to remain solvent, but was likely in fact facing a wave of subscription cancellations, possibly large enough to offset additional subscriptions.

I guess all of the above is a longwinded way of invoking the old saying that the Discovery execs wisely decided to follow:

Don't throw good money after bad

[verum ago]

If they had only polled F.R. before investing gazillion$, they would have known it was gonna be a catastrophic flop.

If only they'd polled anyone outside the company, even D.U., they'd have known better.

I'm good friends with some hard Lefties (inlcuding some avowed Socialists who view Bernie Sanders as a corporatist sellout), all of whom pay for multiple subscription services and are news junkies. And to a man, their unanimous reaction to the announcement of CNN+ was incredulity and derision.

Apparently the hacks at CNN believed their own assertions of being a "prestige" and "elite" brand and assumed that since they viewed themselves as worth investing in, so would consumers. The same delusion as many spectacularly failed business ventures, I guess- an overabundance of confidence and ego.

[SamAdams76]

His team had just gotten its first look at data from CNN+, the much-promoted subscription streaming service started two weeks before, and the news was grim. Fewer than 10,000 viewers were watching at any given time, despite a multimillion dollar ad campaign and big hires like Chris Wallace. They were recommending a cold-eyed review.

This cracks me up. They declared Truth Social "dead on arrival" and yet it took them two months to scale to one million users. (They have added 350,000 more in the past three days alone). By comparison, Twitter took two years to get to a million users.

Would have taken CNN+ about a half century to scale to a million.

[Montana_Sam]

The new-born Christian in me wishes no one ill.
The pagan remnant is a different colored horse. It is laughing my fat, white caboose off.
Mea culpa, mea culpa, ...

[irv]

“I’ll bet the 10,000 viewers were college Snowflakes who watch shows like SNL and all the late night talk shows. “

No. Doctor’s offices, bus stations and the like where they put it on and leave it. Few, if any, actual humans were watching.

[catnipman]

“Zaslav and his team had experienced bad luck with single-topic streaming services”

indeed, if they had just had a bit of good luck, or maybe even just neutral luck, all would have been well!

[chaosagent]

I understand they had only 10,000 paying subscribers. The rest were watching gratis.

From the article:
Morse said that CNN+ had secured 150,000 paying subscribers in its first two weeks and was on target to hit its first-year goals.

[Blennos]

Who knows what the truth is.

According to Axios, around 15,000 people subscribed to CNN plus at a rate of $5.99 per month or $59.99 per year.

https://www.hitc.com/en-gb/2022/04/22/what-happened-to-cnn-plus/

The good news is that they are gone!