CNN+ went down to become one of the largest streaming service failures in modern history. What went wrong behind the scenes?
CNN+ might go down in history as one of the shortest lived streaming services, if not products, to ever grace consumers around the world. The streaming service, which only lasted a month, was meant to accelerate the cable news company into the digital age. A unique proposition built on original programming, from series to talk shows, would make for a strong enough selling point to attract millions of subscribers in its first five years.
Changes in media consumption
In order to better understand why CNN was so eager to launch its own streaming service, we have to frame the market dynamics that acted as the fuel for CNN+. An August 2017 Pew Research Survey revealed that young adults in the United States had different media habits than their older counterparts. Younger Americans, aged between 18 and 29, preferred watching television through online streaming, a departure from older generations who still used cable and satellite.
Pew Research noted that the rapid growth of streaming services such as Netflix and HBO drastically changed media consumption across the country. The survey found that 61 percent of young adults, aged between 19 and 29, watched television through online streaming services on the internet. A smaller cohort, 31 percent, mostly watches television through cable or satellite subscription and only 5 percent uses digital antenna as their means to consume media. These findings are a stark result when compared to the cohort aged 50 to 64.
This older cohort, relies heavily on cable and satellite for their media consumption, with 70 percent relying on this medium. A minority of 10 percent watches television through an online streaming service. Surprisingly enough, digital antennas represent 15 percent of all responses. Whether this is due to geographical location or channel offering, is left unanswered by the researchers.
Over the entire population, women indicated that cable subscription was their primary way of watching television, with 63 percent versus 55 percent respectively. Men in turn were more likely to use online streaming, with 31 percent of men compared to 25 percent of women, who prevent this channel. Digital antenna usage was prevalent amongst households earning less than $30,000. The Pew Research Center finds the internet and apps have altered access and consumption of media and content in recent years.
Cord cutting
We could see the rise of internet-based media services have an immediate effect on the amount of cable and satellite subscribers in the years that followed. A Pew Research Survey conducted among 1,502 U.S adults between January and February 2021, revealed that the share of Americans that watched television through either cable or satellite had fallen from 76 percent in 2015 to 56 percent in 2021.
The ease of access online was the primary driver that resulted in cable and satellite media consumption falling dramatically in just a few years. The share of U.S. adults who said they didn’t receive television at home through cable or satellite had increased from 24 percent in 2015 to 44 percent in 2021. A majority (61 percent) of those who didn’t receive television through cable or satellite had a subscription in the past.
Declining newspaper subscribers
Traditional news outlets have seen sharp declines in viewer and readership since their Renaissance between the 1960 and 1980s. The current media landscape has dramatically altered how the industry operates, including its business models. This monumental shift can be immediately seen in the daily newspaper circulation, which has been in strong decline since the 1980s. In 1940, Weekday newspapers saw circulation of 41.1 million and Sunday issues 32.4 million.
These figures fell dramatically 80 years later. In 2021, Weekday circulation was estimated to dip to 20.9 million, with a similar drop seen in Sunday issues. Pew Research found that out of the 136 newspapers with Weekday circulation, 120 experienced a decline over the course of 2022. Newspapers who have invested in their digital channels, such as The New York Times, The Wall Street Journal and The Washington Post, have seen growth in online traffic. Their loss in subscriptions were compensated through exponential growth across their digital alternatives.
The New York Times, the research center notes, has seen a 32 percent increase in its digital subscriptions in 2022, surpassing 10 million subscribers. However, the NY Times growth isn’t representative of the entire industry. Across the board, digital traffic declined for the U.S.’ top 50 newspaper websites. Pew Research cites Comscore data, who observed a traffic drop of 20 percent. We might argue whether a drop in traffic is problematic when digital subscriptions overall have increased, which for the companies themselves might be more profitable.
Local news under pressure
The digitization of media consumption has had its ripple effects on local news broadcasters, who have to adjust to a new media reality. A January 2024 Pew Research Survey showed that a growing number of U.S. adults were consuming local news through websites and social media, with a small increase in radio. Newspapers meanwhile took a backseat. The ease of access results in consumers of local news paying less attention to local news.
When looking at preferred channels, local news consumption through television had dropped from 41 percent in 2018 to 32 percent in 2024. News websites and social media saw their share grow substantially, coming from 37 percent to 48 percent over the same period. The number of U.S. adults indicating that print newspapers were their preferred channel for local news had fallen from an already modest 13 percent in 2018 to 9 percent in 2024.
While the number of U.S. adults that paid close attention to local news had dropped, the research authority found, Americans still valued local news outlets and their journalists, with 12 percent stating that local news was extremely important to their community. This figure was followed by 32 percent of U.S. adults indicating that local news is very important. Despite these seemingly positive results, the willingness to pay for local news remains low.
The research center found that a minority of Americans (15 percent) had paid for local news in the last year. The low willingness to pay can be traced back to a majority of respondents (63 percent) believing that local news outlets are financially stable. This is contrary to the reality that many news outlets face under news democratization.
CNN might not have a newspaper, but the trends witnessed across local news and newspapers show a dramatic shift toward digital media consumption. Furthermore only a handful of news outlets have been able to compensate for the loss in subscribers through digital subscriptions, however the majority have trouble keeping subscribers, frantically looking for ways to turn a profit. These changing market dynamics got alarm bells ringing at CNN headquarters.
CNN+ unveiled
CNN went to work to create its answer to a changing media landscape. In July 2021, CNN announced its streaming service CNN+, set to launch in 2022. The cable news channel set out to hire hundreds of people to build a streaming service that could exist alongside its regular programming, bringing dozens of new programs to its subscribers. In the announcement, Chairman of WarnerMedia News and Sports and president of CNN Worldwide, Jeff Zucker, said its entry into the streaming market was the next big evolution since its invention of cable news back in 1980.
Now CNN was ready to redefine news once more as consumer demands change, the news outlet noted. Zucker commented that its television offering was stronger than ever, remaining at the heart of the company, but with its new streaming service, it would expand on its offering and extend the CNN brand. A unique product without any rival. Chief digital officer at CNN, Andrew Morse, said the announcement of CNN+ was the most important launch since Ted Turner launched the network back in 1980.
Elaborating that CNN+ would be built on three pillars, being eight to twelve hours of live programming, original series exclusive to CNN+ and archival content. Morse added an interactive community aspect would also be present, allowing for subscribers to directly interact with the network’s experts and talent about relevant topics. The months leading up to release, CNN’s representatives went on an extensive PR-campaign.
The CNN+ sales pitch
In March 2022, Deadline spoke with Executive VP and Chief Digital Officer of CNN+, Andrew Morse, about the yet unclear, but hidden potential of the broadcaster’s streaming service. Deadline opened by stating that rivals had already tried to nudge themselves into the streaming service space, who have to create a strong enough offering to lure in new subscribers who are already evaluating which service is worth their money.
CNN+ believed there was still room for one more service. Morse commented that CNN+ was not aiming to become yet another streaming service. Adding that CNN was creating an essential news subscription service. Unique among all existing options out there. Morse noted that the company had formulated an ambitious subscriber target. He didn’t elaborate on the figure itself, Deadline added, yet the figure was deemed achievable by executives at the company.
CNN would be able to enjoy the momentum of HBO Max, as the service could become available as a bundle with the rapidly growing streaming service, Morse added. Deadline highlighted that CNN+ would come with its own dedicated programming, with shows hosted by Brian Stelter, Chris Wallace and Wolf Blizter. Well-known personalities at the network that were lined up to attract fans. Original series such as The Murdochs: Empire of Influence would add the necessary variety to cater to different audiences.
Alongside fixed programming, live reporting would see distinct news anchors, with distinct reporting, Morse added. The company would tap into its global network, which could give the service an edge over rivaling news broadcasters. The reporting would be fresh and on top of all the latest breaking news stories, Morse highlighted. CNN+ was unlike anything currently available on cable, he elaborated.
Morse acted like an extension of CNN marketing apparatus. And for good reason. The company had allegedly poured $100 million into the development of CNN+, with around 500 employees working on the service. The stakes were high for the news broadcaster and those in charge of making it a success. Despite all its efforts and Morse sales pitch, upon CNN+’s launch turned out to be disastrous.
CNN+ disaster
On the 12th of April 2022, sources told CNBC that the streaming service only attracted 10,000 subscribers two weeks into its launch. CNBC noted that CNN was looking to rapidly gain momentum, however, despite all the fanfare, there was wide skepticism surrounding the service, especially when placed against Disney+, who despite its sluggish performance several years in, was able to amass 10 million subscribers on launch day. CNN refrained from publishing any subscriber numbers, undoubtedly due to its lackluster release.
Axios reported that CNN was aiming to attract 2 million subscribers during the first year in the United States, and amass between 15 to 18 million after four years. The launch however put the goal, which was formulated with McKinsey, further away than ever. Reaching at least 15 million subscribers would allow the service to turn break-even, with executives betting on overseas audiences to accelerate growth. Now, the company had to drastically adjust course.
Hiring of new staff had been frozen by parent company WarnerMedia, which would directly impact CNN’s ability to develop the platform and add more content that could attract new subscribers. A source told Axios that CNN had pushed for a quick release to set the company up for a future merger. Meanwhile, Axios questioned whether Morse’s position would come under threat now that it has been made abundantly clear that the service wasn’t reaching its promised potential.
Turmoil at CNN
There were two pivotal moments for the CNN+ project, which would eventually spell its definitive demise. The first domino piece was the announcement of the acquisition of WarnerMedia, which was home to CNN, HBO and Warner Bros. by Discovery in May 2021. The timing was shortly after the unveiling of CNN’s streaming service, which would’ve sent shockwaves of uncertainty among CNN employees. The transaction, a combination of cash and debt securities worth an upward of $43 billion, would lead to one of the largest global streaming players.
Bundling assets such as Discovery, Cartoon Network, HBO, CNN, Eurosport among others. In the press release, AT&T could further strengthen its product appeal through Warner Media’s intellectual properties, spanning entertainment, animation, sports and news. Combined with Discovery’s unscripted productions, the media conglomerate would be able to deliver a wide range of shows to different audiences.
The decision made by CNN executives to keep pushing for a release of its own streaming service makes it therefore more peculiar. As, even without additional knowledge about future operations, one could’ve seen the writing on the wall that future management would be reluctant to add yet another streaming service to its portfolio. This frustration would be expressed by new leadership during the eventual shut down.
The second warning sign for the service’s imminent failure however could already be spotted back in February 2022, when CNN Worldwide president, Jeff Zucker, announced his resignation. Zucker’s leave symbolized the internal turmoil at CNN. The Hollywood Reporter noted that the ad hoc resignation put the future of the upcoming streaming service, which was just weeks away, in jeopardy. Uncertainty was fueled further by the acquisition of WarnerMedia by Discovery, which was awaiting clearance from U.S. regulators.
Now, those working at the news broadcaster were left in doubt about the streaming service’s future. The business model for CNN+ was questioned by many, The Hollywood Reporter explained, as the programming was heavily influenced by Zucker. He, and other executives were aiming for a unique, unproven, strategy. A strategy which was a departure from WarnerMedia’s general strategy to build and expand HBO Max. We know that at launch, Morse said a bundle was on the company’s roadmap.
However, with Zucker’s departure, the revenue opportunities had become even more hazy. Furthermore, its potential new owner could look very differently at CNN+ within its product portfolio. Under a Warner Bros. Discovery umbrella, it would seem highly unlikely executives would want to maintain and promote three separate streaming services. A stronger, unified offering would be better to gain momentum in the ever more competitive streaming on-demand market.
Zucker’s strategic vision
On the surface one might argue that Zucker was but a mere executive pion, who could easily be replaced. But, he was essential for CNN’s turnaround, catapulting the network to become the second most-watched cable news channel, surpassing MSNBC and having its sights set on Fox News to claim the first spot. In August 2016, Variety made a special report on Zucker’s strategic vision for the news channel, as he became president for CNN Worldwide in 2013.
Zucker worked at NBCUniversal, where, in 2010, he lost his position after the Comcast acquisition. This brought him to ABC’s daytime talk show “Katie”, with Variety labeling a press magnet. Before Zucker joined, CNN had become a dull network that couldn’t deliver the spark to give an edge over its competitors. Zucker commented the network felt like a spare tire in your car’s trunk and only taken out when strictly needed. Outside an emergency, CNN saw little action.
Now, Variety observed, the TV news channel was feeling digital news encroaching on its territory. Zucker had to turn around the morale at a company who deemed itself a relic of the past, with little means to turn the tables. Zucker took a brave stance, saying that outlets like Buzzfeed and Vice weren’t legitimate news channels, but merely native advertising shops. In hindsight, Zucker was right, as both Buzzfeed and Vice became relics of the Internet’s past. Zucker had a bold vision for CNN, drafting a blueprint to rejuvenate the network, Variety noted.
The company’s digital capabilities would be expanded and strengthened, seeing an investment of $20 million to develop new technologies and attract reports. We can already see the counters for CNN+, as Zucker strongly believed the company had to push into the digital space. The vision for CNN+ would be further reinforced with Zucker pushing for more original series and documentaries that would fill the gaps when news was slow. Furthermore, reporters were stimulated to stick longer to a story, instead of running from one news flash to the other.
Shutting down CNN+
In April 2022, new management at Warner Brothers Discovery, decided CNN+ would be shut down by April 30th 2022. A month after its launch. Head of streaming at Discovery, J.B. Perrette explained that within the complex streaming market, consumers were looking for simplicity over stand-alone offerings. Service providers, meanwhile, would benefit from upholding less products, unlocking more investment capabilities. The cut could potentially mean hundreds of staff losing their jobs.
The announcement left many employees in utter shock, one CNN+ staffer explained. Employees were freaking out, followed by feelings of sadness. Perrette expressed frustration with prior leadership at CNN under Jeff Zucker and executives at WarnerMedia, who, whilst informed about the merger, kept pushing the streaming service. Meanwhile, Warner Bros. Discovery would increase its debt load, forcing business leaders to cut costs wherever possible.
In December 2022, Warner Brothers Discovery CEO David Zaslav spoke with CNBC about the sudden shutdown of CNN+. Zaslav explained that the owners of the company decide which products would be discontinued, noting that executives have nonetheless been laser focused on CNN, which was deemed a critical asset. The network was considered to be the benchmark in global news gathering, serving an advocacy role. Emphasizing that CNN has capable journalists to deliver strong reporting.
CNN would remain dedicated to delivering factual reporting on its channel, with journalism first as its core principal. However, Zaslav pointed out, this mechanic was absent in CNN+. Adding that there was no message, solely a business decision. The product lacked the subscriber numbers despite massive investments by the team to sell the service. The data showed there was no viable business model.
When asked whether the shutting down of CNN+ was meant to deliver a message about upcoming changes at the network, Zaslav responded that wasn’t the case. In the case CNN+ had a strong business model, the service would have remained operational. Adding that the company had tried independent networks in Europe, learning that bundling services made for a stronger competitive product. Zaslav didn’t elaborate what this product might look like, but the company was exploring avenues to create an umbrella service.
Pivotal mistakes
The decision to push for a CNN streaming service isn’t all too surprising when placed in the broader context the network was operating in. Traditional media such as newspapers and television saw drops in viewership, whilst streaming services were seeing exponential growth. CNN’s executives were also fueled by prior success under Zucker’s leadership, who formulated a new strategy that turned around the ailing network into a vibrant news channel.
However, the streaming market was becoming heavily saturated as CNN was drafting its plans for CNN+. The business case was questionable, with media outlets wondering what the network could add to existing options within the market. Furthermore CNN had to develop expensive new programming to justify its price. Factor in the merger, which should’ve forced the product on hold, didn’t dissuade executives from pushing along.
