CNN+ may be warning sign for streamed news
CNN’s new streaming service CNN+ is off to a slower start than executives at the network had hoped, raising new questions about the future of the paid, subscription-based vertical — and more broadly how much consumers are willing to invest in streamed news.
The launch of CNN+ is just the latest push by a major cable provider into streaming, as industry insiders and network leaders prepare themselves for a future increasingly characterized by cable cord-cutting.
CNN has played down reports of a stumbling start to its multimillion-dollar investment in streaming, saying it is pleased with how the launch has gone and dismissing early reports suggesting the new venture is in trouble as premature.
“After only three weeks of being available to customers, CNN+ is one of the top news subscription services on the market,” a spokesperson for the network told The Hill this week. “We remain very happy with CNN+’s performance to date and are proud of what our teams have built.”
But Axios on Tuesday reported that all plans for external marketing spending for CNN+ had been halted by the newly formed WarnerMedia Discovery conglomerate, after it had only obtained more than 150,000 subscribers. Its goal is to have 2 million subscribers within its first year.
The network had planned to spend a reported $300 million on launching the service, including a sizable marketing investment that features commercials on cable plugging top talent it has poached from rival networks like Fox News and NBC in recent months.
TimeWarner’s sale to Discovery certainly complicated the launching of CNN+, as did the ousting of Jeff Zucker as CNN president due to a personal conduct scandal just months before the streaming service came online.
More broadly, CNN’s stumbles could give pause to other news organizations as they decide where to allocate resource.
“When you’re in the cable news business already, differentiating what the streaming customer is going to get for paying that extra money for streaming is important,” said Mark Lukasiewicz, a former network executive and now dean of the Lawrence Herbert School of Communication at Hofstra University. “I’m not sure anybody has demonstrated in the news space what that is.”
CNN promoted its new service by making splashy hires like anchors Chris Wallace from Fox and Kasie Hunt from NBC. It rewarded some of its more well-known and long-standing hosts on cable like Don Lemon, Wolf Blitzer and Brian Stelter with daily or weekly shows.
The network has supplemented its news programs on streaming with feature and lifestyle series and programs featuring hosts like Rex Chapman and Eva Longoria.
Yet some of the early reviews of the content on CNN+ have been mixed at best, with an early criticism in New York Magazine’s “Vulture” section crowing in a headline “CNN+ Has Quibi Vibes,” — a reference to the infamous and short-lived video news streaming service that started during the pandemic but failed due to lack of subscribers.
“While it’s clear CNN’s leaders have pressed pause on CNN+ I think it’s too early, by a long shot, to call CNN+ another Quibi,” Lukasiewicz said. “Undoubtedly the rollout for CNN+ has been bumpy … the content itself is ultimately what matters and the business model around the content.”
Rick Sanchez, a former CNN anchor fired in 2010 who has since launched a podcast company for English-speaking Latino Americans, said in order for CNN’s streaming service to be successful, network leaders need to rethink the network’s brand and mission.
“What streaming viewers and the future consumers of news want is great content that is relatable to them,” Sanchez said. “Not ‘Oh we got this person from another network and they’re going to be a CNN person now, isn’t that cool?”
Other networks have gone about their strategy for streaming in different ways. NBC does not charge for its streaming service, NBC News Now.
“The streaming audience at this moment tends to be a younger audience. The average age tends to be in their early 40s. They tend to, right now, watch on television-like devices if not an actual TV,” said Noah Oppenheim, president of NBC News, during a recent discussion with the Poynter Institute.
“Our thesis with NBC News Now is that as people cut the cord, as people look for news and information not on linear or cable television but in other places, they’re not signaling that they don’t want news. They just want it in a different place and a different way,” he added.
Fox News Media, one of the first networks to launch into the streaming realm, does charge for its service and has relied in recent months on a slate of series hosted by top talent to grow the platform.
Lachlan Murdoch, CEO of Fox Corp, said during an earnings call last fall the total subscriber count for Fox Nation was up nearly 25 percent compared to the previous quarter. Fox has repeatedly declined to publicize its subscription numbers for its streaming service.
“It sure seems like overall paying for streaming news is a tough sell for the consumer,” said Mike Smith, professor of information technology and marketing at Carnegie Mellon University. “This is a classic case of disruptive change in an industry in the sense that you’ve got an organization that has been operating with a certain set of processes and business models and it can be really hard to change those processes to do what they need to do in the news business.”
Rachel Adler, a television agent at agency CAA, told Variety following the last presidential election that she’s seen a trend of more media outlets attempting to base content on new platforms less on news of the day and more on expertise of individual journalists.
“They have a captive audience and want to ensure they’ve created some loyalty that’s not just built on the chaos of the news cycle but on the network’s talent and programming,” Adler said.
The circumstances surrounding CNN’s foray into streaming this spring, Lukasiewicz noted, “is pretty unique.”
“You have a change of ownership that occurred in the eleventh hour of planning for CNN+ and a dramatic and pretty messy change of leadership,” he said. “If I ask you what first comes to mind when you think CNN? The answer is breaking news … a lot of it (CNN+) falls into the ‘extra’ genre. So you have to wonder if that doesn’t lead to some confusion in the audience about what they’re getting and why they need a CNN+.”
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