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The demise of CNN+ is bad news for cable

Protocol Entertainment

Hello, and welcome to Protocol Entertainment, your guide to the business of the gaming and media industries. This Friday, we’re exploring what the end of CNN+ means for cable TV networks and sharing suggestions for what to read, watch and play this weekend.

A post-cable future looks hazy

Yesterday’s announcement that CNN+ was shutting down a mere month after its launch didn’t come as much of a surprise: The damaging leak of the service’s low daily active users number — a highly unusual, cherry-picked data point — two weeks after its launch made it clear that the newly merged corporate parent Warner Bros. Discovery simply didn’t want CNN+ around.

With that in mind, you should take some of the CNN+ post-mortems you get to read now with a grain of salt. The service shuttered before it could prove itself, which makes any pondering about its chances with consumers a bit of a guessing game. Wesley Lowery and Julia Alexander do have some thoughts worth reading, but to me, there’s another elephant in the room that needs to be addressed.

Shutting down CNN+ leaves cable without an off-ramp. CNN+ was an ambitious effort to prepare one of cable TV’s crown jewels for a post-cable future. By killing the service this early, Warner Bros. Discovery is clouding that future for everyone.

  • From a short-term financial perspective, shuttering CNN+ does make sense for the media giant. WarnerMedia, as CNN’s corporate parent was called before parting ways with AT&T, spent a reported $300 million on building the service, with plans to invest another $750 million over the next couple of years.
  • CNN+ was able to sign up a reported 150,000 subscribers since its launch, with the goal of reaching 2 million paying subscribers within its first year.
  • That’s small when you compare it to the subscriber base of HBO Max (76.8 million, including legacy HBO subscribers), or the distribution footprint CNN has on cable (78.2 million households in the U.S. alone).
  • Still, the company’s previous leadership had big plans for CNN+, which included growing its audience to 15 million to 18 million subscribers over the next few years, according to Axios. Execs were also looking to launch a cheaper, ad-supported tier to further accelerate subscriber growth.
  • Now, executives want to move some CNN+ shows to HBO Max (think documentaries and anything else with a longer shelf life), while integrating others into CNN’s on-air programming.

CNN is a cable brand in a world that’s cutting the cord. Warner Bros. Discovery wants to double down on what’s working and get rid of costly experiments. But by doing so, it’s ignoring that the world around it is changing.

  • Cord cutting is steadily chipping away at cable’s audience. Major U.S. pay TV providers lost an estimated 4.7 million subscribers last year, according to LRG. That’s just slightly below the 4.9 million the same companies lost in 2020.
  • LRG estimates that the top TV providers now have around 76 million customers. In 2015, there were still 100 million pay TV households in the U.S.
  • TV networks have made up for some of those losses by increasing carriage fees, but that’s not a sustainable long-term strategy: The industry is approaching a tipping point, with S&P Kagan analysts telling investors in November that “traditional services are slipping toward the symbolic 50% mark.”
  • In other words: In the not-too distant future, the majority of U.S. households won’t have a traditional pay TV subscription anymore.
  • Programmers have responded to this trend by moving their best stuff to subscription services like Disney+, HBO Max and Hulu.

Moving beyond cable isn’t easy for everyone. The big subscription services want original entertainment programming, something that most cable channels have been lacking by design.

  • Reruns, daytime talk and news had their place in the cable bundle but aren’t compatible with today’s streaming services.
  • A few cable programmers have taken the hint and embraced free, ad-supported streaming channels to monetize their catalogs and find eyeballs beyond cable.
  • However, ads alone aren’t enough to pay for a lot of original programming.
  • CNN+ was an attempt to find another way to pay for news and documentaries that could have become a blueprint for others to follow.

Would it have worked? Thanks to Warner Bros. Discovery’s decision to turn off the spigot this early, we’ll never know.

— Janko Roettgers

A MESSAGE FROM PwC

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TGIF: How to spend your weekend

Norco — Steam. Everyone privy to the indie gaming scene has been raving about Norco, and for good reason. What looks on the surface like a simple throwback point-and-click adventure game is actually a fascinating Southern Gothic noir mystery, with beautiful pixel art and poignant critiques on the climate crisis, thoughtful meditations on religion and deep affection for the real-life Louisiana setting for which it’s named. Apt comparisons to Disco Elysium and Kentucky Route Zero go to show what kind of impact this game is likely to have for years to come. Norco is available on Steam for both Mac and Windows.

“Tokyo Vice” — HBO MAX. HBO’s adaptation of Jake Adelstein’s 2009 reporting memoir about covering crime in Japan’s capital city is one of the best procedural journalism stories in recent memory. It features Ansel Elgort as the Missouri-born expat maneuvering the often hostile and bureaucratic worlds he’s obsessed with understanding. The show deftly switches gears between an in-depth look at Japanese newspaper reporting and an exploration of the criminal underworld of Japan’s yakuza clans, with a great co-star performance from Ken Watanabe as Adelstein’s vice cop mentor.

“Klara and the Sun.” The latest novel from Nobel Prize-winning British author Kazuo Ishiguro is the best kind of literary sci-fi, doubling as both a heartfelt tale about the nature of human love and a grounded and realistic (albeit dystopian) take on the potential of artificial intelligence. Featuring Klara, an Artificial Friend bot tasked with overseeing a young and sickly girl of considerable means, the book explores a near-future where AI feels, reasons and navigates the world much like a child does, all the while trapped in a confounding life of subservience.

“Ranking of Kings” — Crunchyroll. Much like its lovable protagonist, this anime series comes off as unassuming at first glance, but it happens to be one of the best of the year. Mixing “Game of Thrones”-style political intrigue with a subversive take on classic Western fairy tales, “Ranking of Kings” somehow balances being as wholesome as a Disney movie while retaining the gruesome nature of the Brothers Grimm.

It stars Bojji, a deaf and mute son of two giants who was born with none of the strength of his parents. Yet the prince is nonetheless thrust into the role of hero and savior to his kingdom, all while plotting forces behind the scenes scheme for power. I can’t recommend this show enough, and its sense of humor and beautiful art style courtesy of “Attack on Titan” animator Wit Studio make it one of my favorite anime of the last few years.

— Nick Statt

A MESSAGE FROM PwC

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Thoughts, questions, tips? Send them to entertainment@protocol.com. Enjoy your day, see you Tuesday.

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