CNN+ was always doomed

RIP CNN+

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.

Shutting down CNN+ leaves cable without an offramp. 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.

After just four weeks, it’s possible Warner Bros. Discovery cut the cord too early, but incoming CNN CEO Chris Licht wrote in an email breaking the CNN+ news to staffers that the streaming service was just not what people want today. "In a complex streaming market, consumers want simplicity and an all-in service, which provides a better experience and more value than stand-alone offerings," Licht wrote. In other words: Warner Bros. Discovery is all in on HBO Max — and not ready to start figuring out what CNN’s post-cable future will look like.

— Janko Roettgers (twitter)

For more stories like this, sign up for Protocol's Entertainment newsletter.

A MESSAGE FROM RINGCENTRAL

The speed at which security has been built up over the last 12 months has been a derivative benefit of what we’ve seen during the pandemic. Privacy, compliance and security are three legs of the same stool. What we’re seeing increasingly is that intersection continuing to happen. RingCentral has invested in all those elements.

Learn more

People are talking

Amy Klobuchar and others want Meta to tackle Russian propaganda in Spanish:

• "Facebook has continuously failed to show it is adequately addressing this problem for Spanish-speaking communities.”

Barack Obama called for Section 230 reform:

• "Tech companies have changed dramatically … we need to consider reforms to Section 230 to account for those changes."

Making moves

Amazon bought GlowRoad, an Indian startup that sells goods at wholesale prices then helps customers resell them on WhatsApp and Facebook, for an undisclosed amount.

a16z created a crypto research lab staffed with research scientists, university professors and students.

Lulu Cheng Meservey and Kerry Carr will join Activision Blizzard’s board, sources told Axios. Meservey is a Substack exec, and Carr comes from Bacardi.

Fahim Siddiqui will oversee tech strategy at Home Depot as CIO, and current CIO Matt Carey is now the EVP of customer experience.

Marta Hall left Velodyne’s board. Marta and David Hall had just sold over two-thirds of their stake in the company.

In other news

Meta is investigating Sheryl Sandberg over her attempts to stop a U.K. newspaper from reporting a negative story about Bobby Kotick, who she previously dated.

Elon Musk got the money to buy Twitter. A group of lenders led by Morgan Stanley have committed to providing the $46.5 billion needed to take Twitter private, according to an SEC filing.

HBO had a pretty good quarter. Three million more subscribers joined HBO and HBO Max compared to the previous quarter.

Mark Zuckerberg isn’t allowed into Russia, along with Kamala Harris and several other U.S. officials.

Twitter is leaning on third-party tools to block harmful content through an experiment that will highlight apps like Block Party and Moderate.

SpaceX is one step closer to offering WiFi on planes. It signed a deal with air carrier JSX to provide in-flight WiFi using Starlink satellites.

Spotify is getting into video podcasts. It had played around with it for some time, but it’s now open for creators to use in a few countries.

Are you the asshole?

AI isn’t good for everything, but it can help with an ethical gut check. Internet artists Morris Kolman and Alex Petros created an advice tool to help with that.

Are You The Asshole is an AI-text-generation model trained on posts from the Reddit channel Am I The Asshole?, where strangers vent about arguments and debate who was in the wrong.

But instead of strangers debating whether you were, in fact, the asshole, the AI will tell you whether you are the asshole, aren’t the asshole or if it's a tossup. We asked whether we’re an asshole for not recycling. The response sounded more human than we could’ve imagined:

"YTA. what's wrong with you dude? I get that you don't want to pay for trash pickup, but just because it's free doesn't mean trash is free. If you're not going to use something then put it in the recycle bin and set a reminder on your phone to make sure you actually do it or at least have someone check up on you."

A MESSAGE FROM RINGCENTRAL

At RingCentral, we’re focused on making hybrid work simpler for organizations so they can best set up, run and manage their business. We’re asking ourselves what's the benefit that we can derive, or that we can enable, that is better than the best-in-class in the industry?

Learn more