CNN+ "Interview Club"
Image: CNN+

CNN+ was always doomed

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Good morning! After weeks of speculation, CNN+ is officially done just a month after launching. (Even Quibi made it to month six.) The reason? No one wants to pay for a streaming service devoted to CNN. Of course, it’s a little more complicated than that. I’m Janko Roettgers, and I just bought a smart hose faucet timer (which is useful, when it works).

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)

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