Warner Bros. Discovery (WBD) has suspended all its external marketing spend on CNN+, as well as laid off CNN CFO Brad Ferrer. Neil Chugani, Discovery’s current CFO for streaming and international, will replace Ferrer, as WBD deliberates the streaming service’s prospects.
CNN+ initially launched on March 29, approximately two weeks before WarnerMedia and Discovery finalized their merger on April 8. CNN anticipated around two million U.S. subscribers would sign up in the service’s first year, Axios reported, with CNN having spent $300 million to date building up the platform.
Yet fewer than 10,000 daily viewers are using CNN+, a far lower number compared to CNN’s cable viewership average of 773,000 viewers a day, CNBC reported. CNN+’s subscriber count is approximately 150,000, according to Axios.
The halt on CNN+’s advertising spending indicates WBD is trying to mitigate potential losses, Interpret Vice President Brett Sappington told Fierce Video. He predicts WBD will either shift CNN+ promotion to existing CNN viewers or offer the service as part of a bundle on a bigger platform. WBD is already working on releasing an HBO Max/Discovery+ bundle.
David Zaslav, CEO of WBD, said at a town hall last week his goal for CNN “isn't going to be to maximize profitability. It's going to be to maximize impact." Zaslav also emphasized CNN’s recent coverage of the Ukraine war, which may indicate WBD wants to shift CNN+ towards hard news, focusing less on perspective programming, Axios noted.
Sappington added such a move would reduce WBD’s cost of running CNN+, as live news costs less to produce than scripted content.
“With scripted content, not only do you have to create it but there’s a certain amount of production quality necessary,” he said. “While live news can be just as challenging to produce, it’s not as expensive.”
Chris Licht is set to become CNN’s new chair and CEO beginning in May, meaning the company has yet to decide what’s in store for CNN+. Sappington thinks subscription news services like CNN+ need to provide an incremental value to incentivize new and existing consumers.
“In the news game, it’s all about providing as much coverage as possible as quickly as possible, staying ahead of all the other news sources that are out there,” he said.