CNN+ streaming service to shut down weeks after its start

NEW YORK (NYTIMES) - In a shock move, Warner Bros Discovery (WBD) said on Thursday (April 21) that it will shut down CNN+, its streaming service launched just three weeks ago, raising fresh questions about the growth of online video services.

"While today's decision is incredibly difficult, it is the right one for the long-term success of CNN," Mr Chris Licht, the network's incoming president, told staff.

The shutdown on April 30 is an ignominious end to an operation into which CNN sank tens of millions of dollars - from a nationwide marketing campaign to hundreds of newly hired employees to big contracts for name-brand anchors, including former Fox News host Chris Wallace.

It collapsed just two days after Netflix reported a quarterly decline in subscriptions for the first time in a decade, a potential warning sign for major media companies joining the increasingly crowded field of streaming services.

The abrupt demise of CNN+, as well as Netflix's projection that it will lose two million more subscribers over the next three months, has raised questions about how many people are willing to pay for numerous streaming services, as well as how profitable these businesses can become in the next few years.

CNN+ was the brainchild of CNN's former corporate parent, WarnerMedia, and its former president Jeff Zucker, who had envisioned a versatile digital product with big-name hosts who could buttress the network amid a decline in traditional cable viewership.

But the service had a powerful sceptic: Discovery chief executive David Zaslav, who was on the verge of completing a merger with WarnerMedia that would put him in control of the news network.

Executives at Discovery, wary of antitrust rules, were constrained from advising their counterparts at CNN until the merger was done. CNN+ had lost its champion when Mr Zucker left in February because of an undisclosed romantic relationship with a colleague. But WarnerMedia CEO Jason Kilar forged ahead anyway, launching the streaming platform on March 29 to the frustration of the Discovery leadership.

It quickly became apparent that Mr Zaslav had a very different view on digital strategy.

On the morning of April 11, the first business day of Discovery's ownership - and 90 minutes before its WBD stock even went live on Nasdaq - Mr J.B. Perrette, Discovery's global head of streaming, convened a meeting with CNN executives.

Mr Perrette had a message: marketing of CNN+ was to be suspended, pending a formal review of the business, three people familiar with the conversation said.

Executives at WBD wanted to merge its other subscription platforms - Discovery+ and HBO Max - into one giant streaming service. They were not convinced that a niche product such as CNN+ could be viable on its own.

Then, there was the matter of the debt. Discovery's merger left the conglomerate owing about US$55 billion (S$75 billion), which executives are now under pressure to repay. CNN had been planning to spend more than US$1 billion on CNN+ over four years, two people familiar with the matter said, even renting out an additional floor of its pricey Manhattan skyscraper.

Mr Andrew Morse, CNN's chief digital officer and a key architect of CNN+, who became the biggest internal champion of the service, countered that subscription-based online news could be successful, citing The New York Times as an example. Executives at CNN+ said they had secured 150,000 paying subscribers and were on a pace to hit first-year subscription goals.

Executives at Discovery were not impressed: At any given time, fewer than 10,000 people were watching the service, said two people familiar with the numbers, who were not authorised to speak publicly. On Thursday, Mr Morse said he was leaving the network entirely.

The fate of CNN+ programmes - and the future of the anchors it poached from rival networks - remains unclear. Several titles are expected to be moved to HBO Max, Discovery+ or CNN.com, two people familiar with the discussions said.

Ms Kasie Hunt, who left a role at MSNBC to host a CNN+ show, wrote on Twitter that she was taking the announcement in her stride. "The news is the news is the news is the news no matter how or where it airs or comes from," she wrote. "Will keep at it tomorrow."

Professor Scott Galloway, also a financial journalist, who was planning to host a show on business and technology, posted a tweet with a blunter take.

"Well, that was fast," he said.