What happened to CNN+? Service dropped shortly after debut

Media

(NewsNation) —The door is being shut on CNN’s paid streaming service CNN+ almost as quickly as it opened.

CNN announced this week the service will end April 30, just weeks after it debuted.

After being pumped with $300 million in funding, the demise of CNN+ is drawing harsh criticism from those who say the idea was a demonstration in arrogance, rather than practicality by CNN.

“Since my mother is watching, I will acknowledge that rejoicing in other’s failures is perhaps ungentlemanly, so let us be clear, our issue is pointing out the arrogance of those executives who believed in CNN+,” said Leland Vittert, host of NewsNation’s “On Balance,” on Thursday. “They actually thought there was a market for Jake Tapper’s book club; they wanted people to pay for this.”

NewsNation’s Dan Abrams, host of “Dan Abrams Live,” has been a critic of the idea for CNN+ since its inception. Like Vittert, he empathized with the journalists and crew who may lose their jobs because of the ill-fated idea.

“While I predicted that CNN+ would go the way of the Betamax and Microsoft Zune, at this point I am not going to stomp on the grave … a lot of people left good jobs to go there and hundreds may lose their jobs,” Abrams said.

Abrams was particularly critical of former WarnerBros. CEO Jason Kilar, who said April 5 that CNN+ was performing ahead of his expectations and painted the streaming service as a success.

CNN+ was priced at $5.99/month and expected it would break even after four years in existence. CNN expected it would bring in 2 million subscribers in it’s first year and would grow exponentially to 15-18 million subscribers.

“That turned out to be a completely ridiculous prediction,” Abrams said. “Was it group think? What made them believe that the brand was that popular?”

Abrams said this will be remembered as one of the “great failures” in media.

Frank Sesno, a former Washington bureau chief for CNN and now the director of strategic initiatives at George Washington University, said on “Dan Abrams Live” this was a “colossal miscalculation” by CNN.

“A colossal, gigantic case of hubris thinking this was going to be the next revolution in news,” Sesno said.

Sesno pointed out that CNN was a leader in revolutionizing news for cable television and the internet but argued it widely missed the mark with CNN+.

“On so many different levels, it just seemed tone deaf,” Sesno said. “It is one of the great case studies in business school in how to mismanage a brand and launch a new product.”

Lauding CNN for its coverage of the Ukraine war, calling it “heroic,” Sesno argued CNN needs to get back to it’s roots: journalism.

“They introduced a new product and all it did was confuse the audience and it was rejected by the audience,” Sesno said.

CNN+ was conceived before CNN was taken over by WarnerBros. Discovery, a media mega-giant. The new leaders of Warner Bros. Discovery quickly let it be known they considered CNN+ an ill-conceived idea, according to the Associated Press.

In a memo to employees Thursday, incoming CNN Chief Executive Chris Licht said consumers wanted “simplicity and an all-in service” rather than stand-alone offerings. Discovery had previously suggested that it wanted to merge the new company’s separate streaming services, which include Discovery+ and HBO Max, into a single app.

In a Thursday town hall, executives also said that the service’s inability to show live breaking news was a crucial failing. Because of contracts with cable and satellite companies, CNN+ could not stream the CNN television network.

“It’s a little bit like The New York Times subscription without The New York Times,” said J.B. Perrette, head of Discovery’s streaming services.

Perrette said Discovery had learned from trying to launch its own news service in Poland, and in seeing the experiences of other paid streaming services in the United States such as Fox Nation, that CNN+ could not expect to get near one million subscribers. Unlike CNN+, which was charging customers $5.99 a month, broadcast networks like ABC, CBS and NBC offer free news-streaming services.

“Those are the facts,” Perrette said. “We’ve learned from painful history, financially costly history.”

If the company is going to go in a different direction than CNN+, “we can’t let it go on one second more than it needs to,” he said.

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