Big cuts coming for CNN+ after slow start
Investment and projections for CNN+ are expected to be cut dramatically in response to a low adoption rate, two sources tell Axios.
By the numbers: The news giant was initially planning to invest around $1 billion in the service over the next four years.
- Hundreds of millions of dollars are expected to be cut from that original investment total.
- To date, around $300 million has been spent on the subscription service, which includes a sizable marketing investment.
- The new company's leadership team still has yet to decide the ultimate fate of CNN+. CNN's new boss, Chris Licht, will start May 1.
Details: CNN executives, with help from consulting firm McKinsey, originally expected to bring in around 2 million subscribers in the U.S. in the service's first year and 15-18 million after four years.
- They originally planned for the service to break even after four years.
- Much of the subscriber opportunity executives see comes from international markets.
- Sources say those subscriber expectations will need to be dramatically reduced if investment is cut.
Yes, but: In the U.S. yesterday, CNN launched on Roku, one of the largest smart TV companies in the country — which should help boost subscriber numbers.
Between the lines: Hiring has been frozen at WarnerMedia for the past six weeks, and this has been felt at CNN.
- One top executive notes that there is a sense of confusion internally as to why CNN didn’t push back the launch of CNN+ until after the Discovery merger.
- The launch felt rushed in order to stake a claim over the service and the network's future ahead of the merger, the source said.
What's next: It's unclear whether top CNN+ executives, like CNN+ boss Andrew Morse, will continue to stay with the company if resources for the service are dramatically reduced or cut.