After Zucker exit, CNN streams forward with a new service. What happens now?
The show must go on, even in streaming video.
Employees at CNN are keeping that adage in mind as they prepare to launch a new direct-to-consumer subscription streaming service, CNN+, later this month after one of the most tumultuous periods in the news organization’s history.
The hope is that CNN+ will serve as a gateway to a post-pay TV world, connecting the brand’s familiar red and white letters to a generation of viewers who are growing up without cable.
The company invested $120 million last year and hired 400 new employees, including notable on-air talent such as Chris Wallace, Kasie Hunt and former NPR star Audie Cornish, according to two people familiar with the plans (a CNN representative said it was under $100 million). CNN+ will likely cost several hundred million to operate this year,
But internal drama and corporate machinations have put a cloud over the endeavor. On Feb. 2, Jeff Zucker, CNN’s high-profile leader for the last nine years, was forced to resign after parent company WarnerMedia learned that he failed to disclose a romantic relationship with his longtime aide Allison Gollust, who was also chief marketing officer. Gollust has left the company as well.
Zucker and Gollust were deeply involved in the development of CNN+. Even before the scandal erupted, it was uncertain whether WarnerMedia’s new owners at Discovery, which is set to close its acquisition of WarnerMedia in April, would accept CNN’s existing plan.
Discovery Chief Executive David Zaslav has selected his successor to Zucker — veteran news producer Chris Licht — but has yet to delve into the operation. Zaslav is expected to have his first sit-down meeting at the network this week.
Andrew Morse, chief digital officer and head of CNN+, said in an interview that he’s encouraged his staff to persevere.
“I’ve had a lot of conversations with our talent and reassured them that we’re going forward,” he said. “It’s not what any of us expected, but things don’t always go to plan. My only message to them has been, ‘Keep going.’ CNN+ is so important to CNN that it’s bigger than any one of us.”
CNN+ is scheduled to launch during the last week in March. Initially, the service will be offered for $2.99 a month, a rate locked in for life as long as the account is active. When that deal expires, CNN+ will be available for $5.99 a month, the same price as the Fox News streaming service Fox Nation.
CNN also has plans to eventually offer a lower priced version of CNN+ that will be advertiser-supported. CNN+ will also be available in a package deal with HBO Max, just as Disney offers its flagship streaming service Disney+ with ESPN+ and Hulu.
Licht will take over the news organization in May after Discovery completes its acquisition of CNN parent WarnerMedia.
The service will have an entirely different program lineup than the cable channel, a costly but necessary strategy. More than half of CNN’s revenue comes from pay TV operators, and the network cannot run afoul of its carriage deals by cannibalizing its TV audience.
CNN+ will cover breaking news, but with a different team of correspondents and anchors than the cable channel. Morse said it’s achievable with an organization with 4,000 employees, including 75 journalists who are now on the ground in Ukraine to cover the Russian invasion of the country. Over the last week, CNN+ has been conducting rehearsals to get a sense of how its war coverage will look over the online service.
But getting consumers to pay for a separate news streaming channel will be a high hurdle, especially as some existing services such as NBCUniversal’s Peacock and Paramount+ include news as part of their offerings. The proliferation of streaming services is already testing the elasticity of household budgets, and not every entrant is going to survive.
While viewers are fleeing traditional TV, they are often watching the same content online for free. “NBC Nightly News With Lester Holt” pulls 1 million viewers a night on YouTube after it airs on NBC. Broadcast networks have also been aggressive in getting their news programming placed on free, ad-supported television services such as Paramount’s Pluto.
The news divisions of ABC, CBS and NBC have all chosen to make their own supported news channels free to consumers. They mix new, original content with repurposed reports from their over-the-air programs.
Morse said CNN has to meet the challenge by delivering a superior product. “If we create something of value, people will be willing to pay for it,” he said.
Latino issues will get a place at the table on the anchor’s new nightly newscast for NBC News Now.
Cable news operations are heavily dependent on revenue from pay TV operators, and every time a household decides to drop or forgo a subscription, that money goes away. While the streaming services provided by Fox News and CNN can’t exactly replicate what they do on cable, they at the very least need to become viable placeholders in preparation for the day down the road when cable is no longer viable.
“CNN+ is unquestionably the future of CNN in that sense,” Morse said.
The network has plenty of visibility with the online audience. CNN had 191.9 million unique global visitors to its digital sites and apps in January, more than any other news service. On Feb. 24, as fighting escalated in Ukraine, CNN had 54 million unique digital users, ranking it among the top 20 days in its history.
Jon Klein, a former CNN president and now co-founder of the streaming sports platform Hang Media, believes the channel’s famous name has enough clout to support a stand-alone service with a fee.
“One thing we know about fragmented media platforms is that established brands tend to prevail,” he said. “When the internet emerged in 1996, it should have eradicated CNN. Instead they became one of the dominant sources. They provided trust in a chaotic environment.”
Morse said the goal is to turn CNN+ into a global service, much the way Netflix, Disney+ and Amazon Prime have done.
“There’s no other brand, with the possible exception of the BBC, that resonates globally the way CNN does,” Morse said.
But in the short term, CNN has to develop the new platform while sustaining legacy business, which still throws off an annual profit of $1 billion despite lagging behind Fox News in the ratings.
Fox News was mindful of its cable operator relationships and made Fox Nation more of a lifestyle programming streaming service. The bulk of its programs are non-scripted series hosted by its personalities, plus acquired films and series, such as the reality show “Cops,” that appeal to its conservative audience.
Parent company Fox Corp. has not released any data on Fox Nation subscribers.
The company’s executive chairman, Lachlan Murdoch, has touted Fox Nation’s growth to financial analysts, who have said the service has over 1 million subscribers. “We don’t see CNN launching into that space as anything other than affirming of our strategy and what we’re doing,” Murdoch told analysts last summer.
CNN+ is creating programs that will have a shelf life. But in addition to breaking news coverage, it will also carry five daily, live news programs, a risky approach for a startup. Few viewers will see the live programs in the early going, and lasting only 24 hours, they will be difficult monetize.
Wallace, who joined CNN+ after 18 years at Fox News, will run a four-night-a-week interview program.
“If the total audience is X this year and then it’s 2X or 3X a year from now, that’s fine,” Wallace said in an interview. “Part of the excitement to me is to be on the ground floor. When I moved from ABC to Fox in 2003, people said, ‘Omigosh, you’re going from a network to cable.’ I scoffed at that. It turned out we had plenty of impact from a cable platform, and I don’t doubt that six months from now we’ll have plenty of impact from a streaming platform.”
Wallace’s program will be in the style of Charlie Rose and former CNN stalwart Larry King, featuring in-depth interviews with figures from politics, entertainment, culture and sports.
There is no fixed length for “Who’s Talking to Chris Wallace,” making it a throwback to David Susskind’s “Open End,” where the show lasted as long as the host found his guests to be interesting.
“With streaming we don’t have to make a [commercial] break or go to the top of the hour,” Wallace said. “I can go as long as I want.”
Other daily programs include “The Source With Kasie Hunt,” where the former NBC News correspondent will analyze Washington issues; “The Big Picture,” with peripatetic correspondent Sara Sidner going deep into a single story; and “Go There,” an anchor-free show that draws on reports from correspondents around the world.
After CNN anchor Wolf Blitzer finishes his daily program “The Situation Room,” he will head to another studio where he anchors “The Newscast” for CNN+, an evening newscast that sums up the events of the day in 22 minutes.
CNN+ subscribers will also get exclusive access to digital town hall-like events that will enable them to question news subjects directly.
Other hosts signed on by CNN+ include actress Eva Longoria, who will do a Mexico-based food and travel show. Rex Chapman, the provocative retired basketball star, will have a weekly talk show. The platform will also have Jemele Hill and Cari Champion, the former ESPN stars who have become outspoken on issues connecting politics and social justice to sports. Cornish, who had a passionate following during her years at “All Things Considered,” will have a weekly interview show titled “20 Questions.”
The most compelling offering on CNN+ may be the library and films and original series it has built up over the last 10 years under Amy Entelis, executive vice president for talent and content development. The films and series — including “Anthony Bourdain: Parts Unknown” — were developed as a way to give audiences a reason to tune in to CNN when there is no compelling breaking news.
After current streaming agreements with HBO Max and Netflix are up, nearly all of CNN’s films and originals will be exclusively available on CNN+, including Bourdain’s programs. Entelis is also commissioning original films and series, such as Longoria’s, for the platform.
“People want what they want when they want it, and so it’s great that we can move all this to a platform where viewers can pick and choose,” Entelis said.
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