CNN+ reportedly halting all external marketing, determine next steps
By Matt Collins Article may include affiliate links
New owner Warner Bros. Discovery has ordered that all marketing spending for the CNN+ streamer be halted, reports Axios.
The company is also trying to determine the next steps for the streaming service as multiple sources report what WBD execs reportedly see as disappointing launch figures.
CNN, however, continues to say it’s satisfied with the launch and refuses to provide exact figures. Internally, some sources also told Axios that those in the CNN division tend to view the launch figures as encouraging, while WBD appears to feel differently.
This information comes from five separate sources who spoke to Axios.
The report also notes that CNN+ is said to have 150,000 subscribers, which is about 50,000 more than the previous estimate that was reported by Bloomberg (an earlier report from CNBC suggested only 10,000 people were watching the service per day on average). Reports suggest CNN has spent upwards of $300 million so far to launch the streamer.
At least some of that recent growth could be attributed to the service becoming available on Roku — but not until over a week after its March 29, 2022 launch.
That said, adding 50,000 subscribers after joining the world’s most popular smart TV platform doesn’t seem like a good sign.
Meanwhile, CFO Brad Ferrer was laid off and replaced with Discovery’s CFO Neil Chugani as part of what the company called a broader restructuring within the department. It’s not immediately clear how much Ferrer might have been involved in financial projections for CNN+ that appear to be souring quickly.
CNN had hired a consulting firm to help project a business model around CNN+ and originally hoped to make its streaming service break even after four years and $1 billion in investment, including sizable sums going to high-priced talent and external marketing.
However, that plan would have required 2 million signups by the end of its first year and growing to 15 to 18 million by year four — figures that seem to be extremely unlikely at this point, especially given that marketing is reportedly being cut back.
Axios reports that the network will continue to promote CNN+ on its own airwaves and networks as well as digital properties as well as through co-branded products such as the “5 Things” podcast that shares a name with one of the more popular shows on CNN+ so far, but it’s pulling back on buying up ad time from third parties.
In addition to “house” advertising and other promotions, the network is also running a “deal of a lifetime” that gives subscribers who sign up early 50% off the service for life, including any future price hikes.
That makes the service $3.99 a month as opposed to $5.99 a month normally. Because it didn’t release the full results of its study and financial analysis, it’s not clear if the service could potentially survive on the $3.99 price point as a regular price to make it more appealing to sign up.
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