Could CNN+ be seeing layoffs as soon as May? Reports surface saying signups are missing targets
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CNN+ is just two days old and already there are rumblings that signups aren’t going to be anywhere near what the network expected according to insiders — and people’s jobs could be on the line.
Fox Business’ Charles Gasparino tweeted that the buzz inside CNN is that at least some of the hundreds of people the network hired to launch CNN+ could be facing layoffs as early as May 2022.
Other reports say that CNN+ will be folded into Discovery+ once WarnerMedia (CNN’s parent) and Discovery wrap up their merger in the coming weeks.
The soon-to-be chief of the combined companies has told investors that it’s likely Discovery+ and WarnerMedia’s HBO Max will end up either merged or bundled at some point in the future, possibly with a free tier.
CNN did not directly address those claims in responses to multiple outlets, only saying they are pleased with the launch.
Breaking: @CNNplus employees bracing for layoffs possibly as soon as May amid projections of lackluster sales of new streaming channel; CNN employees say new streaming channel could be merged into larger @discoveryplus as early as May unless subscriptions pick up 130 @FoxBusiness
— Charles Gasparino (@CGasparino) March 30, 2022
At least one industry veteran, Chris Balfe, told The Daily Mail that he estimates CNN would need to sign up between 500,000 and 1 million subscribers in its first year in order to set itself up for success.
The network is currently discounting the $5.99 a month service to $2.99 a month, so 500,000 signups could mean between $1.49 million and $2.99 million in revenue depending on how much subscribers are paying and assuming 500,000 signups.
The $1.49 million figure assumes that everyone signs up with the discounted deal while the $2.99 million would be the total if everyone paid full price, which is likely to happen because CNN has committed to keeping people who sign up in its first four weeks at a 50% discount for the life of the service, even if there are price hikes.
So, in reality, $2.99 is simply a best-best case scenario given Balfe’s suggested numbers, but in reality the revenue would likely fall somewhere near the lower end of that range.
Those numbers grow to between $3 million and $6 million if it can get 1 million subscribers, but again that higher figure assumes every pays full price.
CNN has reportedly invested over $100 million in the service — so it’s still a long way off from making that commitment pay off.
While terms of their deals were not revealed, it’s hard to imagine CNN being able to turn a profit on the best case scenario of $6 million in revenue while meeting payroll for pricey on air talent plus the behind the scenes workers.
The only way CNN is making money from the service is subscription fees — there’s no ads in the CNN+ exclusives.