Just why were these CNN+ projections so far off and who’s to blame?
By Matt Collins Article may include affiliate links
After watching its streaming effort CNN+ crash and burn, news about just how the effort was viewed within the network’s halls is starting to emerge.
According to a report from Axios as well as other published reports, there was a mix of skepticism about just how successful the service would be.
Insiders also said that salaries for CNN+ jobs were higher than for linear TV shows, creating awkward competition within the company, sending streaming costs soaring and, potentially, could make it harder for CNN to absorb people left without jobs into the primary network at the same level of pay.
Either way, CNN expects that hundreds of people will lose their jobs because of the shutdown of CNN+ after less than a month in operation. Warner Bros. Discovery has promised 90 days of pay for affected employees while the company tries to find them other jobs within its operations, plus at least 6 months of severance for those who ultimately can’t find a job.
The exact number of people CNN+ hired varies depending on what report you read, with some figures soaring as high as 700. There are reportedly only 100 or so open positions within CNN proper.
Also the subject of talk is the research and strategy documents CNN worked with consulting firm McKinsey to generate, which appears to have significantly overestimated the demand for a service such as CNN+. Some insiders say that the research with numbers in the millions of potential subscribers was eventually dismissed by at least some.
The CNN+ interface, which included the typically on-screen browsing elements as well as the “Interview Club” feature, was reportedly not distributed widely for feedback with other teams at the network.
Meanwhile, other CNN staffers blame WBD for being intent on killing off CNN+ no matter what, though execs from that company reportedly were hoping CNN would hold off on launching the service until after the merger was complete so that programming could be considered as part of the broader streaming plans for a combined mega-streamer under the HBO Max name (as it stands, WBD appears to be interested in including CNN content with that combined streamer, though no firm timelines or programming decisions have been announced).
According to internal projections, CNN+ would have needed 2 million subscribers by the end of its first year to stay on track with a path toward profitability. Axios reports that the network would have likely needed to spend about $400 million in 2022 to stand a chance of reaching that goal; it reportedly already spend $300 million and had planned on spending up to $1 billion.
Much of those funds were earmarked for advertising and marketing.
CNN+ was supposed to break even in 2025 with 15 to 18 million subscribers.
Those numbers were unlikely to become a reality given that CNN had reportedly only managed to sign up about 150,000 people in the first month (and ended up saying it will give everyone their money back).
Projections also called for CNN+ to eventually turn an $800 million profit by 2030, which is more than CNN’s linear channel makes (around $500 million).
Why the numbers were so far off — and given the massive swings that would need to happen to get them even close to projections — is an open question and casts doubts on CNN leadership at the time and McKinsey’s work.
Of course, it’s never possible to accurately project the future or what consumer adoption rates will be, but as more of CNN’s ambitious projections circulate, it’s becoming more and more of a head-scratcher as to why the projections were so generous, especially when compared to what the launch product was.
Countless media watchers, some CNN insiders and even casual observers projected CNN+’s failure in news articles, opinion pieces, blog posts and on social media (or just in their head). While it’s easy to say “told you so” after the fact, it’s hard to imagine why those red flags didn’t spark more analysis within CNN to hash out modified plans.
Ultimately, the people hit hardest by this are the hundreds of staffers who gave up other jobs — some of them moved across the country as one CNN+ host observed — to come to a venture that seemed on solid footing. Many of these people are unlikely to find a job within CNN — or, if the reporting is accurate, may have to take pay cuts, so the shutdown of CNN+ has the potential of affecting hundreds of families’ lives.
While none of these people were forced into taking jobs at CNN+, it appears that at least some were lured in with the promises of big money and the chance to be part of something “revolutionary.” It’s always a gamble when taking a new job — so it’s not something that those who quit other jobs can be totally blameless for, but many likely put a great deal in trust in CNN leadership that appears to have been mostly misguided.
For its part, CNN appeared, at least on the surface, to be committed to the project with what it thought was a business model that made sense. It was even willing to lose money for several years to make the effort successful — but this was, again, all based on projections that apparently turned out to be wildly off base.
Big name anchors and executives brought in are likely to do just fine — with many likely having contracts that lock in all or most of their value or offering lucrative exit packages worth millions, as opposed to the minimum 9 months of potential severance most employees will get. The network’s consultants have likely already been paid for their work and are probably going to lay low about their involvement in the project while touting more successful projections they’ve done for other companies.