- Warner Bros. Discovery has pulled the plug on streaming service CNN+ just weeks after its launch.
- Insiders are laying the blame on CNN president Jeff Zucker and departed WarnerMedia CEO Jason Kilar.
- Other observers said the service was poorly marketed and lacked unique, compelling content.
CNN+’s demise came fast, and so have the blame and recriminations.
Warner Bros. Discovery pulled the plug on the costly project less than a month after launch, with new CNN CEO Chris Licht saying in a statement that “CNN will be strongest as part of WBD’s
strategy which envisions news as an important part of a compelling broader offering along with sports, entertainment, and nonfiction content.”
Or, as Licht put it to staffers in a town hall at the company’s New York headquarters on Thursday, one source told Insider, the team that created CNN+ had built “a beautiful house” when what the new owner really needs is “an apartment.”
Blame for the destruction doesn’t seem to be falling on new owner WBD or its emissary Licht. Instead, company insiders and industry observers are largely laying responsibility on the shoulders of former CNN president Jeff Zucker and departed WarnerMedia CEO Jason Kilar.
“This was all ego. All a power play for a bigger job or independence. Hubris. Nothing more,” said one former WarnerMedia exec of Zucker. “The only people who ever thought this was a good idea either worked at CNN or were trying to get CNN + to hire them. Nobody else.”
A WBD executive called the service’s failure “a combination of the wrong strategy and wrong capital allocation.”
Two other people familiar with the operation previously told Insider that Kilar had insisted on sticking to the planned Q1 launch date for CNN+ instead of postponing it until after WarnerMedia’s acquisition by Discovery, which closed April 8.
“It was a vanity project for [Kilar] and Zucker,” an insider familiar with CNN’s plans said in early April. “They wanted to launch it.”
After Zucker resigned from his role in February — over his failure to disclose a relationship with a colleague — industry observers wondered if the company might hit pause on CNN+. But Kilar stayed the course.
“Frankly, I think Jason Kilar knew it was going to fail,” the former WarnerMedia executive said, “and was happy to let Zucker push it out there so his last final thing at CNN was a failure.”
David Zaslav, now Warner Bros. Discovery’s CEO, was frustrated by Kilar’s decision, according to a report in Variety, but legal considerations amid the merger process constrained him from weighing in on the strategy.
Signs of trouble dogged the pricey endeavor right out of the gate — one CNN executive told Insider that including staff, the launch budget was in the area of $250 million. A clear picture of CNN+ adoptions was hard to come by, since consumers who already had the CNN app could access the new service without downloading a separate app. But CNBC reported that two weeks in, fewer than 10,000 people were using CNN+ daily, compared to 773,000 daily viewers of the cable network in 2021.
Internally, metrics on the service were scarce, according to a former CNN employee.
“They send weekly emails about beating MSNBC or whatever,” this person said. “But [they] haven’t said anything about the results of the insane investment they’ve made.” Another person familiar with the launch said the app’s stats weren’t as dire as they appeared in media reports.
Industry analyst Peter Csathy suggested the service’s marketing did a poor job of communicating its value. “The messaging of why it was a ‘must-have’ was muddled,” he told Insider.
“I think the big benefit is ad-free news,” he said, adding that he didn’t see this aspect effectively promoted. What was on offer, he added, “You could get essentially on CNN.”
“They didn’t build something people wanted,” the former CNN employee said. “There was no evidence for any of it. And they did it anyway.”
Former CNN anchor Rick Sanchez, now CEO and cofounder of Agua Media, a Hispanic-aimed podcast network, said CNN’s mistake was not tailoring its offering to the younger audiences it was hoping to bring in with CNN+.
“I think somewhere along the line they made people think watching old CNN but putting jeans on it would work,” he said. “They were selling the personality. I think they underestimated the intelligence of viewers. The new audience in the US isn’t into names; they want great stories.”
Whatever audiences want from CNN on a streaming service, they won’t be getting it until WBD’s strategy unfolds under JB Perrette, a longtime Zaslav consigliere who’s the new company’s CEO and president of streaming and interactive. Perrette joined Licht for the Thursday town hall at CNN, where he spoke of Discovery’s past challenges with launching streaming services, according to a New York Times report.
The shuttering of CNN+ won’t be the last painful cut executed by WBD — the Discovery-WarnerMedia merger was announced with a promise of $3 billion in synergies, and the WBD executive said he’s expecting more company leadership changes to be announced in the coming weeks, followed by inevitable layoffs.
“It’s going to be a tough few months for the company,” he said.