The New Management at CNN May Have Already Begun Dismantling the Dysfunctional Network Apparatus

The New Management at CNN May Have Already Begun Dismantling the Dysfunctional Network Apparatus
AP Photo/Ron Harris

More signs are emerging that the new bosses are walking through CNN and pointing out what needs to go.

When the final steps were underway to complete the merger between Warner Media and the Discovery Networks, it became the classic matter of not-if-but-when changes would be experienced at the struggling news network CNN. That answer is coming to light – it is now. The much-needed changes at the iconic but faltering news outlet are already taking place, and they are being enacted swiftly.

Just yesterday, we covered how David Zaslav, the head of the newly formed merger, was targeting CNN for signific changes, particularly in the refocus on hard news. Now comes a report that the beleaguered CNN+ is already looking to be retooled. At Axios, Sarah Fischer details that the new Warners/Discovery management is addressing what has become a clear problem for the company.

Warner Bros. Discovery has suspended all external marketing spend for CNN+ and has laid off CNN’s longtime chief financial officer as it weighs what to do with the subscription streaming service moving forward, five sources tell Axios.

Three weeks. That is how long CNN+ has been made available. Three weeks, and already the management is considering it a lost cause. This is partly a result of the Discovery executives working off of acquired streaming knowledge, realizing what does and does not work with consumers. They are now eyeing options for the new streaming product, such as rolling it into HBO Max (similar to NBC News on Peacock), possibly bundling the services (similar to Disney+/Hulu/ESPN+), and maybe even offering some of its content for free in an ad-supported offer.

The new management team was not happy with the rollout of CNN+ ahead of the merger, but certain realities made a delay untenable, such as the amount of talent that had been signed at high prices and would then be on the sidelines getting paid to not produce content. What is clear is that CNN+ was not meeting projections, much of that partly due to unrealistic projections being set. 

Some people inside of CNN had been looking at hard copy news outlets for their comps in setting subscription goals. Washington Post and Wall Street Journal both have subscriptions in excess of 2.5 million, but that is a flawed equivalency. Those are from readers who have segued from the print to digital editions, which differs from a cable news network that remains on the air while offering an adjunct premium product. 

The true comparison would be Fox Nation, which has 1.5 million subscribers for its streaming platform. That is the figure after three years in operation, and for a cable news channel that is far more popular from a ratings perspective. A fair expectation would be about a few hundred thousand subscribers for a network that at times averages less than half the audience of Fox, and as low as 20 percent in primetime. And that subscriber number would have to be achieved over a length of time. The Discovery management realizes this and they are looking to roll out a new set of plans already for its brand new service.

Sarah Fischer states that some inside of the network are dismayed that money for CNN+ is being pulled off the table, but like those in the projection teams, these are people operating in an alternate reality. The new company leaders are not about to throw good money after bad results when they are in a mindset of streamlining and restructuring. 

With an initial projected budget of $1 billion for the service, that figure flies directly in the face of Zalav’s pledge to trim $3 billion from the new company’s expenditures. There is little to no chance of that planned outlay surviving, and when you then factor in the dismal return on the initial investment it becomes foolhardy to even express surprise at that budget getting yanked. Estimates are that $300,000 has been spent on marketing for this trainwreck. 

That is just another sign of the swift action being taken by the new operators. Consider that it was only this past November when things remained status quo at CNN. The network was still focused on the insurrection, many were still obsessed with Fox News, and despite unrelenting reasons to justify his removal, Chris Cuomo was still on in primetime. From that not distant past Cuomo is gone, the company head Jeff Zucker has been dispatched, the focus on Fox has been diminished, and even the obsession over the January 6 riot is starting to ebb on the air.

That story focus was largely driven by Zucker, and so too was CNN+. Warners/Discovery was handcuffed from influencing the rollout until the merger met governmental approval, and when that arrived, the debut had been set. So the next option was to have Zucker dismissed and try to avoid tainting the product further, as well as making any possible moves with the service quicker without him in the way. This is seen by the fact that Zucker was removed by his longtime ally, Jason Kilar, who then stepped down this month, as planned, from his position as Warners CEO.

The irony rests in a brand new product from CNN being seen as representing the old way of doing business at the network, and it has been a losing business plan. The profitability in recent years has come primarily from carriage deals with cable and satellite providers, less so from advertising. That is a sign of people consuming CNN by rote option, not by choice. This is something the new management recognizes as needing to be repaired.

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