Warner Bros. Discovery, which owns CNN, is shutting down marketing for the network’s new streaming service, CNN+, after a lukewarm public reception, five inside sources told Axios on Tuesday. CNN’s long-time CFO has also been let go, signaling the network’s financial issues go beyond the apparent failure of its subscription streaming service.
Brad Ferrer, former Chief Financial Officer for Discovery’s streaming and international operations has been replaced by Neil Chugani. The move is part of a “Restructuring of the finance department,” the sources said, adding that the occupants of other high-level posts at WarnerMedia are likely to get the ax as Discovery, which merged with WarnerMedia earlier this month, places its own people in charge.
The sources claim that CNN executives believe the launch was successful. Discovery, however, disagrees. The platform reportedly has just 150,000 subscribers, with a mere 10,000 tuning in on a daily basis – embarrassingly low numbers given the $300 million already spent on the project. CNN+ had hoped to draw 2 million subscribers within its first year.
While the cable network initially planned to invest $1 billion into its streaming project over the first four years – at which time it was projected to break even – those numbers have been severely cut back, sources told Axios. The executives’ projection of CNN+ reaching 15 to 18 million subscribers over the next four years now seems far outside the realm of possibility.
With ratings on a steep downhill slide, netting just 857,000 average prime-time viewers for the first quarter of 2022, CNN’s new management reportedly wants to give the channel a makeover, bringing it back to its hard-news roots and away from the opinion-dominated platform it has become. According to executives, they are prepared to give up some short-term revenue to shift the channel towards reporting hard news stories. There is so much competition on cable TV with other US news networks trying to make themselves more like CNN.
However, it seems less likely that CNN+ can be part of that vision. Reports of May layoffs began to circulate after the platform had already broadcast its inaugural show. The platform’s questionable business decisions – it marketed the first 29 seconds of its inaugural broadcast, an episode of ‘5 Things with Kate Bolduan’, as a set of NFTs, and its weekly schedule was packed full of the same names that viewers can get for free on its TV channel – suggest management will have an uphill battle turning CNN into a serious news station again.
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Chris Licht, the new CEO, has pledged to swear off Twitter his first day on the job in order to focus on reality. He comes from CBS where he served as executive producer on The Late Show With Stephen Colbert and also created the Morning Joe with Joe Scarborough. Licht will replace Jeff Zucker who left the network in the midst of sexual misconduct and an epidemic of pedophilia. This also took the job of Chris Cuomo, the anchor of the station and one of his producers.
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