CNN’s streaming news platform CNN+ launched only two weeks ago and, according to at least one report, it’s experiencing subscription issues with the possibility of cuts, both in terms of investment and ultimately jobs.
Axios came out with a report Tuesday stating that the company’s $1 billion investment into CNN+ within its first four years is now probably going to be cut significantly “in response to a low adoption rate.” CNN has already spent around $300 million on the service so far, which includes roughly $100 million on marketing.
Sara Fischer, who published the report for Axios, writes, “CNN executives, with help from consulting firm McKinsey, originally expected to bring in around 2 million subscribers in the U.S. in the service’s first year and 15-18 million after four years.” The company originally planned for the service to break even after four years. However, Fischer notes that with the expected cut in funding, those expectations will probably to be lowered.
CNBC’s Alex Sherman seems to match Fischer’s “low adoption rate” reporting, adding that fewer than 10,000 people are using CNN+ on a daily basis two weeks into its existence, citing sources.
One positive for the subscription-based streamer, which charges $5.99 a month or $59.99 annually, is that it now counts Roku, America’s most heavily-used smart TV platform, as a partner. But will that be enough to fund 8-12 live daily shows, new CNN+ Original Series and CNN Films and more? That remains to be seen.
Fischer cites sources inside CNN who say many colleagues are wondering why the company didn’t delay the launch of CNN+ until after the close of WarnerMedia’s merger with Discovery. It’s not totally clear whether CNN+ staffers and top executives, including the CNN+ executive in charge Andrew Morse, will remain with the company as the new regime settles in.
At the end of the day, what will probably happen is that CNN+ end up being offered as part of a larger bundle with fellow Warner Bros. Discovery streaming offerings HBO Max and Discovery+.
Despite these early struggles that Axios (and others) are reporting, a CNN spokesperson said in a statement to TVNewser, “We continue to be happy with the launch and its progress after only two weeks.”