So, it looks like that stand-alone CNN streaming service is actually happening, and really darn soon. Now we just need to figure out one simple question: why?
“There’s been some rumors in the media about us launching a direct-to-consumer, CNN Plus news product, that will in fact occur,” AT&T CEO John Stankey said at an appearance Thursday at the Economic Club in Washington, D.C. “We’ll keep pushing ahead with those things. So my view is we won’t be waiting, we’ll be executing.”
That sounds very big-shouldered, git-‘er-done of Stankey, with that bracing declarative language corporate executives like when they talk about, you know, big corporate decision-making stuff.
But don’t forget that this is the same self-professed “Bellhead” who was WarnerMedia’s first chief after AT&T spent $85 billion to buy what was then called Time Warner.
Then Stankey took over as AT&T CEO and promptly decided to undo that acquisition just three years after the original deal, spinning off WarnerMedia into a $43 billion merger with Discovery. That set of second thoughts came just a few months after he also unwound AT&T’s other big media acquisition, DirecTV.
Of course, cobbling together the newly named Warner Bros. Discovery will take a little while, attended no doubt by more job losses and disruptions. But at least Stankey has already been able to give the merged company yet another new name, complete with lame retro-looking logo that includes The Maltese Falcon’s misquote of Shakespeare. Maybe they’ll have second thoughts about that logo soon enough too.
But, moving forward and executing and all, we don’t know a lot of detail yet about Stankey’s latest great idea.
Two weeks ago, the Wall Street Journal reported plans were coming together for the standalone service, and that CNN Plus was hiring “hundreds” of new employees to generate a swathe of new programming, especially from the company’s biggest names, such as Anderson Cooper and Don Lemon.
Both those evening anchors already have revamped their deals, “to encompass their work for CNN Plus.” That extra work will involve decidedly different programming from what’s on the mothership, so CNN won’t get in trouble under its still-lucrative contracts with existing cable and satellite distributors.
But plenty of other unknowns still exist: Will CNN Plus be subscription only? Or will it take a hybrid approach, with ad-supported tiers much like HBO Max and Discovery Plus? Will it be bundled with those future corporate siblings?
And then there’s one really good question, tied to that initial, overarching, “Why?” Who’s buying this thing? How many actual, paying subscribers are actually going to pony up their money for access to a niche news channel offering more of not quite the same things you can get on CNN?
HBO Max at $15 a month ($10 with ads), and Discovery Plus at $6.99 ($4.99 with ads) already put the future company’s streaming fees at one of the highest levels in the sector. Add in $3 or $4 a month for CNN Plus, and it starts to feel like a late-stage cable industry fever dream.
The reports so far suggest CNN Plus might be rather similar to arch-competitor Fox News’ Fox Nation, its standalone streaming service that features Tucker Carlson, Sean Hannity, Tomi Lahren, Judge Jeanine, and Dan Bongino. Those “news” personalities appear in talk shows, true-crime docs, quiz shows, home tours, cooking programs and other lifestyle-focused material. There’s also a conservative Christian vein of programming not always evident on the cable parent.
For someone wanting to more or less copy that model, however, there are some reasons for caution. Subscription rates for Fox Nation have been, ahem, modest,
Apptopia estimates the service’s average daily users jumped up 95% in March, which is great, but still only hit 210,000, roughly one-fifth as many as are watching the parent cable channel. And that big jump came after consecutive double-digit declines in the months immediately after the election. That’s … not promising.
But also not promising is the prospect of relying on cable distribution for your future. Cord-cutting is sending Fox News households plummeting, to a projected 63.1 million by the end of next year, down nearly 20% in two years, according to Kagan Associates.
Fox’s approach makes sense given its limited streaming options. It doesn’t have a big omnibus SVOD service in which to tuck its hugely profitable cable ratings king. And a local news push on AVOD service Tubi is nice, but no game changer.
Warner Bros. Discover … or whatever, like the parent companies of CBS and of NBC/MSNBC/CNBC, has much better options. Both Peacock and Paramount Plus feature significant news programming from their cable and broadcast operations.
CNN is choosing to go it alone in streaming. That means not only hiring all those programming people, but also building out its own infrastructure of streaming, billing, customer service and marketing in the brutally competitive streaming universe.
If, however, this is all being done because CNN might get spun off into not just a standalone SVOD service, but a standalone company, then launching a branded streamer with all its infrastructure is exactly what will be needed.
Conversations about spinning off CNN cropped up while AT&T was trying to buy Time Warner, mostly because the former president hated CNN’s coverage of him. His Department of Justice then contested the acquisition in court, using a novel and not well prosecuted antitrust claim. But AT&T won the case, and Stankey began working his magic.
And that’s, ultimately, the point.
We don’t know a lot yet about CNN Plus, but given AT&T’s, and Stankey’s, histories with media properties, maybe moving forward with all this executing isn’t the best idea. Perhaps it’s time Stankey started thinking more like a doctor than a Bellhead as he surgically removes huge chunks of his company. And what’s the most important rule in medicine:
First, do no harm.
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