Executives at Warner Bros Discovery could consolidate the fledgling streaming news service CNN Plus into the blockbuster entertainment app HBO Max, according to two people familiar with discussions at the company.
The discussions are taking place several weeks after Discovery acquired the CNN and HBO brands and content library through a merger with AT&T’s entertainment subsidiary WarnerMedia, which was consummated earlier this month.
The merger between Discovery and WarnerMedia was announced in May 2021. Two months later, WarnerMedia officials announced plans to launch the CNN Plus streaming service, pledging to produce a slate of original news shows and documentaries that would be substantially separate from the traditional cable news channel.
Though a standalone streaming service had been rumored for months, the move still caught Discovery executives off guard, according to one official who spoke with The Desk on condition of anonymity. Those executives had “hoped to be more involved in the decision-making process” but found CNN was “operating as an autonomous unit” within WarnerMedia, the official said.
Some officials at Discovery encouraged their counterparts at WarnerMedia to hold off on launching the service, arguing that CNN Plus’ original content would be better suited for HBO Max or even Discovery’s own streaming service Discovery Plus. But those concerns fell on deaf ears: CNN Plus debuted last month on Apple TV, Amazon Fire TV and smartphone devices.
Now, Discovery executives are trying to figure out what they should do with a streaming service the company did not want in the first place.
Over the last few weeks, some of these plans have been on full display: The newly-formed Warner Bros Discovery has reduced CNN’s marketing budget and other investments, according to the website Axios. Discovery also laid off CNN’s chief financial office, Brad Ferrer, the website said on Tuesday.
Those moves are part of an attempt by Discovery to reel in CNN Plus before the streaming service becomes unmanageable, according to two sources familiar with the company’s thinking.
“The content is good, but it can exist somewhere else,” one Discovery staffer told The Desk this week. “The big question is, where does it go?”
One plan being discussed inside Discovery would see CNN Plus content move to HBO Max, where it would be exclusively available to subscribers who pay $15 a month for the service’s ad-free tier. The move would be similar to one made by WarnerMedia executives last year when new film releases were available on HBO Max the same day they debuted in movie theaters, but not for customers of the service’s cheaper, ad-supported tier.
Officials at Discovery think moving CNN Plus content into the ad-free HBO Max package could help the company recoup some marketing, production and talent acquisition costs associated with the standalone news service. Over time, the company would wind down CNN Plus programs that are produced on a daily basis to focus exclusively on weekly shows and documentaries, which could help further reduce production and talent costs.
But moving CNN Plus content into HBO Max could create other problems for Discovery: Some talent contracts for CNN Plus anchors and reporters specified they would be employed by and producing content for CNN, not HBO or Discovery.
To remedy that problem, Discovery executives are considering ways to offer talent lured to CNN Plus their own programs on the traditional cable and satellite news channel. That plan would likely require a change in CNN’s programming lineup to accommodate new shows.
CNN has guaranteed time slots for some of its weekday anchors and news personalities, meaning talent hired specifically for CNN Plus could be relegated to the weekend schedule, when cable news viewership tends to be lower.
Discovery is also considering a strategy that would transform CNN Plus into a free, ad-supported streaming service. But instead of operating CNN Plus as a standalone service, its content would be offered on the CNN website and associated apps alongside news clips and online-only stories. The website Axios first reported some details of this strategy on Tuesday.
Eventually, Discovery executives could settle on a combination of the two plans, one where a limited amount of CNN Plus content is offered on a limited, ad-supported basis through CNN’s website with the entire CNN Plus content library existing on HBO Max, a source said.
Unwinding CNN Plus will be an easier transaction than merging the content libraries of HBO Max and Discovery Plus. Agreements with cable, satellite and streaming platforms like Roku and Amazon will make combining HBO Max and Discovery Plus a complicated endeavor for at least the next year.
Instead of a merger, Discovery will offer an HBO Max-Discovery Plus bundle directly to subscribers. That bundle is expected to be announced in the next few months.
