Warner Bros Discovery’s cable news channel CNN will launch a subscription product franchised from its cornerstone website later this year, the network’s CEO Mark Thompson affirmed in a memo to employees on Wednesday.
The memo offered no specific plans about the subscription product, but Thompson affirmed it would be part of a billion-dollar-plus digital business.
The plan is part of a broader strategy to center CNN around digital distribution and lessen its dependency on affiliate fees charged to cable and satellite companies for carriage of the channel. CNN, as a digital business, is one of the strongest online news platforms in the world; as a cable news channel, it often places third in the ratings among four competitive networks.
To further the initiative, Thompson said CNN will be merging its television news operation with that of its digital division. Around 100 employees will be let go as part of the transition, Thompson affirmed, though it wasn’t initially clear where the cuts will come from or whether the TV unit will be impacted the most.
Less clear is what CNN intends to launch as a digital subscription product, too. CNN’s cable and satellite distribution agreements largely preclude it from selling access to the domestic feed of the channel through the Internet on its own (to overcome this, WBD’s cornerstone streaming service, Max, offers a version of CNN that largely simulcasts the international feed, with a few original programs peppered into the schedule).
Two years ago, then-AT&T owned WarnerMedia experimented with offering a standalone CNN streaming product, called CNN Plus, which shuttered after WarnerMedia merged with Discovery Communications. The service lasted less than a month under the present-day WBD before being shut down completely.
Thompson shares the views by others at CNN and WBD that a robust digital product that includes a premium subscription offering is the right way to go. He previously worked at the New York Times, which turned around its revenue struggles by building or acquiring various digital products, including podcasts and games, which were packaged and sold for around $15 per month.
The difference between New York Times and CNN is apparent: One is a newspaper, which affords it some flexibility in carving out its own digital identity and ancillary products that are complementary to the brand. The other is a worldwide television broadcaster, and when people think of “CNN,” they think about TV first.
Changing that is not going to be an easy feat, even for Thompson, who affirmed the challenges in his memo.
“Turning a great news organization towards the future is not a one-day affair — it happens in stages and over time,” Thompson wrote on Wednesday. “Today’s announcements do not answer every question or seek to solve every challenge we face. However, they do represent a significant step forward, and I hope you will read about them in that spirit.”
But he said CNN needed to try new things as cable and satellite customers flee for streaming platforms — most of which don’t offer CNN content — and the website is a natural place to start.
“We want to build on CNN.com’s reach with a new focus on engagement and frequency – how long our users spend with us and how often they return – by improving the quality of the product experience and giving users powerful reasons to come back to us more often,” Thompson said.
