Discovery executives have decided to close CNN Plus, the ambitious streaming news startup launched less than a month ago.
The announcement came in an email to staff penned by incoming CNN boss Chris Licht, who is expected to start at the news network later this month.
In the email, Licht said the decision to close CNN Plus was more in line with the direct-to-consumer streaming strategy of the network’s parent company, Warner Bros Discovery.
” In a complex streaming market, consumers want simplicity and an all-in service, which provides a better experience and more value than stand-alone offerings,” Licht said.
CNN Plus hired a slew of on-air talent and behind-the-scenes workers for the streaming news project, which charged customers $6 a month or $60 a year for access to original daily news shows and on-demand documentary programming.
Customers will receive pro-rated refunds for any unused portion of their service, CNN said on Thursday. Employees will have several months to explore other positions within the cable news network and its digital brands and will be offered the opportunity to apply for jobs at other Warner Bros Discovery properties, the company said, adding that workers will continue to receive pay and benefits during that time.
Employees who do not land a new position within the next three months will be laid off and given six months worth of severance pay.
“In a complex streaming market, consumers want simplicity and an all-in service which provides a better experience and more value than stand-alone offerings, and, for the company, a more sustainable business model to drive our future investments in great journalism and storytelling,” Jean-Briac Perrette, Discovery’s head of streaming, said in a statement.
The decision to close CNN Plus came amid reports that the startup news service was growing at a good rate but few of its subscribers were actually consuming content on a daily basis. Figures reported by CNN noted around 100,000 customers were paying for the service, but other reporting indicated less than 10 percent of those subscribers were actively using the streamer.
CNN Plus launched in late March with support for smartphones, tablets, Apple TV and Amazon Fire TV devices. It rolled out to Roku users about two weeks later.
The service was announced several months after CNN’s former parent company AT&T said it would spin off its entertainment subsidiary, WarnerMedia, into a separate company that would later merge with Discovery.
Executives at Discovery became frustrated by CNN’s decision to move ahead with its direct-to-consumer streaming service while the merger was securing regulatory approval and being finalized.
The merger was finalized earlier this month, and Discovery wasted no time reducing its financial investment in the streamer, which included deep cuts to CNN Plus’ marketing budget.
On Thursday, Licht told staffers that CNN Plus had an “incredibly successful” launch, but that the service was not compatible with its long-term streaming strategy.
In separate comments, Perrette blamed CNN’s pre-merger executive team for launching CNN Plus before the companies combined.
“Some of this was avoidable,” Perrette said. “[But] prior leadership just decided to keep going.”
Subscribers will continue to have access to CNN Plus until April 30.