Charlie and Kyle have had oodles of fun kicking around the pathetic start of the likely short-lived subscription streaming service, CNN+. And CNN deserves all the grief they’re getting, for all the reasons Charlie and Kyle lay out, in great detail.
But I think this slow-motion-car-wreck media debacle also offers some useful lessons for any other media company thinking of starting a streaming service. It seems like every content-generating media company in Hollywood saw the success of Netflix, Amazon Prime, Hulu and Disney Plus and said, “hey, that looks profitable, we should do something like that!”
(Recall the short-lived streaming service Quibi. Meg Whitman, the former CEO of Hewlett Packard, is an extremely successful businesswoman, but it seemed a little odd that she served as CEO of Quibi, an entertainment company, because she said, when asked what her favorite shows were, “I’m not sure I’d classify myself as an entertainment enthusiast.” Ideally, the leadership of the company would have some interest in the sort of product the company creates!)
CNN has a news network, that gets fewer viewers than the network would like. It also has CNN international, reaching overseas audiences. It has the former Headline News channel, now HLN. And on top of all of that, it wanted to create a separate channel that people would pay extra to watch.
The thriving streaming services are all focused on entertainment, and all of them have some popular shows that cannot be seen anywhere else. Netflix has Stranger Things and Bridgerton. Amazon Prime has Bosch and The Marvelous Mrs. Maisel. Disney Plus has The Mandalorian and adorable Baby Yoda and the Marvel superhero shows. No doubt I’ve neglected to mention one of your favorites, but the point is that each thriving streaming service features at least a couple of shows that turned into hits, shows good enough to get people telling their friends, “yeah, you’ve got to subscribe, that show is really great.” And here’s the important part: those shows can only be seen on that particular subscription streaming service. At least for now, there is no network television or basic cable version of Stranger Things or The Mandalorian that is almost as good and available without a subscription.
The problem is CNN’s product is news. And almost all news is covered by multiple outlets, meaning you can get more or less the same thing from other video news services, for free. The annual State of the Union Address is the same, no matter which channel you watch. The footage from Ukraine is horrific whether you’re watching CNN, Fox News, or MSNBC. Maybe one network or another does a better, more thorough, or more viewer-enticing job of covering a particular story. But is the difference big enough that people are willing to pay for it?
To get people to shell out money for a streaming service that was primarily offering news, that streaming service would have to offer something really appealing that was dramatically different from everything else, and that couldn’t be watched any other way. Maybe a host like Tucker Carlson, with his 3 million viewers or so, could get a portion of his audience to shell out for a subscription. But you wouldn’t want to rely on just Carlson; a streaming news service would need a much bigger audience to be financially feasible, so it would have to assemble a bunch of the most popular figures in the news world, and then make it impossible to see them anywhere else. And even that would be a gamble. Ideally, a news-focused streaming network would build a subscriber base of the Tucker Carlson superfans and The Five superfans and the Rachel Maddow superfans and the superfans of some CNN’s most popular hosts and anchors – and figure out some way to develop its own stars.
I like Chris Wallace more than a lot of other conservatives these days, but I think it is clear that people won’t pay $59.99 per year just to watch Chris Wallace. They don’t miss him on Fox News Sunday that much. CNN+ offers live news and … an awful lot of stuff that looks like the programming on regular old CNN, available without a separate subscription – Anderson Cooper, Sanjay Gupta, Fareed Zakaria. I really enjoy, for example, Stanley Tucci’s culinary documentary series, Searching for Italy. But who’s going to pay sixty bucks a year to have it on demand? It airs on regular CNN!
The other angle worth noting is that while people are unlikely to shell out to watch a news-only streaming service, they might be interested in an entertainment streaming service that also had a news option. People who would never subscribe to CNN+ might be a little more tempted to subscribe to Amazon Prime over Hulu, or Netflix over Paramount Plus, if there was a high-quality news network programming attached.
And keep in mind who really owns CNN:
Discovery’s merger with WarnerMedia took effect on Friday afternoon, creating a streaming media giant led by CEO David Zaslav.
The deal combines two treasure troves of content and foreshadows further changes in the streaming era.
The newly formed company, Warner Bros. Discovery, will begin publicly trading on Monday. Zaslav said he will hold a town hall event for employees of the combined company later in the week.
…Setting the stage to compete with the likes of Disney and Netflix, Zaslav said in Friday’s memo that “we are well positioned to become a top-tier streaming competitor.”
He confirmed that the main streaming services from each side of the company, HBO Max and discovery+, will be brought “into a single product in the future.”
CNN+ isn’t likely to be around for long, at least as a separate entity. But at least some of their programs and shows are likely to be added to the merged HBO Max/Discovery+ streaming service.