Movies

CNN finds itself at a digital crossroads after years of turmoil

BBG News

Back in 1980, I, being a passionate movie buff, found myself at the forefront of television history when Ted Turner launched CNN. He made it clear that the ‘C’ in CNN wasn’t just any letter – it represented cable, making our channel the pioneer to be named after the burgeoning TV delivery system.

Over four decades on, the pay TV industry – a significant revenue source for CNN – is rapidly declining. With this in mind, the current chairman of CNN, Mark Thompson, is focused on navigating the network towards a cable-free future.

Thompson’s strategy arises following decades of ownership transitions, leadership reshuffles, workforce reductions, dwindling television viewership ratings, and a diminished sense of the network’s previous assertive demeanor during its confrontations with the initial Trump administration. CNN also encountered public reproach from David Zaslav, CEO of its corporate parent Warner Bros. Discovery, who advocated for inviting more Republicans on air.

Last month, Thompson decided to start fresh by revealing plans to reduce his TV team workforce by 200 employees and invest $70 million into innovations tailored for digital media consumers. Previously serving as an executive at BBC and The New York Times, Thompson described these actions as a strategic response to the significant and permanent changes in how Americans access news.

CNN leaders have understood for some time now that they need to embrace a world beyond cable television. In 2022, they introduced a direct-to-consumer subscription service called CNN+, which was seen as the company’s future direction. However, changes in ownership halted this initiative, and it’s now up to Thompson to revitalize it. He revealed that CNN plans to launch a new product focused on lifestyle topics later this year and also create a news stream tailored for digital viewers.

Thompson aims to achieve a $1 billion income from digital sources by the year 2030, as traditional pay TV subscriptions are dwindling, impacting their consistent income flow. In recent years, CNN has experienced ratings drops, attracting fewer viewers than Fox News and MSNBC, which has resulted in a significant 50% reduction in revenue between 2021 and 2023. Despite reaching its highest profits in 2020, the company saw a decline after that peak year.

CNN’s digital transformation is taking place after several body blows to its public image.

Previously, Jim Acosta, a well-known CNN journalist recognized for his challenging approach towards President Trump, chose not to join his team for the late-night shift last week and departed from the network instead.

On January 17th, the network was compelled to shell out millions as part of a settlement for a defamation claim brought by a security consultant, who was implicated in an article published in 2021 about illicit war profiteers active in Afghanistan post-U.S. military withdrawal.

CNN continues to be a frequent target of criticism from President Trump and his political allies, who often use it as an example when attacking mainstream media. The term “fake news,” which Trump frequently employs, has been used in debates against CNN during legal disputes, such as the recent defamation trial.

Currently, Jeff McCall, a professor at DePauw University, suggests that their brand might be perceived as struggling or weakening due to recent circumstances. He points out the layoffs as an issue and notes that losing lawsuits for defamation adds to this negative image.

As a movie aficionado penning down my thoughts, I can’t help but notice the turbulent times gripping the traditional television industry – including CNN. The rise of streaming platforms has become a game-changer, with these services now dominating approximately half of all U.S. TV viewing hours. Concurrently, the subscription numbers for cable networks have been on a continuous downward spiral, making it increasingly challenging for established players like CNN to thrive in this evolving landscape.

Currently, conventional TV news is experiencing significant changes, as well-known anchors are either accepting salary reductions or choosing to leave their positions.

One experienced analyst at CNN put it this way: “The future won’t resemble the present financial system.” This individual is not permitted to speak publicly on the matter.

Inside CNN, spirits are low following recent layoffs, but some insiders express optimism about Thompson’s transformation strategy, given his past success at the New York Times – a news organization renowned for its thriving digital subscription service.

Hollywood Inc.

Lachlan Murdoch, the head of Fox Corporation, shared that they are developing a consumer-oriented product specifically designed for individuals who prefer streaming services over traditional cable (cord-cutters).

According to Jon Klein, a former CNN president with experience in leading multiple tech start-ups, Mark Thompson and his team are certainly entitled to trust. They’ve skillfully guided the BBC through the internet age and The New York Times into the digital subscription era.

The power of CNN lies in its swift reporting of breaking news and its capability to broadcast live images from various parts of the globe accompanied by insightful commentary. Yet, whether this strength extends to encouraging viewers to purchase non-news related products is uncertain.

Previously, The New York Times had built a readership accustomed to purchasing the newspaper for more than just the news, including features like puzzles and culinary recipes. Leveraging this preference, the organization turned these additional content areas into profitable digital spin-offs on their own.

CNN+, a short-lived streaming service, was developed to present a diverse selection of programming on topics like food, wellness, politics, and international affairs – leveraging its established expertise in these areas. The company invested $100 million into this project, bringing on board renowned personalities such as Chris Wallace, Audie Cornish, and Kasie Hunt. (Additionally, CNN attempted to recruit MSNBC stars Rachel Maddow and Ari Melber.)

Following a strong marketing push, Warner Bros. Discovery decided to shut down the service only nine days after acquiring CNN. In their efforts to swiftly lower their $54-billion debt, they found CNN+, led by its former president Jeff Zucker, an obvious place to start cost-cutting measures.

Following the shutdown of CNN+, Warner Bros. Discovery made available a CNN feed (largely sourced from its international channel) on their entertainment streaming platform, Max. This move sparked complaints from cable and satellite providers who pay fees for offering CNN to their subscribers, highlighting the delicate equilibrium in evolving a product for the future while still heavily reliant on a dwindling business model.

Based on sources privy to the plans, CNN+ was expected to launch by 2026, providing a streaming version of their linear channel. This move aimed to convert people who have abandoned traditional TV (cord-cutters) and those who never had it (cord-nevers), into digital subscribers. However, there’s no confirmed timeline for when this service will become available under Thompson’s leadership.

Thompson’s memo admitted that continuously viewing CNN on Max wasn’t a sustainable solution in the long run. However, the way CNN content performed on this service offered valuable insights about what could potentially thrive on a separate platform.

Previously employed CNN leaders remark that the strategy presented by Thompson in his January 23 memo bears a striking resemblance to the swiftly abandoned CNN+. In fact, Thompson re-hired Alex MacCallum, who held a respected interim chief digital officer role during CNN+’s launch. However, she and many others brought on for the service departed when it was shut down in 2022.

Currently, CNN boasts a substantial digital user base on CNN.com, and they’ve recently implemented monthly subscription fees for heavy users. In a statement, the company expressed optimism about the upcoming stages of their digital strategy. “Leveraging our strong brand, the exceptional talent we possess, and the culture of innovation and dedication that has always characterized CNN, we are confident that we have the right tools to ensure this esteemed news organization thrives,” a representative from CNN explained.

In the current climate, CNN must strive to expand its digital operations while simultaneously preserving its established TV broadcast. This challenging situation arises due to the significant influence of audience’s political affiliations on ratings. Navigating this turbulent terrain will be difficult for CNN, as their actions are under constant scrutiny by social media and conservative media outlets.

Acosta’s departure underscores the divisiveness CNN experiences. He was a well-known figure for his tough interrogations towards the Trump administration, an act that led to them revoking his White House press pass at one instance.

Acosta was requested to relinquish his daytime show and instead host a live, two-hour segment starting at midnight Eastern time, which is when most viewers are asleep. This late-night offer, considered non-negotiable by many within CNN and several CNN fans, was widely perceived as a concession to Trump, who swiftly expressed his joy over Acosta’s departure on social media.

Multiple commentators, including some former high-ranking CNN officials, contend that the network occasionally showed excessive enthusiasm in its persistent and sometimes critical reporting on the initial Trump presidency. Yet, it was during this period when CNN experienced peak audience engagement as it was perceived as a key player resisting Trump’s administration.

As fact-checking the president becomes more common, it’s also sparking claims of bias, making the situation even more contentious within our society.

Contrary to what some consumers might claim, they seem to prefer news with a touch of opinion rather than just straight facts, as indicated by Nielsen ratings. For instance, Fox News, known for its daily pro-Trump commentaries, has been the most watched cable network across all genres for eight consecutive years now. Even in breaking news coverage, which CNN was once renowned for, it’s Fox News that attracts the largest viewership these days.

Under Chris Licht’s short-term leadership at CNN, he responded to directives from Warner Bros. Discovery officials by attempting to attract more conservative viewers to the channel. This move resulted in a significant portion of the viewership departing, and since then, ratings have yet to bounce back. In 2024, MSNBC surpassed CNN in major news events such as election night and the Democratic National Convention for the first time in history.

As a movie buff, I find that CNN often leans heavily on Scott Jennings, a commentator who frequently mirrors Donald Trump’s viewpoints. Interestingly, he’s also been selected by Patrick Soon-Shiong, owner of the Los Angeles Times, to bring a conservative perspective to their editorial board.

A past executive at CNN refrained from commenting openly about their former workplace, but expressed that the challenge for the network lies in navigating between the “pro-Trump” and “anti-Trump” perspectives, as they both need to be handled delicately.

However, Klein contends that a digital overhaul offers CNN an opportunity to reinforce its worth among consumers once more. As he put it, “CNN has been an exceptional brand for much longer than they’ve struggled.” Inquiring about the meaning of CNN often elicits responses like, “outstanding breaking news coverage” and “they help me comprehend the world,” from a large number of people.

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2025-02-05 14:32

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