CNN+: A Superfan Service or Main News Destination?

BY ALEX WEPRIN | HollywoodReporter.Com

Troy Warren for CNT

“Interactive” fare and access to talent will be a critical differentiator when consumers compare news streaming services, a source says.

Better late than never.

In early 2022, CNN plans to launch its entrant into the streaming news wars, CNN+, betting that its global reach, iconic brand and interactive features will help differentiate it in a crowded marketplace that already includes free streaming options from CBS News, ABC News, NBC News and MSNBC, and multiple subscription offerings from Fox News.

It also will likely arrive in time for the expected merger of CNN parent company WarnerMedia and Discovery Inc., a deal which is predicated on bringing together content from the combined entities to give it the scale it needs to compete with Netflix and Disney.

But its 2022 launch raises serious questions about its long-term future and strategy.

While Discovery CEO David Zaslav says they haven’t decided how they will handle the different streaming services they will operate after the merger (HBO Max, Discovery+, CNN+), there is a strong likelihood they consolidate in some form, either by merging into one service or by creating a bundle of services a la the “Disney Bundle,” which packages ESPN+, Hulu and Disney+ at $14 a month starting price.

“I think since CNN is among the best news brands in the industry and a destination channel for late-breaking news, they could make it as a stand-alone service, but Warner-Discovery could bundle it (or both),” says industry consultant Brad Adgate. “What Disney has done with ESPN+ (another strong cable brand) as both a stand-alone and as a bundle with Disney+ & Hulu could be a model to copy.”

In fact, during a press conference with reporters after the deal was announced, Zaslav mentioned ESPN+ as a potential model to follow.

“You take a look at what Chapek and Bob Iger have done, they’re doing a bundling strategy that’s quite compelling, it’s working very well for them,” Zaslav said. “There are other strategies of creating a super pack and, and that’s also working, working very well.”

“We will have the flexibility in the U.S. and around the world, to determine how we create the ecosystem around this extraordinary IP,” he added. “Whether we offer it in the bundle or whether we offer it together, that’ll be something that we’ll be working on, and we’ll see over the next few years as we learn more about what consumers want and how they want it.”

Until then, however, AT&T and WarnerMedia are continuing on their own strategic path, with regulatory review pre-empting much strategy talk. A CNN source says that AT&T leadership has been heavily involved in prepping CNN+.

“We’re going to continue to execute the very plans that we have in place and nobody is going to be waiting around for direction or waiting for changes in signals,” AT&T CEO John Stankey told analysts after the merger was announced. “We have a plan. These plans are important.”

CNN+ can trace its origins to “NewsCo,” a “news and information platform” that the company announced in April 2020, at the height of the novel coronavirus pandemic. CNN acquired Canopy, a “personalization architecture company,” with its team joining CNN and developing the technology that will ultimately be incorporated into CNN+.

CNN will over the coming months hire some 400-450 people dedicated to CNN+, with about half working on business and product, and the other half working on content, according to someone familiar with the plans.

But CNN+ will also be entering a marketplace with a plethora of free and paid news options.

On the free side, CBSN has grown over the past 6-plus years to have a full schedule of live programming, supplemented by specials and local versions. ABC News Live is building out its live programming lineup, NBC News has a number of free streaming options available, including the services NBC News Now and Today All Day, while Fox News is planning to launch a free Fox Weather streaming service later this year.

On the paid side, NBC News and MSNBC have additional exclusive programming as part of Peacock, while Fox News has two paid options: Fox Nation, which includes replays of the cable channel’s primetime lineup, original programming and other lifestyle and documentary fare, and Fox News International, which streams the linear cable channel for international audiences.

But CNN+ will also be competing for hard-won subscription dollars from consumers, who may be forced to choose between CNN’s offering and, say, The New York Times or Washington Post, The Atlantic or the Los Angeles Times.

With so many news options, CNN is leaning into its brand in its streaming push, betting on hard-core news junkies and CNN superfans to pay up for access to its talent and experts. Indeed, one CNN source says they think the “interactive” fare and access to talent will be a critical differentiator when people cross-compare to other news streaming services.

When CNN acquired Canopy, the company said its new platform would connect “users to trusted sources, storytellers and creators across a wide range of topics,” using technology to help it do so. CNN+ will test the market for such an offering, betting that users may pay a bit extra to get a more personal experience with experts like CNN’s Dr. Sanjay Gupta, or Jake Tapper.

“What they are faced with right now is both a practical and a psychological and emotional challenge. So that when the flip comes, you have got a product that is worth watching, and worth advertising against, and worth subscribing to,” former CNN U.S. president Jon Klein told THR last month. “We saw how quickly the switch could be flipped with Disney. That is what the news networks be prepared to do as well.”

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By Troy Warren

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