The new parent company of CNN has suspended all external marketing spending for the subscription streaming service and laid off CNN’s chief financial officer amid flagging early viewership totals, sources informed Axios.
As WBD moves to cut up to $3 billion in costs by eliminating redundancies in the newly combined company, CNN’s chief financial officer Brad Ferrer has also been ousted, and high-level positions are on the chopping block, the outlet reported. A spokeswoman for CNN+ did not immediately respond to an inquiry on the matter.
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CNN+ launched on March 29, just weeks before the April 8 closing of the $43 billion merger between Discovery and CNN parent company WarnerMedia, which spun out of AT&T.
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Some observers considered the hasty launch as a move to preserve turf and budgets for the streaming service, which CNN had originally planned to turn profitable within four years by investing $1 billion into its growth. But the early subscriber numbers have been less than promising, with just 150,000 paying customers so far, according to Axios. Within Discovery, execs were reportedly frustrated that the CNN+ launch wasn’t delayed until the merger closed, which would enable the new company to incorporate the service into its broader streaming strategy. WBD, led by Discovery CEO David Zaslav, is interested in pursuing a streaming strategy centered on HBO Max rather than multiple niche subscription services.
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Under this plan, some CNN+ shows would be incorporated into the tentpole HBO Max service, while other CNN+ programming could be found in CNN’s free app.
Discovery also has its own streamer, Discovery Plus, which will also reportedly be merged into HBO Max. Execs seem to feel consolidation is the right move in the fractured streaming market and want to offer a premier combined service rather than multiple niche streamers competing for subscriber dollars.
To date, CNN has reportedly spent about $300 million on launching the CNN+ service and made hundreds of hires. New CNN boss Chris Licht will not start until May 2, and his plans for the streaming service remain unclear. After being announced as Zucker’s successor, Licht penned a memo to his future staff that teased changes the exec plans to implement once in the big seat. "I look forward to getting to know all of you and hearing your candid thoughts and feedback," Licht wrote.
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