CNN+’s Unrealistic Projections Contributed to Closure by Warner Bros. Discovery Execs
Less than one week after the newly merged Warner Bros. Discovery announced that they would be shutting down their upstart news streaming service CNN+ after just roughly one month on the air, Axios’ Sara Fischer is providing some behind the scenes details about the streamer’s financials in Tuesday’s Axios Media Trends newsletter.
Despite the fact that the WarnerMedia executives behind CNN+ were forecasting that the streaming service would become more profitable than the network’s cable channel by 2030, Discovery’s execs — led by President and CEO David Zaslav and Senior EVP and CFO Gunnar Wiedenfels — did not share in the optimistic outlook. CNN’s cable operations currently generate approximately $500 million in annual profit.
According to Fischer, Discovery did not believe that CNN+ would be able to reach profitability in any timeframe that made the continued, excessive expenditure of cash worth the investment. The streamer was projecting a loss of $1 billion in annual operating costs before the platform could even begin to break even in 2025.
CNN+ Revenue Projections
- 2021: -$100m operating profit ($0 revenue)
- 2022: -$400m operating profit ($100m revenue)
- 2023: -$300m operating profit ($300m revenue)
- 2024: -$200m operating profit ($600m revenue)
- 2025: $0m operating profit ($900m revenue)
- 2026: $200m operating profit ($1b revenue)
- 2030: $800m operating profit ($2b revenue)
Source: CNN Presentation via Axios
In a call with analysts on Tuesday, Zaslav and Widenfels said that CNN+ was the first cut that they made to the combined WBD properties, but it might not be the last.
For Discovery, CNN+’s numbers seemed untenable as the projections appeared to be based on rather optimistic assumptions about how quickly the service would catch on. CNN+ believed that they would grow to 30 million worldwide subscribers — or 41.7% of the entire addressable market — by appealing to three core groups: “CNN super fans,” “news and non-fiction SVOD (subscription video on demand) fans,” and global news consumers.”
CNN+ Subscribers Projections
- 2022: 2m subscribers
- 2024: 12m subscribers
- 2026: 19m subscribers
- 2028: 24m subscribers
- 2030: 29m subscribers
Source: CNN Presentation via Axios
Despite being internal conflict over whether or not streaming customers would be willing to pay for news, reports indicated that anywhere from 4,000 to 10,000 people used the service in its initial weeks, which clearly didn’t inspire confidence from Zaslav and his team.
Another one of the major issues behind Warner Bros. Discovery shutting down CNN+ is that the streamer had a much different outlook as to what it wanted the CNN brand to be than the new WBD executive team does. While CNN+ was built around personalities and interview shows, Zaslav is dedicated to returning CNN to its news-first, journalistic roots.
“We need great journalism and great facts to make the right decisions,” he said on Tuesday, “and advocacy networks that make a lot of money by generating and supporting an audience is a great business, but CNN is in the business of journalism first, and that’s what we’re going to fight for.”