When Ted Turner launched CNN in June 1980, it was initially mocked as the Chicken Noodle Network, Ted’s Folly and 24 Hours of Nothing. It would take several years and millions of Turner’s investment dollars until people began to see the value of the network’s round-the-clock coverage, especially during historic events like the Challenger disaster, the Gulf War, the 2000 election and Sept. 11. CNN changed how the world consumed news and ultimately paved the way for competing channels like Fox News and MSNBC.
Since those early days, the network has experienced plenty of fits and starts, but it will again try to reshape how people consume and share news worldwide, this time with a 24-hour live streaming channel called CNN Max, which will debut on Warner Bros. Discovery’s Max on Sept. 27 with a “beta” label. It will feature some of the network’s most popular US shows, such as “The Lead with Jake Tapper” and “Anderson Cooper 360,” broadcast CNN International programming and have four hours of exclusive content.
After the hasty launch and then cancellation of CNN+, which left hundreds of employees out of work, a $300 million writedown on the books and several media analysts scratching their heads, it’s fair to question the unveiling of a new CNN-branded streaming product just 16 months later.
Is it dumb? Is it Sisyphean? Is the company a windsock looking for direction?
It might take some time to get answers to those questions. But what is clear now is that the company understands its shaky predicament. Referring to a product as being in beta is not uncommon for tech startups, but it is far less common for a 43-year-old company with a universally recognised brand and a global audience.
Implicit in this designation seems to be CNN’s plan to iterate and innovate the product over the coming weeks, months and years. This startup mindset is an approach that CNN and news, more generally, desperately need.
As the network continues to be in a vortex of executive turmoil (Mark Thompson has just been named its next CEO), talent shuffling and frequent rumors of being spun off, CNN Max is probably the safest gamble on innovation it could have made after CNN+.
Last year’s failed streaming experiment was a free-standing product that consumers would have needed to subscribe to and pay for separately. Not only was the network hoping viewers would sample a new product, but it also wanted them to pay $5.99 a month or $59.99 a year for it. It might not seem like a lot compared with other streaming services, but between subscription fatigue and people looking for ways to cut their monthly expenses, it was a lot to ask of the public.
By contrast, CNN Max will offer consumers CNN’s core product — live news — with no incremental cost to Max subscribers. Rather than a new service that has to live and die on its own, CNN Max is being presented as an added benefit to Max users. It could also attract new subscribers to the streaming platform while helping the umbrella service retain existing customers.
It’s a large bet on the power of live news programming in a streaming age that has prioritised entertainment. If it pays off, CNN Max could increase Max’s average revenue per user, the primary metric of streaming service success. With the writers and actors strikes continuing and uncertainty growing around the future of original series, perhaps it’s a concept that will become popular with other streaming giants looking to salvage subscribers.
As rapid technological changes and consumer behavior have washed over the media landscape, legacy companies have been forced to continually adapt and refine their business models and strategies. For example, the New York Times, which was struggling just a few years ago, has quietly and deliberately adapted over the last several years from a stodgy legacy news brand into a user-friendly and growing digital product that includes news, sports, recipes, podcasts and puzzles. And just last month, Disney Chief Executive Officer Bob Iger publicly mulled a potential sale of Disney’s ABC network and the need for a strategic reevaluation of ESPN — Disney’s profit engine for decades.
When asked to describe cable television today, my students often use adjectives like “obsolete,” “old-fashioned” and “irrelevant.” One recently told me that if important news happened, the story would “find him.” That was his way of saying he doesn’t need to subscribe to a formal news source. They are part of the growing number of cord-cutters and cord-nevers, which, according to recent data from Statista, described 53 percent of households at the end of 2022. In 2021, it was 47 percent, and by 2025, the percentage is expected to jump to 75 percent.
CNN remains one of the most recognised news brands in the world, but if it is to continue to be a part of the global news conversation, it will need to innovate its content and distribution. CNN Max seems to be heading in the right direction. If it’s successful, it may be able to “find” my students where they are — on their phones and tablets. Moneycontrol