5 Valuable Lessons From The Abrupt Failure Of CNN+

The shocking news last week that Warner Bros. Discovery was shutting down CNN+ just a month after launch inspired a lot of speculation over whether this was a sign of an imminent shakeout in the streaming industry, fallout from a mega merger, or a symptom of a poorly executed vision.

The answer appears to be bits of all three. It’s likely no coincidence that CNN+ folded right after Netflix
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, the biggest streamer in the game, announced its first decline in subscribers in a decade. Clearly the streaming industry is headed for some bumps and bruises, but market saturation is not the only reason the news service failed.

“Streaming’s first act was all about cord-cutting and content finally catching up to consumer preferences. But, pandemic-related or not, Netflix’s numbers, on top of Roku’s in February, show a pull back and the end of that first act,” said Tal Chalozin, co-founder and CTO of Innovid, a connected TV and advertising measurement platform. “We’ve now entered act two, which will be vastly different.”

Media experts say other companies can learn from what happened with CNN+. Here are five takeaways from the service’s failure.

1. Lock up connected TV deals

People watch TV on TV, said the experts surveyed. CNN+ initially launched without a deal with Roku, one of the most popular platforms for streaming services, and wasn’t available on Android TVs. By the time the service joined Roku on April 11, Discovery leadership was reportedly already skeptical of the service’s prospects.

2. Do due diligence on subscription fatigue

It’s still too early to say if the recent news about subscription drop-offs for Netflix means a greater subscription fatigue or is a blip—or is possibly an issue exclusive to Netflix. But Sushil Prabhu, CEO and chairman of Dropp, warns that companies should figure it out.

“CNN+ could have avoided the shutdown outcome by better understanding the consumer pulse of subscription fatigue,” he says. “The digital market’s incredible growth over the past three years is to blame — almost every month, a new digital content service launches online that offers consumers more choices than ever, and that’s before selecting music, video, news, podcast or gaming digital service options.”

3. Don’t blame the all-news formatr. Dustin York, an associate professor of communication at Maryville University, says a knee-jerk response would be to blame the all-news format for CNN+’s failure. He thinks that would be a mistake. He believes there’s room for an all-news streaming service and says companies shouldn’t be put off by the Warner Bros. Discovery failure.

“I believe the news idea is a win,” he says. “The idea that we can take hard-hitting journalistic news and not be chained to commercials every 10 minutes says something. Look at John Oliver on HBO. He goes really deep into an issue and doesn’t have to throw into commercials every 10 minutes. So I do believe in the model of a news subscription. Companies shouldn’t be worried. It just needs to be wrapped up differently.”

4. Protect the greater brand

York also notes that CNN could experience some blowback from the shutdown, which could taint the brand. He says Warner Bros. Discovery would be wise to handle it proactively, suggesting it should position CNN+ as a product failure, not a brand mishap. After all, even Apple
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won’t hit the mark with every product launch. CNN can weather a mistake made from innovation much better than a mistake made from ignorance or hubris.

“The thinking internally may be this is a blunder of the parent company than CNN, but consumers don’t think about that. They see CNN as a brand, and most people think CNN owns itself. The PR side needs to be concerned about what is CNN’s brand right now,” York says.

5. Roll out your top names sooner rather than later

When CNN+ shut down, it still hadn’t even launched shows by high-profile hosts such as Eva Longoria and Audie Cornish. While that may not have saved the service, coming out swinging with high-profile content, as Disney+ did in launching Star Wars and Marvel series early, is a safer approach.

“Consumers expect billion-dollar, quality content every week, and Netflix started that expectation,” York says. “If I’m a service now, I’m thinking how I can come out of the gate strong using all my intellectual property. If Netflix had started in today’s market, it would have failed—no one would have given them time to flesh out Orange Is the New Black or Stranger Things. It’s so much different nowadays.”