CNN+ The Latest Roadkill In Streaming Video Wars

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x losing 200K subscribers was the big news in tech on Wall Street yesterday, but today’s shocking news is that subscription streaming service CNN+ is shutting down less than a month after its launch. The service debuted at a $5.99/month price point, but initial subscribers were given a 50% off lifetime discount.

However, after the Warner Bros. merger with Discovery Communications closed, all external marketing was halted so the service appeared to be doomed from the get-go.

Axios reported that only 150K people signed up for the service through April 19. The company had planned to spend $1 billion on CNN+ which wasn’t expected to be cash flow positive for four years.

Part of this may have been due to the economy—inflation just hit a 40-year high at 7.9%—but it’s likely due in large part to the fact that free news is everywhere. It would be difficult to justify paying a monthly fee for news even though CNN+ had hired big name talent like Audie Cornish, Kasie Hunt and Chris Wallace.

The decision must have been difficult for incoming CNN Chief Chris Licht (showrunner and Executive Producer of “The Late Show With Stephen Colbert”, who called an all-hands on deck meeting today with staff to announce the decision. It appears that some of the content being developed for CNN+ will survive, but it will be via a free streaming service.

“While today’s decision is incredibly difficult, it is the right one for the long-term success of CNN,” said CNN president Chris Licht, who does not officially start until May 2 but has been advising Warner Bros. Discovery CEO David Zaslav on the strategy of CNN.

The service had already blown through $300 million in cash and will now have to give pro-rated refunds to the few existing subscribers to the service. The sum is not insignificant—CNN+ was estimated to spend over $500 million in its first year of operations, more than half of the annual programming budget of CNN itself.

The decision calls into question the future of Fox Nation, Fox News’ streaming service which is also priced at $5.99 per month. They may be more successful in gaining subscribers than CNN+ because it has cut deals with multichannel services like Comcast
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and Cox, as well as being promoted by Amazon Fire TV, Android, Apple
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iOS, Apple TV, Google Chromecast, Roku, Samsung smart TV, Xbox One and Vizio smart TV.

Licht provided employees with a bleak outlook for the streaming market in general, saying at the staff meeting, “In a complex streaming market, consumers want simplicity and an all-in service which provides a better experience and more value than stand-alone offerings.” Andrew Morse, the head of CNN+ has resigned from the company.