CNN+ Under Pressure To Justify Costs

Under pressure from new owner Warner Bros. Discovery Inc. to justify its costs, CNN’s streaming service eclipsed 100,000 subscribers in its first week, according to Bloomberg citing a person familiar with the matter.

The number for CNN+ is small relative to mass-market entertainment services like Netflix and Disney+, which have been around far longer, but suggests a favorable start for a news service in a business where only a handful of players top 1 million customers. The leader is the New York Times, with almost 8 million paying customers at year-end.

CNN has spent hundreds of millions of dollars to program and market the service, which executives describe as the news organization’s most ambitious new venture since the founding of the network more than 40 years ago. CNN+ offers a mix of lifestyle shows and traditional news, including a daily interview show from Chris Wallace and a food and travel show hosted by actress Eva Longoria.

The most popular shows thus far include Wallace’s and “5 Things with Kate Bolduan,” a fast-paced countdown of the day’s big events, said the person, who asked not to be identified discussing numbers that aren’t public. CNN charges $5.99 a month for the streaming service, the same as Fox News’ paid streaming service. Fox Corp. hasn’t said how many people pay for Fox Nation.

CNN declined to comment on the subscriber number. “We continue to be happy with the launch and its progress after only two weeks of being available to customers,” a spokesperson for the network said Wednesday in an email.

The pressure on CNN+ stems in part from last week’s merger of Discovery Inc. with CNN parent WarnerMedia, creating the new Warner Bros. Discovery. The streaming service launched on March 29.

Discovery borrowed $30 billion to complete its deal with WarnerMedia, and has pledged to find $3 billion in synergies from the combined company. The projected budget for CNN+ is one likely source for cuts, according to reports in Axios and CNBC.

The streaming service was a priority for former CNN chief Jeff Zucker, who wanted to position the network for a future where most people watch TV online instead of via cable and satellite providers. Zucker left the company earlier this year due to an inappropriate relationship with one of his chief lieutenants, and Chris Licht, executive producer of the “The Late Show With Stephen Colbert,” will take over as the new head of CNN in May.

Licht was recruited by David Zaslav, who led Discovery and became chief executive officer of the new Warner Bros. Discovery when the merger was completed last week. Zaslav plans to bundle the company’s other streaming services, HBO Max and Discovery+, into a single package with a new price. Late last year, he pared high several high-cost projects from the budget of Discovery+.

The question is whether Zaslav will show patience.