CNN’s Brian Stelter unpacked the turbulent week for major media companies, starting right at home with CNN+, which the “Reliable Sources” host said Sunday was doomed from the start because of the timing of its launch the plans of its new owner, Warner Bros. Discovery.
Less than a month after the launch of CNN+ — a subscription video streaming news service offshoot of CNN — Warner Bros. Discovery abruptly shut it down, a “u-turn” that “was front-page news, stunning news, and painful news for everyone involved,” Stelter said, adding, “Years of development possibly down the drain. Some of the shows may never be seen. Hundreds of staffers may be laid off, though the company is trying to place many of them in new jobs.”
But, he said, the streaming service was “doomed” from the start.
“Amid these bruising headlines, folks are trying to make sense of it. Some partisans are leading a predictable talking point that it’s about politics. But the truth is, this was a corporate move,” he said. “This CNN+ service was doomed because of the timing of a merger and clashing streaming strategies. The new owner, Warner Brothers Discovery has big plans to combine multiple streaming platforms to make one big challenger for Netflix.”
Axios reporter Sara Fischer agreed with Stelter’s assumption that the new company assessed the streamer as a potential business loss after Jeff Zucker resigned in February.
“After CNN’s head Jeff Zucker exited…executives at Discovery were questioning whether CNN+ fit in within their strategy,” Fischer began, pointing out that those new execs wanted a large competitor for Netflix, but that they saw CNN+ as just a small subscription service.
“They thought ‘this is too expensive; it might not ever get to profit on time, and it doesn’t fit in with what we want to do,’” she said. “’It’s better to cut it off now than to keep it lagging for months while they decide.'”
The merger placed AT&T’s Warner Bros., CNN, Turner and Discovery’s stable of cable networks under one massive roof — as well as streaming services Discovery+ and HBO Max, possibly giving the combined entity a fighting chance of moving into competition with Netflix and Disney+ among the leading streaming services.
The deal also combined WarnerMedia’s U.S. sports rights, including those with the NBA, MLB and March Madness, with Discovery international sports giant Eurosport.
The new company headed up by CEO David Zaslav has an estimated worth of $130 billion.
“With our collective assets and diversified business model, Warner Bros. Discovery offers the most differentiated and complete portfolio of content across film, television and streaming,” Zaslav said in a February statement about the merger. “We are confident that we can bring more choice to consumers around the globe while fostering creativity and creating value for shareholders.”