The initial investments that would play out over the next four years into CNN+ will reportedly be cut dramatically due to a low adoption rate.
According to Axios, CNN initially planned to invest around $1 billion in the streaming service over the next four years. The report also states that $300 million has been spent on CNN+, including a sizable marketing investment.
Nonetheless, that will change as hundreds of millions of dollars are expected to be cut from that original investment total. In addition, the company’s new leadership team still has yet to decide the ultimate fate of CNN+ since the network’s new boss, Chris Licht, will start on May 1.
With assistance from consulting firm McKinsey, CNN leaders initially expected to bring in around 2 million subscribers in the U.S. in CNN+’s first year and then gradually bring 15-18 million subscribers after four years.
Axios adds that the subscriber expectations will need to be dramatically reduced if the investments are cut. However, there might be some glimmer of help that can boost the numbers as CNN+ launched this week on Roku, one of the largest smart TV companies in the country, which should help boost subscriber numbers.
Nonetheless, there is some criticism from within, as one top executive stated that there is a sense of disorder internally as to why the cable news channel didn’t move the launch of CNN+ until after the Discovery merger.
The same source told Axios that the debut of CNN+ felt hurried to stake a claim over the streaming service and the network’s future ahead of the merger.
Eduardo Razo is the Assistant Content Editor for BNM, which includes writing daily news stories on the news media industry. He can be found on Twitter @eddierazo_ or you can reach him by email at eddie1991razo@gmail.com.
