20 APR 2022

CNN+ is facing steep cost cuts as Warner Bros. Discovery reorganizes

CNN’s new streaming service CNN+ is under review by incoming corporate parent Warner Bros. Discovery as it looks to cut costs and reorganize the company.

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CNN’s new streaming service CNN+ is under review by incoming corporate parent Warner Bros. Discovery as it looks to cut costs and reorganize the company, sources told The New York Post. According to the journal, Warner Bros. Discovery, which formed last week out of the merger between Discovery and WarnerMedia, is in the process of shoring up at least US$3 billion in cost savings in 2023, and it is focusing on CNN+.

As part of its review of CNN+, which has roughly 150.000 subscribers, Warner Bros. Discovery is suspending all external marketing spend, according to a report from Axios titled “CNN+ looks doomed.” The publication said CNN’s original plan to become profitable in four years by investing US$1 billion in the service is being “knee-capped,” citing plans to eliminate high-level positions across WarnerMedia.

For example, the new leadership has replaced CNN’s CFO, Brad Ferrer, with Neil Chugani, Discovery's current CFO for Streaming and International, as part of a broader finance team restructuring. Other high-level positions at WarnerMedia across different business functions are likely to be eliminated to cut costs and streamline leadership in coming weeks.

Warner Bros. Discovery wants to eventually build one giant service around HBO Max. Aside from general cost-cutting, David Zaslav, CEO of WBD, has been vocal about combining its various streaming services in one place and building it around HBO Max, a fact that could jeopardize continued investment in CNN+, a source told The New York Post.

Under previous ownership, CNN+ executives were hoping to attract 2 million subscribers in the first year and 15 million to 18 million over four years, Axios noted. Roughly US$300 million has been spent and hundreds of jobs have been created to support the streaming service to date.