• by Karlene Lukovitz  @KLmarketdaily, March 3, 2022

Some specifics about the pricing and business model of WarnerMedia’s much-hyped CNN+ streaming service finally have emerged. 

The service is set to bow in the last week of this month and will initially offer a promotional price of $2.99 per month, a rate that will be locked as long as those early subscribers have an active account, according to The Los Angeles Times. Once the promotion is over, CNN+ will be available for $5.99 per month — matching the price of Fox News’ Fox Nation streaming service. 

The plan also calls for eventually offering a lower-priced, ad-supported version of CNN+, and offering the service as part of a bundle with HBO Max, per the report. 

WarnerMedia announced the coming launch of the service last July, indicating first-quarter 2022 timing, and has promoted the types of programming it will offer and some of the big names to be featured. But more specific timing and any information on pricing have yet to be revealed.

CNN+ will offer eight to 12 hours of daily original programming, including live and on-demand. The news content will feature newly recruited high-profile on-air journalists including former Fox News host Chris Wallace, former MSNBC host Kasie Hunt and NPR star Audie Cornish, as well as presenting existing CNN cable journalists such as Wolf Blitzer “in a whole new way.” The streamer will also offer a library of original content, such as “Anthony Bourdain: Parts Unknown” and “Stanley Tucci: Searching for Italy.”

WarnerMedia, which does not want to alienate its linear TV network partners by appearing to cannibalize that audience, has stressed that CNN+’s content will be “separate and distinct” from the cable channels, which include CNN International, HLN and CNN en Español, as well as flagship CNN. Also, pay-TV provider agreements reportedly would limit CNN+’s ability to offer a live stream of its linear network to standalone streaming subscribers.

CNN+ — which has been described as WarnerMedia’s “lifeboat” strategy to help attract subscribers for the HBO Max bundle as viewers increasingly shift from traditional pay TV to streaming — will not have its own separate app. Instead, it will be offered as a separate purchase, or an optional add-on purchase for pay-TV subscribers with access to CNN — within a single CNN app.

The CNN app will fully integrate CNN’s linear channels, enabling pay-TV subscribers to access the brand’s linear TV feeds and providing the “full TV Everywhere” experience — a replacement for CNNgo, which will be sunsetted for users of desktop, mobile and some streaming platforms at CNN+’s launch, according to the CNN+ website. (CNNgo will, for a time at least, remain on some “select” streaming platforms.)

“If CNN+ is supposed to be the eventual off-ramp for CNN to get out of a dwindling business, not having it as a stand-alone makes us feel like we’re just kind of in this broader Discovery-WarnerMedia world, an unidentified CNN journalist recently commented to The New Yorker. 

A spokesperson for WarnerMedia’s direct-to-consumer business did not return a MediaPost request for comment on CNN+’s being part of the CNN app.

WarnerMedia/CNN invested $120 million last year and hired 400 new employees for CNN+, sources told the L.A. Times (which noted that a CNN spokesperson said the investment was under $100 million), and the streaming service “will likely cost several hundred million to operate this year.”

A just-published article in Financial Times asserts that WarnerMedia expected to invest about $350 million on CNN+ and the digital business — a budget purportedly not initially disclosed to Discovery. 

The fate of CNN in general and CNN+ in particular under the new ownership has been a topic of speculation since the merger was announced last year, and speculation has intensified since CNN anchor Chris Cuomo and longtime CNN President Jeff Zucker were recently forced out, and the network's chief marketing and communications executive, Allison Gollust, resigned soon after. 

WarnerMedia chief Jason Kilar has stated that Chris Cuomo, Zucker and Gollust violated the company's policies, including CNN’s news standards and practices, without explaining how. (The complex and still somewhat murky circumstances have been explored in a recent New York Times article and the previously mentioned New Yorker piece, among others.) 

David Zaslav, CEO of Discovery and soon-to-be CEO of Warner Bros. Discovery, on Monday named Chris Licht, currently executive producer of “The Late Show” with Stephen Colbert, to replace Zucker. 

Licht has been described as having a “no-nonsense” approach and as likely to push CNN to move away from opinion and toward more straight news — an approach reportedly also favored by John Malone, who will be one of the new entity’s largest shareholders and have a seat on its board, and is also said to be a key advisor to Zaslav. 

But Zucker, who was also said to be close to Zaslav, was considered an important advocate for CNN and CNN+. 

Given that the new company will have more than $50 billion in debt, it’s believed that Zaslav will have to make billions in cuts. “These cost savings might prove especially painful for CNN, a relatively small asset,” noted The New Yorker. “The network brought in $1.7 billion in revenue in 2020, according to estimates; that same year, HBO earned $6.8 billion.”