Warner Bros. Discovery has announed its planned shutdown of CNN’s recently launched streaming service, according to information leaked by the Wall Street Journal.
CNN+ was launched at the end of March and yet, in a strange twist of events, is scheduled to stop operations on April 30, the Journal reported. New CNN Chairman and Chief Executive Chris Licht announced the decision to company staff on Thursday morning. According to the report, formal announcement is expected this week.
“While today’s decision is incredibly difficult to make, it is the right one for the long-term success of CNN,” Licht said. “It allows us to refocus key resources on the core products that drive our singular focus: further enhancing CNN’s journalism and its reputation as a global news leader.”
Mr Licht and JB Perrette, the head of global streaming at Warner Bros.Discovery, organized several meetings over the previous couple of weeks as they attempted to create a strategy for the service.
In a meeting with CNN staff on Thursday, Mr Licht was quoted as saying that attempting to launch CNN+ was like a builder constructing a house without being allowed to speak to the intended owner.
“Then the new owner walked in and said, ‘what a beautiful house! But I need an apartment,'” Licht said. “And that doesn’t take anything away from this beautiful house you built. I am proud of it, and I am proud of this team, and I am gutted by what this means for you.”
Mr Perrette weighed in and referred to Discovery’s “painful history” launching similar small streaming services- with a focus on cars, food and golf- saying they carried high costs to market and had limited audiences.
Many executives at Discovery thought CNN+ had a slow start, with as few as 10,000 people using the service at any given point in time. Despite this, an anonymous source reported that the service had roughly 150,000 paying subscribers and was on track to hit the network’s first-year goals.
The shutdown is a shocking end to a venture into which tens of millions had already been invested. For the recently hired team at CNN+, the plot only thickened after the former CNN president Jeff Zucker was forced to resign under pressure in February following his admission of an inappropriate romantic relationship with a close colleague.
The report also goes further to indicate that Andrew Morse, the executive in charge of CNN+, will be leaving the company. The move comes just a few weeks after Discovery finalized its acquisition of WarnerMedia from AT&T (ticker: T), leading to the creation of Warner Bros. Discovery (ticker: WBD), which officially started trading on the Nasdaq on April 11.
In a memo, some of the content on CNN+ will be migrated to other platforms owned by Warner Bros.Discovery, said Licht. Warner Bros.Discovery is under pressure to repay an eye-watering $155 billion debt, which is an indication of some penny pinching for the company within the near future.
Warner Bros. Discovery stock dropped 8.2% to $21.12.