As CNN struggles to gain share on cable TV, the company’s new CEO is reportedly looking into new subscription models, as the way consumers get their news is transformed by the rise of digital media subscriptions.
As The Wall Street Journal reported, CEO Mark Thompson sent out a memo Wednesday (Jan. 17) that outlined plans to consolidate the network’s TV, streaming and digital presences. Thompson told the business news outlet that the company’s efforts to monetize these channels could focus on subscription programs.
“Alex MacCallum … will join us in March as EVP, Digital Products and Services, and she will lead a team more single-mindedly focused on developing the products and the subscription and other relationships with users that will make CNN once again indispensable to younger, as well as well as older audiences, and secure our economics into the future,” Thompson said in the memo, which Deadline published in full.
Overall, consumers’ media diets are shifting away from traditional cable, with consumers dropping their cable and pay TV subscriptions by the millions each year.
“Cord cutting started in 2008 — right around the time of the Great Recession — and slowly gained a head of steam as millennials, mostly, gravitated to the streaming content that they could access on their laptops or connected TVs — and soon thereafter, their smartphones,” PYMNTS’ Karen Webster observed in a feature in October. “Netflix and specialty websites filled the news and entertainment content gap with better content delivered via new and cheaper business models. The ranks of the cord cutters rose.”
More news networks have been getting into streaming and adding new subscription services. In November, for instance, British broadcasting giant the BBC launched its BBC Podcasts Premium offering in 166 additional countries.
Granted, CNN has something of a spotty past with subscription models. In 2022, the short-lived CNN+ shut down one month after launching following the merger of WarnerMedia and Discovery.
In times of economic distress, however, consumers do not want to add more digital media subscriptions. The report “The One-Stop Bill Pay Playbook: Drivers of Consumers’ Bill Payment Priorities,” a PYMNTS Intelligence and Mastercard collaboration based on responses from more than 2,100 U.S. consumers, revealed that only 22% would prioritize paying their digital media subscription bills in full above others. Meanwhile, 20% would skip payment on their digital media bills until they could afford it, 20% would only pay a portion of the bill, and a whopping 38% would cancel the service.
Additionally, recent reports show that roughly 1 in 4 U.S. subscribers to major services like Netflix, Hulu and Disney+ have canceled at least three subscriptions in the last two years, and streaming service cancellations have been on the rise.
As CNN explores new subscription models to adapt to the changing landscape, it faces the challenge of convincing consumers to prioritize digital media subscriptions amid economic uncertainty.
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