CNN CEO reorients news channel around digital, streaming products

The new chief executive of CNN outlined plans this week to consolidate the news network's various editorial divisions into a single unit that will focus on its flagship television channels along with streaming and digital platforms.

The strategy was outlined in a memo sent to employees at CNN on Wednesday, according to an article published by the Wall Street Journal, which included an interview with CNN CEO Mark Thompson on the matter.

The move is intended to help CNN grow its business on the back of its digital and streaming platforms, as fewer Americans turn to cable news channels for their daily dose of national and political news.

To further its digital initiatives, CNN said it re-hired Alex MacCallum from the Washington Post to serve as the network's new top executive in charge of digital products and services. She previously worked with Thompson at the New York Times, where they launched products like NYT Games and NYT Cooking that helped the newspaper capitalize on its online platforms and steer away from relying on traditional newspaper advertising and subscription revenue.

CNN has experienced similar business-related woes over the years: While its website is one of the most-visited in the world, efforts to ride the wave of direct-to-consumer streaming have been less successful. The brand's boldest foray into streaming, CNN+, shut down less than a month after it launched once the network's parent company, Warner Bros. Discovery (WBD), determined the service was not in line with its overall business objectives. (MacCallum left CNN for the Post shortly after the service closed.)

Similarly, a move to integrate a linear feed of CNN’s U.S. and international programming into the streaming service Max drew the ire of satellite broadcaster DirecTV, who said the streaming channel — branded as CNN Max — likely violated certain terms of its carriage agreement on DirecTV's satellite and streaming services. (DirecTV is majority-owned by AT&T, whose shareholders also own a majority stake in WBD.)

CNN's push into streaming was necessitated in large part by the erosion of its core cable television audience as consumers move away from expensive pay television products for cheaper, online-only options. Last year, CNN placed last among the three largest cable news networks in terms of its daily average audiences, grabbing around 482,000 overall viewers and 95,000 in the key demographic of adults ages 25 to 54 years old (A25-54), according to Nielsen ratings. By comparison, the Fox News Channel's average daily audience was 1.22 million overall and 150,000 in the A25-54 group across the same time period, while MSNBC had 784,000 overall viewers and 87,000 in the key A25-54 demographic, Nielsen ratings showed.

The ratings demonstrate that CNN's overall objective of being a middle-of-the-road news broadcaster finds less favor among cable news audiences who prefer the comfort of their confirmation silos. On Wednesday, Thompson affirmed the same, saying some cable news viewers "simply don’t want to hear the other side, don’t want to hear it, and feel much more comfortable in an environment where typically they’re hearing people whose opinions are very close to their own."

In his memo, Thompson suggested CNN could find favor among digital audiences by embracing one of the elements that made it a household name in the first place: Covering big, breaking news events, and covering it well.

"But to succeed, we must abandon our preconceptions of the limits of what CNN can be and follow the audience to where they are now and where they will be in the years to come," Thompson wrote in the memo, a copy of which was published by the Hollywood Reporter. "We will still stand for the same things – video-led breaking news, delivered as it happens with honesty and insight – but with greater flexibility about the how and multiple new forms of monetization to complement existing revenues.

Part of that innovation will mean CNN needs to launch new linear products that complement CNN Max, Thompson wrote, and those products need to include "new monetization capabilities to access new sources of revenue."

Thompson didn't reveal any definitive plans for those new products, and he told the Journal that he wasn't convinced "that subscription is the right pathway for CNN." But he affirmed a willingness — and, indeed, a need — to embrace digital platforms like streaming as a core part of CNN's business, and not merely a supplement to its existing pay television channel, and to explore direct-to-consumer relationships.