CNN’s new streaming service, CNN+, is expected to experience dramatic cuts in investments and projections, sources told Axios.
The company will lose hundreds of millions of dollars from its original $1 billion investment, Axios reported. CNN executives initially expected around 2 million subscribers in the first year and 15-18 million in four years, which will have to be cut with the investment.
Nearly $300 million has been spent on the service, Axios reported. It is unclear if CNN+ executives, including boss Andrew Morse, will stay with the service after investment cuts.
Hiring at CNN has been frozen for six weeks as its parent company, WarnerMedia, plans to merge with Discovery, the outlet reported. An executive said there is “confusion” as to why CNN launched the streaming service before the merger.
Earlier reports hinted at the streaming service’s expected flop due to low subscription numbers and likely upcoming layoffs in May.
Warner Bros. CEO David Zaslav has been pushing for the merger this week, the outlet reported. A new board met for the first time Monday to discuss resolutions, charters and bylaws to combine the two companies. Zaslav also met with CNN’s new upcoming president, Chris Licht, at the network’s Washington bureau.
WarnerMedia has lost several executive and laid off workers since its merger with AT&T in 2018, the outlet reported. Many executives announced their departures from the company last week as the merge is in the works. The merger between WarnerMedia and Discovery is close to $59.7 billion. (RELATED: ‘People Don’t Watch CNN’: Howard Stern Slams Network, Wonders Why Chris Wallace Would Leave Fox News)
CNN+ layoffs were first predicted in late March back when the service was first launched unless subscription numbers picked up.
““@CNNplus employees bracing for layoffs possibly as soon as May amid projections of lackluster sales of new streaming channel; CNN employees say new streaming channel could be merged into larger @discoveryplus as early as May unless subscriptions pick up to 130,” Fox Business senior correspondent Charles Gasparino said in a March 30 tweet.
Breaking: @CNNplus employees bracing for layoffs possibly as soon as May amid projections of lackluster sales of new streaming channel; CNN employees say new streaming channel could be merged into larger @discoveryplus as early as May unless subscriptions pick up 130 @FoxBusiness
— Charles Gasparino (@CGasparino) March 30, 2022
The streaming service plays live and on-demand programs hosted by Anderson Cooper, Poppy Harlow and former Fox News anchor Chris Wallace, who announced his new gig at the network in December.