July 20, 2021

We Don’t Need More Streaming News Platforms

If there is one thing you can always expect from media companies, it’s that they’ll all hop on the same bandwagon at some point. CNN is no different. According to Variety:

CNN disclosed the first details of its long-awaited new subscription streaming service Monday, which will launch in the first quarter of 2022 with 8-12 hours of original live content each day.

A network representative confirmed the disclosure in a press release that characterized CNN Plus as a venture “that complements the core CNN linear networks and digital platforms to serve CNN superfans, news junkies and fans of quality non-fiction programming.”

Morse revealed that CNN is looking to hire 450 people in the next 6-9 months to support CNN Plus, which he also said would be looking to experiment in programming formats that blur the line between news and entertainment.

You have to admire a team that takes a big swing. The company currently has 3,000 employees worldwide, so it is effectively growing the team by more than 10%. Unfortunately, it’s an idea that I believe will fail.

Despite the talking points that this would be a neutral news platform, for CNN to convince millions of people to fork over $5-10 a month, it’s going to need to generate a specific type of content. That means it’ll need to lean into the “always Trump, all the time” coverage that was its best friend when he was in office.

This is what Substack and other subscription-only proponents don’t understand about paywalls. People are less likely to pay for information that they disagree with, especially if it is a community of people that are being entertained by said information. A streaming platform for news is for the diehard audience looking for even more self-reinforcing news.

The problem with this strategy is that fewer people care anymore. I have a couple cases in point.

First, just look at this image from the Washington Post’s media reporter, Paul Farhi:

Over the past year, traffic to CNN has dropped from 155 million monthly users to 124 million users. That’s a 20% year-over-year drop. Month-over-month is worse, dropping 5.4% from 131.4 million to 124 million. People are no longer as interested in the news.

Second, NBC News did a big piece on how The Atlantic is attempting to get to profitability in an era when fewer people are subscribing to the news.

Subscription growth, which had skyrocketed in 2020 thanks to the Covid-19 pandemic and the presidential election, had come back down to earth. For the first time, the number of subscribers had plateaued and started to slightly decline. And even with last year’s substantial surge, the magazine had lost more than $20 million and was on track to lose another $10 million this year, according to slides of the presentation shared with NBC News.

The Atlantic needs to make $50 million in annual subscription revenue in order to break even, according to Thompson. Hitting that target has become more complicated since Trump left the White House and the pandemic let up. New subscribers are coming in at about a quarter of the rate they did last year (10,000 a month, on average), and the magazine faces challenges keeping some of its existing audience, which may have less of a need for The Atlantic’s journalism in a post-Trump, post-Covid world.  

Without the genuine worry about Covid-19 (though we’ll see what the Delta variant does to that) and the constant rage about Trump, publications that over-indexed on covering these topics are struggling. CNN has fallen into that same problem.

If you look at those Comscore numbers, by the way, The Atlantic has seen its traffic cut in half since June 2020. It’s hard to grow a subscription business when your top of the funnel is shrinking.

I was wrong when I took the contrarian point about people recognizing the importance of news post-Trump. I wasn’t convinced that we’d see such a strong Trump slump. The reality is, so many people are exhausted that the last thing they want is to consume more information that is only going to further exhaust them. That’s what Twitter is for, you know what I mean?

So, where does that leave CNN?

If it leans into the news with any sort of gusto, it’ll run into the same problem as The Atlantic. The people that are most likely to pay for something like this are the die-hards; however, there are simply fewer of them out there. And with fewer of those anti-Trump viewers to pay for streaming, who else could pay? Or would pay?

So, if not news, then maybe it’s original content instead. The issue is that this also doesn’t make much sense. As part of the broader Discovery/HBO Max community, having another streaming platform releasing original content is redundant. Why not just release all that content under the bigger brand?

The third option is opinion content. Task its biggest names to lean as aggressively into their opinions as possible. We already see this to some extent on TV, but make it explicit. Double down on validating people’s opinions in an extreme way. Sure, there are fewer of them, but by mid-2023, the Republican primaries will be in swing, anxiety will be increasing, and maybe opinion-driven talk-radio-like content could do well.

If it’s not clear, all options are pretty awful. This feels like the pivot to video. Every media company decided video was the name of the game and so that’s where they went. Now every media company is launching a streaming platform. Why? How will this benefit the audience?

The answer is it won’t.

Sadly, that question is never taken into consideration when these product decisions are made. CNN has decided it wants a streaming platform (like so many decided they needed to be in video) and is making the pivot. By mid-2023, we’ll be hearing about layoffs.

Biden is boring; he doesn’t sell subscriptions. It’s the wrong time to be launching a news-focused streaming platform. But since this is the new flashy object, media has to pivot.

Simple fixes to improve product

If there is one thing that we can all agree on, publisher websites are absolutely abhorrent. Whether it’s because they’re digital minefields of pop-ups and auto-adjusting ads or they forget you’re logged in every time, the experience is nauseating.

Frederic Filloux wrote a good piece on some of the easiest fixes to make. Many of the pain points include:

  • Login, identification, and on-boarding procedures
  • No personalization (even for paying subs)
  • Poorly implemented apps
  • Jittering pages

But he has a very interesting thesis on why publisher sites tend to be so horrible and why some are worse than others.

Unsurprisingly, these shortcomings are more prevalent in companies where the print culture dominates. When digital is considered somewhat secondary, management is less prone to address problems, while the staff, who draws its prestige by showing up on page A1 or on a magazine spread, doesn’t care very much.

This is spot on and surfaces the constant battle at media companies between print and digital. This is a fundamental issue that has a dramatic impact on the business.

Digital is likely the exclusive way people get magazine subscriptions now. I would be surprised if they are calling for a subscription or doing anything but engaging with the digital experience first. Therefore, what is the experience you want a prospective customer to have?

Is it getting nauseous because the page constantly resizes because the lazy-loaded ads can’t figure out which dimension to return? Is it to overheat their computer because you’re throwing fifty different ads in? Is it to hurt their eardrums because you have auto-play, sound-on outstream video ads playing?

The digital product is not inferior to the print product. The digital product is the introduction to the product. Read Frederic’s piece and make the necessary fixes to your sites.

And while I’m poking fun at magazine publishers, there are digital publishers that are still pretty awful too. The purpose of the website is to deliver the content in a way that doesn’t interfere with what the user wants to accomplish. Our business models matter, but if we’re turning the reader off, how are we building anything sustainable?

Audit your site, find where there are problems, and clean them up. Over the long-term, you’ll start to see retention improve and likely an increasing ARPU.

Thanks for reading. If you have thoughts, please hit reply to this email. If you have colleagues that would benefit, please share. And as always, I hope you have a great week!