What's up guys and welcome back to wall street millennial on this channel, we cover everything related to stocks and investing the streaming. Wars are heating up with dozens of companies competing for your viewing time and money. Most analysts believe the market will eventually consolidate with only three or four large platforms surviving. In the meantime, there will be intense competition and it's very difficult to predict, who will end up on top.

One of the major contenders in this competition was going to be cnn, plus a six dollar per month paid subscription service launched by the cable news channel. It was the brainchild of long-time cnn ceo, jeff zucker, who had been planning the service for years. He spent 300 million dollars to invest in technology original content and marketing foe services highly anticipated spring 2022 release. On april 21st, 2022 cnn shocked the world when they announced that they'd be shutting down the service less than one month after its launch.

They've lost 300 million dollars with absolutely nothing to show for it and they'll be forced to lay off hundreds of employees at the same time, their traditional cable news business is also floundering since donald trump left office. Their viewership has declined by a staggering 70 percent. In this video we'll look at why cnn plus was such an epic failure and whether there's any hope for the network going forward. Cnn was founded all the way back in 1980, as the first ever 24-hour cable news network.

For decades there were massive, critical and commercial success, giving on the ground coverage of politics, war zones and other history-making events, but starting in the 2010s cnn, as well as other cable tv channels, found themselves facing an existential threat with the rise of streaming services like netflix. More and more americans started ditching their exorbitantly priced cable tv subscriptions starting around 2016. The number of households with cable or satellite subscriptions started to fall, precipitously declining by almost 30 percent by 2021.. This was a big problem for cnn.

They get paid by the cable providers based on how many people watch their show, no matter how good their content is. If less people have cable subscriptions, the less money they can make, the entire cable tv industry became viewed by wall street as a melting ice cube. Just like nobody uses a landline anymore 10 years from now. Maybe nobody will be paying 70 dollars per month for a cable news package, so the executives of cnn put their heads together and came up with a following conclusion: if you can't beat them join them, they decide to make their own streaming service called cnn plus they Produce original content specifically for the service, so it wouldn't be the same thing you see on dvd.

This gives existing cnn viewers a reason to subscribe to the service and avoid cannibalizing their cable business from the beginning. They knew it was a risky proposition. If they were going to make a streaming service, they had to get it right. If it ended up being a flop, it could cause long lasting damage to their brand image.

So they pulled out all the stops and spared no expense in its development. The most important part of any news organization is the anchors cnn was able to convince long-time fox news host chris wallace to leave his old job and join cnn plus fox news paid him. 7 million dollars per year, cnn almost certainly had to offer him more than that to convince him to leave. They also tapped into their existing talent.

Pool anderson cooper would run a show called parental guidance where he talks to parenting experts and takes viewers along with him on a journey to raise his two kids. Don lemon would run a show which brings on guests to talk about various social and political issues. They also made a show called the wunderlist where they go around the world to look at nature and cultural sites. This is special content which you wouldn't get by watching cnn.

On tv hardcore, cnn viewers would be enticed to pay for the service because it offers even more content that they crave. After investing 300 million dollars over two years, cnn plus was finally ready to launch in march of 2022. They pushed it on. The cnn show and spent millions on advertisements leading up to the opening day whenever you launch a new service.

The first few weeks are critical. It's like opening weekend for a new movie. If it's going to be a flop, you know it very fast. After two weeks, cnn plus was averaging 10 000 viewers per day and by the end of the first month it had 150 000 subscribers cnn plus had hundreds of employees, including superstars.

They poached from other networks like chris wallace. They have to pay massive travel expenses to send their film crews around the world to film the wunderlist being conservative. It would cost at least 200 million dollars per year to operate. That means that they would need almost 3 million subscribers just to break.

Even in fact, it's even worse than it looks they had a promotion where anyone who signs up in the first month locks in a lower price of three dollars for the rest of their life. Even with this extremely generous promotion, they still only got 150 000 subscribers that makes it almost impossible for them to ever get to the 3 million subscribers that they need just to break. Even so, why was it such a flop, while the production quality was high? A lot of their shows were just too boring. For example, they had a show called jake tapper's book club, where the cnn host interviews, various authors, one episode from anderson cooper's show, was about a college student in mississippi proposing to his girlfriend.

While i wish them a successful marriage, very few people would care about the love life of two random college students. It looks like even cnn, knew their content. Library was lacking, so they even brought back reruns of anthony bourdain's parts unknown series bourdain was a legendary chef. His show was extremely popular, but he's been dead for four years now, so they'll eventually run out of reruns, no matter how high their production quality is.

The idea of a new streaming service has some key flaws and was probably doomed to fail from the beginning. If you want to find a book to read, you can just look up the top books on youtube and find hundreds of videos giving recommendations. Why should you pay six dollars to watch jake tapper's book club when you can probably find a youtuber whose content aligns better with your personal interests? The same could be said for anderson cooper's parenting show the cooking show they had planned and many others. They also have news, shows talking about current events, but even that's pretty useless.

If you want to watch the news online, you could just use cnn's main youtube channel for free. Why should you pay six dollars a month for pretty much the same thing? It's always easy to criticize a failure in hindsight, but cnn plus was probably a really stupid idea. If you're going to expect people to pay a monthly fee for a subscription service, you need to offer them something they can't find for free on ad-supported platforms. That's why you need big blockbuster hits like squid game or game of thrones cnn used to be owned by at t, but they recently agreed to spin off their media assets and merge them with discovery.

The combined entity is called warner brothers discovery. Their main goal is to combine all of their content to create a streaming service which can compete with the likes of netflix and disney plus. The combined streaming platform will include iconic franchises, like game of thrones, the dc superhero universe and the discovery channel long time discovery. Ceo david zasloff was named ceo of warner brothers discovery.

He was long skeptical of cnn plus the first day the merger closed on april 8. His first order of business was to perform a strategic review of the performance. The executives who created cnn plus badly wanted their creation to survive. That's why they did the 50 off marketing gimmick in a desperate attempt to show high subscriber growth in the first month, but zazloff saw through their tricks.

He was appalled by how much money the previous cnn leadership was willing to spend on the project and how embarrassingly low the subscriber count was as a result of the merger. The new company is already saddled with 58 billion dollars of debt, and its stock prices already lost a quarter of its value. The last thing they need is the cash burning cnn plus business, which was projected to lose close to one billion dollars over the next four years at t acquired cnn when they merged with time warner back in 2018.. Att's senior executives had no experience in media and frankly had no idea what they were doing.

Now that david zaslov is in control. He will start the long process of riding the ship as a result of cnn plus being shut down. Hundreds of recently hired employees will be laid off. One of those employees is chris wallace, who left his seven million dollars per year.

Job at fox news he's probably regretting that decision right now, alright, guys that wraps it up for this video. What do you think about cnn plus, let us know in the comments section below as always. Thank you so much for watching and we'll see in the next one wall, street millennial signing out.