CNN's dicey reinvention plans: Layoffs, AI and another attempt at paid digital

By Dan Kennedy on July 11, 2024

You may have heard that CNN's chief executive and president, Mark Thompson, has plans. As the network's media reporter, Oliver Darcy, wrote on Wednesday, Thompson is laying off about 100 people, or 3% of the workforce; embracing artificial intelligence; and developing a paid subscription service.

Now, let me acknowledge that it would be incredibly easy to snark. I can't imagine paying for CNN in addition to all the other stuff I pay for, and I'm getting sick of media executives blurting out "AI" as some sort of solution whenever they have a problem to solve. Moreover, if Thompson is serious about rebuilding CNN, how does another round of layoffs figure into that?

But Thompson is up against some serious challenges, and he may be the person to solve them. He is, after all, the executive who revitalized The New York Times' business prospects by transforming it into a lifestyle brand as much as it is a news organization. The Times today has more than 10 million paying customers, and many of them signed up for access to games, recipes, consumer advice and other ancillary products.

Ubiquitous though CNN may be, it doesn't have the brand power of the Times. But it faces the same need to do something dramatic: as more and more people flee cable and embrace internet streaming, cable channels are losing one of their most important sources of revenue. CNN, for instance, makes about $1 per subscriber. As Joshua Benton wrote for Nieman Lab:

The number of U.S. cable subscribers has fallen from 98.7 million in 2016 to 58 million in 2023, with projections — optimistic ones, arguably — putting that number at 40 million by 2028. That's a lot of monthly $1 charges gone. Add in a steep ratings decline (and an accompanying ad collapse) and the future looks very fuzzy.

Of course, we've been down this road before. Thompson's predecessor once removed, Jeff Zucker, tried a subscription service called CNN Plus, which was killed by new ownership almost as soon as it got off the ground. Thompson has not be especially clear about his own subscription plans, but I think that at a minimum he needs to offer a standalone streaming channel that features the same programming that's on TV plus some extras. I wouldn't be interested because I still have cable; if done right, though, such a service could prove to be compelling.

One of the most ridiculous shortcomings of CNN Plus was that CNN-TV was missing, which was no doubt a concession to the cable industry. That's less important than it was a couple of years ago.

I like to say that friends don't let friends watch cable news. But CNN, more so than MSNBC's opinion-heavy lineup and much more so than Fox News' right-wing propaganda, has its roots in journalism, and they've been trying to get back to those roots under Thompson. It hasn't paid off in ratings; I just hope that Thompson's corporate masters are allowing him to play a long game.