CNN, one of the most popular news networks in the world, announced that they will be shutting down their streaming service, CNNgo, a month after its launch. This announcement has sparked a lot of discussions amongst the media industry and viewers alike, with people wondering the reasons behind the sudden shutdown of the service.
In this article, we will look at the different factors that have contributed to CNN’s decision to shut down its streaming service.
Background of the CNN streaming service
CNN, the long-running American news network, decided to shut down their streaming service CNNgo. After launching in 2014 and operating for five years, CNN made the decision to close its streaming service at the end of 2019 due to low user engagement and high production costs.
The streaming service allowed users to view both live news coverage, on-demand content, extended interviews with top-level officials, and more. CNN had put a large emphasis on offering an expansive library of videos from around the world. This included independent reporting from numerous locations and regions all over the planet.
CNN was looking to increase public engagement via the streaming service but encountered difficulty doing so due to limited viewership and access in certain sectors outside of their core demographics. As well as providing more than double what other similar companies were charging in monthly fees for access, this led many prospective viewers away from investing in their product overall despite its high quality content offerings.
Reasons for Shutdown
Just a month after its launch, CNN announced that it will be shutting down its streaming service due to a lack of viewership. The move came as a shock to the digital streaming service industry, and it was not entirely unexpected given the current climate.
Let’s explore the reasons behind CNN’s decision to shut down its streaming service.
Poor User Experience
CNN announced the shutting down of its streaming service, CNNgo, in early 2020. The primary reason fueling this decision was certain upgrades to the user experience that were required in order for the service to survive going forward.
The old version of the streaming service had become outdated and lacked support for newer devices, like smart TVs and mobile device. Furthermore, there was an uneven distribution of content across multiple platforms which further contributed to a poor user experience. For example, users with a Chromecast device could not access videos on-demand while other users could easily stream shows and films using the same device.
Additionally, CNNgo failed to integrate with many popular services like Netflix and Hulu — this alienated many potential customers from joining the platform and limited customer acquisition in general. Problems with content availability also became apparent as some programs only became available for streaming after a significant delay following their initial air date.
Ultimately, these shortcomings made it impossible for CNNto compete with other streaming services — leading them to shut down operations in order to avoid wasting money on an inferior product any longer.
Lack of Content Variety
One of the primary reasons cited by CNN that caused their streaming service to shut down had to do with the lack of variety in content. While CNN had made attempts to diversify its offerings, such as acquiring CNN Films, launching CNNmoney and allowing customers to rent current releases through Amazon, there simply wasn’t enough variety in their streaming services offerings.
CNN lacked sports programming — thus unable to compete with ESPN — and lacked appeal to those who watched entertainment and news programs. Add in issues of limited distribution on Roku and Apple TVs, technical difficulties with streaming on multiple devices simultaneously, and difficulty reaching younger audiences — all these factors converged together that created an unsustainable situation for the streaming service.
Analysts also speculated that the launch of HBO Max and extensive subscriber base attracted by traditional cable television contributed to keeping more viewers away from other online streamers like Netflix or Hulu. These platforms were able offer a huge selection of existing shows as well as new original shows which was not a strong suit forCNN at the time. The large potential for growth has led many other providers such as Disney+, HBO Max and YouTube TV are now flooding into this landscape making it more challenging for small scale players likeCNN to compete.
Low Subscriber Numbers
One of the primary reasons cited for CNN shutting down its streaming service was the low subscriber numbers. Despite having a well-established and highly respected brand, CNN’s streaming service had difficulty competing with larger subscription-based media companies, who have more money to promote their services and attract viewers. To put it in perspective, according to estimates from 2019, Netflix had more than 160 million paid subscribers worldwide; this is compared to the estimated 100,000 to 500,000 subscribers that CNN’s online streaming service had at the time.
As a result of this disparity in subscriptions, CNN found itself unable to compete with larger streaming services who offer an abundance of content and better promotions. Additionally, the competition between these large providers has caused consumers to become increasingly choosy about where they opt to spend their money — which translated into fewer people willing or able to commit to CNN’s comparatively smaller library of content. In order for any streaming service to be successful it needs as many customers as possible willing to pay for its content; but smaller platforms simply lack the resources needed (including marketing funds) required to draw in these potential customers and build loyalty among existing ones — necessitating shutdown.
Impact of Shutdown
Just a month after its launch, CNN announced the shutdown of its streaming service, CNNgo. This move comes as a surprise to many, as the streaming service was expected to be a success. So what led to the shutdown of the streaming service and what are the potential impacts of the shutdown?
Let’s take a closer look.
Loss of Revenue
For an industry struggling to make digital streaming services profitable, the COVID-19 pandemic has ushered in a tumultuous turn of events for companies such as CNN. As the world entered lockdown, streaming providers saw a huge increase in demand for their services as people turned to streaming from home as entertainment or to stay informed.
However, without additional revenue from ad sales many companies quickly encountered a loss of revenue and had to reassess their expenditure in order to stay financially viable. As a result, some services such as CNN’s streaming service were no longer cost effective and had their development paused indefinitely.
Loss of Brand Loyalty
The results of CNN’s streaming service shutdown had a significant impact on both its customers and the company brand. For most of its viewers, the decision to discontinue the service came as a complete surprise. This sudden change in course caused questions and confusion, ultimately leading to an erosion in customer loyalty.
In addition to customer loyalty, the sudden shutdown was highly damaging for the brand reputation of both CNN and AT&T itself. Poorly communicating their decision with consumers intensified customer dissatisfaction with the company and created additional discouragement from future investments with the media giant.
Beyond this, there was also a financial toll in regards to both subscriber loss and advertising revenue decline. According to a study commissioned by CNN in 2018, it was estimated that CNN would lose $35 million if approximately 1 million subscribers left when the streaming service ended operations. Furthermore, despite still having 94 million subscribers across all channels as of 2020, it has been estimated that around 20% were lost as a result of not having access to streaming services such as AT&T TV Now anymore.
Overall, CNN’s choice to shut down their streaming service was an unfortunate mistake that took years for them to recover from both financially and emotionally –– especially considering how quickly they grew prior to their decision. Consequently, their brand loyalty will always remain affected because customers who had once trusted them became more careful about engaging with HBO-owned products again after this misstep in future decisions.