Did CNN Actually Learn?
How to bounce back from a digital disaster, by shifting from planning to experimentation
Last month, I wrote an article on The Perils of Planning.
I provided a detailed case on the launch of CNN’s digital streaming service, “CNN+”, and how it careened into catastrophe.
It did so by following 4 familiar steps:
Gather third-party data
Write a detailed business plan
Make an expert decision
Focus on execution
If you missed it, here is a quick recap of how that turned out for CNN+ (from my DPW keynote in Amsterdam):
(Full keynote speech available here.)
Bouncing Back from a Disaster
CNN+ is an example of the kind of management failure that is hard to recover from.
After a big digital strategy is managed in an “all chips on the table” fashion, and crashes and burns—you are left with an organization terrified of further mistakes.
It is extremely hard for anyone to push for new digital ventures, business models, or innovations. Instead, the tendency is for companies to retreat into a defensive position around the legacy business as is.
But I am an optimist.
I never say “never.”
So… what would a better response to disaster look like?
Is it possible for a firm like CNN to learn from its missteps and take a different approach to digital transformation?
The approach to innovating under great uncertainty that I recommend in my latest book is to spend less and focus first on learning through low-cost testing of business hypotheses.
Could CNN ever turn the page and take my approach?
Remarkably… it looks like the answer may be yes!
A New Approach at CNN
CNN is now under new leadership, with a new CEO, Mark Thompson, who previously led digital transformations as CEO of The New York Times and Britain’s Channel 4, and Director-General of the BBC.
Early indications are that Thompson and his team are quietly pursuing a renewed effort at transforming CNN.
According to reporting on internal memos and meetings, Thompson is focused on digital video and considering another attempt at a subscription model, believing that audiences may yet pay for a digital offering, if CNN develops the right digital products.
Meanwhile, CNN’s early public moves point to an approach of experimentation—spending much less, starting with a limited version of the product, and putting it in front of a smaller audience, to get to market sooner and learn faster.
Bundling CNN into the Max app
So what does that look like today?
CNN has quietly relaunched its streaming service as a tab within the overall Max app which has nearly 100 million users. (Max is the streaming service of Warner Bros. Discovery, the parent company of CNN, HBO, and other legacy media properties.)
The branding is notable. Rather than “CNN”, it is modestly called “News [Beta]”.
Within the tab, none of CNN’s daily news content is available on demand the way it is on YouTube.
Instead, viewers are offered a livestream of CNN International—which is free from the cable contracts that block CNN from streaming its US television content directly.
In addition to that contractual workaround, CNN is filming a few hours of live news just for streaming each day. Labeled “Live CNN Max,” these segments use seasoned reporters, but not the network’s name-brand TV talent (who come with a higher price tag).
For viewers seeking something to watch on-demand, “News [Beta]” points you to content that was already on the Max app. This includes CNN series on travel and food (Anthony Bourdain and Stanley Tucci), documentary movies on history and current events, and—because the tab is not branded “CNN”—the news comedy of HBO’s John Oliver and Bill Maher.
If you pay attention, you can see CNN dipping its toe into a new revenue model by running ads against its livestreaming news (even for viewers with an ad-free subscription to the Max app).
MVP, Not Product
The key thing to keep in mind is this:
CNN’s current digital offering should not be viewed as a product.
As a product, it’s crap. The experience is far inferior to what you get on popular streaming apps—with limited content, no on-demand news, no way to look ahead to the day’s live schedule, and a confused brand identity.
CNN is clearly not going to make money or grow its viewership with this offering. “News [Beta]” has no subscription options, and it has received almost no marketing promotion.
But that all makes sense.
What matters right now is not the quality of the product but the quality of the experiment.
In The Digital Transformation Roadmap, I offer my definition of an MVP:
MVP: a minimal artifact designed to test a business assumption
So, what assumptions can CNN test and learn from its current minimalist offering?
Many things.
Who is our current viewer? What content are they watching? When, how, and for long? Which advertisers are willing to pay to reach them?
An Agenda for Learning
To rapidly iterate its way to a real product that can succeed in the market, CNN will need to embrace a learning mindset.
This means:
Think like a scientist
Focus on testing many ideas to learn what works
Commit to the opportunity, but stay flexible on the solution
Keep failures cheap, so you can afford to take risks
Validate, validate, validate!
This mindset should then be paired with an explicit agenda for learning from the market.
Five areas to include in this agenda:
Audience: Who is most interested in streaming our content—CNN television viewers? Max subscribers? Cord-cutters or cord-nevers?
Content: What kind of content do viewers want to stream? What mix of breaking news vs. evergreen “newsy” content? What lengths and formats?
UI / UX: How do viewers want to find, discover, and watch these different types of content?
Advertisers: What advertisers are looking to reach this audience? What kind of first party data can CNN provide? What CPM can it charge?
Pricing, Bundling, and Distribution: Should CNN stay bundled in the Max app? Or could a standalone CNN app draw its own viewers? What price would the most eager customers pay? Could a free ad-supported tier draw enough viewers to make sense?
Four Key Things to Look For
CNN’s task now is the same as any startup: to search for a repeatable, scalable, profitable digital business model. (per Steve Blank)
To organize and speed its path to discovering one, I recommend that CNN’s team apply my framework of The Four Stages of Validation.
This framework will keep their efforts laser focused on the discovery of four things:
A compelling unmet customer need around streaming news
A value proposition that will drive behavior change in customers
A product that leverages CNN’s unique assets (i.e. something it can do better than YouTube, TikTok, Netflix, or Disney)
A path to profit, with a revenue model that can break even in the near future
Wishful Thinking?
Is this complete reversal in CNN’s thinking too much to hope for?
Other firms have shown it to be possible.
As I wrote before, The New York Times did everything wrong in its digital transformation, before it turned the corner and learned to do everything right.
Can CNN do the same?
We’ll just have to wait and see.
“Extra! Extra!”
I debated the story behind the implosion of CNN+ with Lucy Kueng in our recent conversation – where we discussed the disruption of the media, leading through transformation, and much more.
Check it out if you missed it!
“THE DIGITAL TRANSFORMATION ROADMAP: Rebuild Your Organization for Continuous Change”
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