Friday, July 19, 2024

CNN chief Mark Thompson announces sweeping overhaul of news network, cuts 100 jobs | CNN Business

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Mark Thompson, the CNN chief executive appointed last year to modernize the news network, unveiled a set of sweeping changes to the iconic outlet Wednesday, announcing plans to build a billion-dollar digital business, experiment with artificial intelligence and overhaul key newsroom structures.

The far-reaching measures, which Thompson described to staffers in a memo as a “key milestone in the transformation of CNN,” will result in about 100 employees, or about three percent of the workforce, being laid off. Those employees, Thompson said, will be eligible for severance packages.

Since his appointment last year, Thompson has been candid about the challenges facing CNN, stressing to staffers that swift and dramatic steps are necessary to reorient the television-focused news organization for a digital future.

Like other legacy media companies, CNN has for its four-decade history relied heavily on carriage fees from the traditional cable news bundle, a declining business that has been upended by the advent of streaming services such as Netflix. While the company is still profitable to the tune of hundreds of millions of dollars each year, pivoting the network’s business away from the contracting cable industry, which provides the bulk of CNN’s revenue, to position it for the future will be an enormously difficult challenge.

“Turning a great news organization towards the future is not a one-day affair. It happens in stages and over time,” Thompson said in his memo to staff. “Today’s announcements do not answer every question or seek to solve every challenge we face. However, they do represent a significant step forward and I hope you will read about them in that spirit.”

Thompson’s announcement that he intends to build a digital subscription business generating more than a billion dollars in revenue represents a cornerstone of his strategy to “future-proof” CNN. A direct-to-consumer subscription product has long been seen by CNN’s leaders as the answer to shrinking revenues brought on by the decline of linear television.

Former management launched CNN+, a subscription streaming service that was quickly shuttered when CNN’s one-time parent company, WarnerMedia, merged with Discovery to form Warner Bros. Discovery. The siloed news streaming service did not fit into Warner Bros. Discovery’s business strategy, which called for building a super-streamer resembling the cable news bundle. CNN now boasts a much more budget-friendly streaming service, CNN Max, that lives alongside other brands like HBO inside its parent company’s streaming service Max.

Thompson, who was light on specifics while announcing his plans for a digital subscription business, said CNN will create “products that will provide need-to-know news, analysis and context in compelling new formats and experiences.” He said the first product will launch by the end of 2024.

Thompson, who previously served as chief executive of The New York Times, had pushed to expand the newspaper’s products beyond core news, acquiring review website The Wirecutter and launching the outlet’s cooking vertical, among other moves.

“We want to build on CNN.com’s reach with a new focus on engagement and frequency – how long our users spend with us and how often they return – by improving the quality of the product experience and giving users powerful reasons to come back to us more often,” Thompson said in his memo.

As he works to modernize CNN’s business, Thompson unveiled plans to embrace artificial intelligence tools, aiming to “reclaim the ‘pioneering spirit’ Ted Turner talked about at our founding and regain a leadership position in the news experiences of the future.”

Thompson said CNN will make a “strategic push” into AI to “determine how best to safely harness this emerging new technology to serve our audiences and deliver our journalistic goals more effectively and responsively.”

His transformative measures will also include a dramatic overhaul of CNN’s newsroom, which has been largely split into three divisions: US television, international television and digital. Thompson said the structural changes he is implementing will unify the three branches under one roof.

CNN will also further embrace a “follow the sun” model, in which news stories are overseen at any given time by the company’s bureaus across the world. As part of that effort, Thompson said CNN’s Hong Kong bureau will see an “expanded role” and that the organization would “make greater use” of its bureaus in London and Los Angeles.

“This will streamline workflows across newsgathering and place editorial direction closer to the story,” Thompson explained. “It will better equip us to handle a wider array of platform needs around the clock and will mean we can flex news desk resources when the news cycle takes an unexpected turn.”

While Thompson primarily focused on digital offerings, he also announced plans to breathe new life into CNN’s television programming. Thompson said that Charlie Moore, the longtime “Anderson Cooper 360” executive producer who was recently promoted to vice president of prime time programming, will “find ways to further develop and strengthen” the network’s television offerings. Thompson further announced the creation of a “TV Futures Lab” that will “not only develop and manage streaming and (video on demand) programming for the Max platform but will lead new thinking about ways to migrate the linear news experience to other new digital environments.”

The changes come after years of strategy shifts and cuts at the pioneering cable news network. After longtime leader Jeff Zucker abruptly left the company in early 2022, the company has been without clear direction.

Warner Bros. Discovery then appointed veteran television producer Chris Licht to replace Zucker. Licht was forced to lay off hundreds of staffers early in the job and never articulated a clear path for CNN to move into the digital future. Compounding his lack of vision, Licht’s brief one-year tenure was marked by a series of severe missteps.

Thompson, who is widely credited for revitalizing The Times, was appointed CNN chief executive last summer, after Licht’s tumultuous run in the job. Since then, Thompson has spoken consistently about the need to transform CNN’s business but has largely avoided offering specifics. Thompson’s announcement Wednesday indicates he is now ready to execute on a more concrete plan.

Whether Thompson can successfully create a billion-dollar digital news business at CNN remains to be seen. Time is also of the essence for Thompson as the cable news business continues to collapse. At The Times, the newspaper announced earlier this year that its digital subscription business will earn more than $1 billion in annual revenue, more than a decade after Thompson had initially taken the helm and started to implement changes there.

This story has been updated with additional context and developments.

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