Edsel, Quibi and CNN +? A new addition to business failures Business news

Author DAVID BAUDER, AP media writer

NEW YORK (AP) – Edsel. Quibi. New Coca-Cola. Segway. DeLorean sports cars. The Pantheon of Huge Business Failures has a new member in the CNN + streaming service.

The news subscription offer didn’t work for even a month before Warner Bros. Discovery announced this week that it will close on April 30th.

“This will be among the top 10,” said Steve Rosenbaum, CEO of NYC Media Lab and a business innovation expert who researched the long history of products that have gone head-to-head.

While “CNN minus” comments quickly spread, it’s no joke for the more than 300 people employed by CNN +, which has been in development for two years. CNN is expected to absorb some of these jobs, but there will be layoffs – a clear picture of those numbers is still emerging.

Political cartoons about world leaders

Political cartoons

The company spent hundreds of millions of dollars on the project and no one knew when or whether the losses would be offset by profits.

Older people remember Edsel, a new car model introduced by Ford in 1957 that was poorly made and too expensive. After being scrapped two years later, Ford was valued at $ 250 million, a name reminiscent of it as a synonym for business failure long after the car itself was forgotten.

Coca-Cola’s attempt to introduce a new flavor in 1985 was abandoned within weeks. DeLorean did not fare except in an episodic role in “Back to the Future.” Segway inventors found in 1999 that few people want to spend about $ 5,000 on a famous scooter.

Quibi, short for “quick bites,” had the support of Hollywood’s biggest names and $ 1.75 billion in investors when the mobile video service was introduced in 2020. It lasted six months.

Journalist Josef Adalian recalled this failure in an article for Vulture entitled “CNN + has Quibi Vibes,” which was published two days after its launch.

“CNN + in its formative phase feels like Quibi streaming news,” Adalian wrote. “A lot of money has been spent, big stars are on board, but it’s hard to figure out what the service is supposed to be and why a lot of people will want to pay for it.”

Rosenbaum, a self-described news addict, could not figure out what CNN + has to offer, which is unique and crucial to him. He said he never considered paying a monthly fee of $ 5.99 for the subscription.

He said he has “a lot of familiar faces that I find in other places.”

CNN + has some of its own news programs, documentaries and talk shows, and big names like Chris Wallace, Anderson Cooper, and Jemele Hill, but because of cable and satellite contracts, it has been unable to offer a streaming version of what most people know about CNN. television networks.

People can find streaming news in several places – ABC, CBS and NBC, for example, have their own services – for free.

“When starting a new business, time is everything and their time couldn’t be worse,” said Allen Adamson, co-founder of marketing firm Metaforce. “The streaming services were in a bubble and everyone knew there was a limit to how many streaming services they would get.”

When Discovery bought out CNN’s previous corporate owner, AT&T, many observers believed that CNN + would eventually be absorbed into a larger app that also had entertainment.

It has never come this far, and some of its employees were shocked at Thursday’s meeting when they were told the service would close abruptly.

One of the biggest champions of the service, former CNN chief Jeff Zucker, was excluded from the picture on Feb. 1 when he was forced to resign for failing to reveal a romantic relationship with a co-worker.

CNN + went live on March 24, just days before the takeover of Discovery executives. In a sense, this was a business provocation: why start a project that was the idea of ​​a former management team just before new leaders came up with their own ideas, not to mention a cost-cutting mandate?

Coming CNN chief executive Chris Licht at a meeting with employees on Thursday compared it to a new owner who came in, saw a beautiful new house, but said he needed an apartment instead.

The Discovery team made it clear at the meeting that they don’t think CNN + will work, based on their own streaming experience.

“If we go in a new direction, we can’t let it go for a moment longer than necessary,” JB Perrette, head of streaming for the new company, told a staff meeting.

Licht has repeatedly praised his staff for the quality of CNN + and it is impossible to know if the product itself would have failed if it had had a few years to settle down.

And Rosenbaum said he might be tempted to check to see if it’s worth offering a few free months.

But time was one thing CNN + didn’t have.

“It’s a big failure,” Adamson said, “but not as big as it would be if I went ahead and became a black hole of money.”

New York business writer Mae Anderson contributed to this report.

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