6 ms·

Everyone should get a $300m fuck-up as a treat. It's actually rather mind-blowing that so much money was invested in such a system. How does that possibly make

Everyone should get a $300m fuck-up as a treat. It's actually rather mind-blowing that so much money was invested in such a system. How does that possibly make sense? According to this service [0], CNN has an annual revenue of $190m. Is this some kind of money funneling scheme or an exec's pet project? How do these execs remain so rich after wasting massive amounts of money on projects that seem doomed to fail right from the start? Seeing this makes me wish you could somehow directly short projects of this nature from large companies. [0] https://www.zippia.com/cnn-careers-17754/revenue/ https://www.zippia.com/cnn-careers-17754/revenue/

tonguez 5y ago
- scarface74 5y ago
  Did this just turn into a QANon board?
_fat_santa 5y ago
I have a hard time understanding how it can cost $300M to stand-up a platform like that. Like where are they spending their money? Can someone in this space enlighten me about how this kind of stuff is so expensive. It it just all about contracts and broadcast rights?
- ianmf 5y ago
  They probably cut market research funding to obtain that $300M.
  - creaghpatr 5y ago
    They retained McKinsey to forecast adoption, bet that wasn't cheap.
    - chiefalchemist 5y ago
      Inverse to the number of subs
- A4ET8a8uTh0 5y ago
  Advances for talent; that is likely a good chunk of it.
- brentm 5y ago
  Marketing spend was a big part.
  - legitster 5y ago
    Of which, a lot was probably spent on their own in-house platforms.
  - quux 5y ago
    really ineffective marketing spend if you ask me. I watched a fair amount of CNN during the early phases of the Ukraine war and I would be hard pressed to tell you what shows CNN+ offered that were compelling enough to justify yet another streaming subscription. I vaguely know Chris Wallace had a show but I think I learned that from a NYTimes profile, not any of CNN's marketing.
    - bombcar 5y ago
      Incredibly ineffective marketing spend - the first time I heard of CNN+ was all the "CNN+ is completely dead" articles.
      - usrn 5y ago
        Same here and it launched as I was making a transition from hard left to hard right and moving from an urban area to a suburban area so I should have been in pretty much every group you could possibly target (except maybe people who watch CNN?)
        boppo1 5y ago
        ... what constitutes hard right?
        usrn 5y ago
        You can look through my comment history but I self censor to avoid getting banned. Also my username is an acronym. You're welcome to try expanding it.
- wmf 5y ago
  I assume much of the money was for original content. There's a $100B+ bubble in original streaming content going on right now.
  - jlmorton 5y ago
    That's not a bubble. The film and television business has always been huge, and consumers pay to watch it. It's not even clear there's been any increase in real terms. There might be a shift to streaming, but the industry size has remained relatively constant in real terms.
    - cwkoss 5y ago
      The supply of content has exploded by several orders of magnitude. Much of it is totally free. Heck, some evenings I pause a show and find myself having spent 2 hours scrolling tiktok. Video IP is drastically overpriced right now, and its never going to return to 1990's levels of cultural dominance.
      - volkk 5y ago
        > The supply of content has exploded by several orders of magnitude. Much of it is totally free. Heck, some evenings I pause a show and find myself having spent 2 hours scrolling tiktok. i'm of the opinion that a big reason for this is while quantity has gone up, quality has plummeted. if you were watching something interesting/worthwhile, you would have been less likely to find tiktok more interesting than the crap on netflix.
        ethbr0 5y ago
        IMHO, a little of column A and a little of column B. It's happening from both sides. As quantity goes up, cultural relevance of any particular single show goes down. Thus it becomes harder to run a platform on "one" hit, thus everyone turns to the Netflix model of a billion micro-targeted shows, thus demand for content becomes a series of niche requirements, and anything actually creative has to percolate through them (a la Joker's "Sure, I'm a superhero movie" or La Casa de Papel's "Sure, I'm a Spanish Ocean's Eleven" or Dark's "Sure, I'm a German Stranger Things"). That's hard, and so what you actually get for the majority of content is the media equivalent of a box of Crayola crayons -- 256 different colors, with zero depth under the surface.
- bogomipz 5y ago
  I think there's probably some insight in this quote from the article: >"CNN wooed big-name talent, including Fox News anchor Chris Wallace, to join the service." It's probably less a tech spend and more of on-air talent and content spend. I believe they already had a streaming app so presumably they would have leveraged that existing work. This being said it is still an eye-popping sum for an entry into an already overcrowded market.
  - gcanyon 5y ago
    It’s insane to me that companies keep paying ex-Fox-talent to go mainstream. That’s like paying porn actors to make the jump to non-porn media: the skill sets required and reputation needed are just different. There are a few exceptions on both sides, but (sorry not sorry) Chris Wallace is not his father, and can never be his father.
    - mbg721 5y ago
      Evidently Andy Rooney's kids are/were also involved in TV news to varying degrees, although I don't think any of them tried to market themselves in such a way that subscribers could hear about little things about daily life that annoyed each of them. 60 Minutes reputations clearly aren't hereditary.
    - bogomipz 5y ago
      Mike Wallace was sui generis and very much hard journalism . There's a actually good documentary on him called "Mike Walllace is Here." https://www.imdb.com/video/vi3821321241 https://www.imdb.com/video/vi3821321241
    - robonerd 5y ago
      I suspect most of these people don't really hate each other as much as they pretend on TV. That goes for politicians too. There are exceptions I'm sure.
- newman314 5y ago
  Zucker was trying to spend big to get into the streaming space. For example, poaching Kasie Hunt... "CNN is trying to hire dozens of people to help fuel its move into the streaming arena, and one person familiar with the matter said Hunt was offered an annual salary of between $1 million and $1.5 million that NBC News felt it simply could not match. This person suggested that Hunt could play a pivotal role in CNN’s streaming efforts, appearing online at moments of great national importance, such as during presidential elections." https://variety.com/2021/tv/news/kasie-hunt-departure-nbc-news-msnbc-1235021493/ https://variety.com/2021/tv/news/kasie-hunt-departure-nbc-ne...
  - JackFr 5y ago
    Signaling maybe? When Fox was becoming the 4th TV network, they massively overpayed for NFL football, but it sent the message to affiliates that they were serious and not half-assing it. The signaling theory doesn’t necessarily translate to a consumer subscribers, but maybe to other industry players.
- tootie 5y ago
  Marketing and talent. They probably had to give Chris Wallace and Audie Cornish multi-year commitments to spend their reputation on a risky venture.
- synicalx 5y ago
  Did they actually SPEND the capital, or just set it aside? Even if they were going around filling DC's with transcoders I feel like they'd have a hard time spending $300M that fast, unless they grossly overestimated the size of their audience.
A4ET8a8uTh0 5y ago
It is pretty amazing, when you see it in raw numbers. You might be onto something. I work in a very different industry, but I recently found out I am part of two separate projects championed by different executive teams with two different vendors working on the same solution. Pet projects are a time honored tradition of executives since time immemorial. I do not accept the possibility it is a mistake. It is some weird corporate politics that is way above my pay grade.
- _dh54 5y ago
  > It is some weird corporate politics that is way above my pay grade. If you looked into these things you’d see it’s very much below your pay grade.
aperson_hello 5y ago
190M doesn't pass the sniff test for revenue - as 38k/employee probably doesn't pay their average salary (much less overhead, equipment, travel, etc.). This might be their gross profit though? Here's a source for $1.7B revenue (sounds more reasonable): https://www.pewresearch.org/journalism/fact-sheet/cable-news/ https://www.pewresearch.org/journalism/fact-sheet/cable-news... But, your point still stands!
- hajile 5y ago
  I wonder if they mean net profit. Their number would be around 11% of that 1.7B which seems on point.
kristjansson 5y ago
That revenue figure seems wildly inaccurate. Pew (via a third party research firm) estimates CNNs 2020 revenue at $1.7B: https://www.pewresearch.org/journalism/fact-sheet/cable-news/ https://www.pewresearch.org/journalism/fact-sheet/cable-news...
djohnston 5y ago
Because there is no tangible accountability once you reach the executive level. The worst you get is a golden parachute wide enough to retire 50 normies.
bloodguard 5y ago
Money laundering? Shareholder lawsuit bringing in a forensic accountant would be interesting.
CyberRabbi 5y ago
> Is this some kind of money funneling scheme or an exec's pet project? Nearly every large scale institutional / bureaucratic initiative is a money funneling scheme. It doesn’t cost 300M to get a streaming service off the ground. Execs and middle managers all the way down figure out some way to inflate the budget and redirect it in ways that will profit them. It’s worse in government, exorbitant amounts of tax money is extracted as profit.
scarface74 5y ago
Google is like “hold my beer”. https://killedbygoogle.com/ https://killedbygoogle.com/ How much money does Google waste on products that are vanity projects so engineers can show “impact” and “scope” that get killed within a year?
- xnx 5y ago
  As a Google enthusiast, I appreciate the comprehensiveness of that list, but what it includes is ridiculous. A toy watch face app ("Together") doesn't belong in the same list as Google Reader. I don't think I saw anything on that list that cost $300 million and was killed after a month.
  - scarface74 5y ago
    Wouldn’t it be better to kill something fast instead of letting it linger after people are counting on it? But then again, CNN didn’t abandon a project that ruined streets throughout an entire city.. https://www.theverge.com/2019/4/16/18381466/google-fiber-louisville-kentucky-3-84-million-road-repair-shallow-trenching-service-cancelled https://www.theverge.com/2019/4/16/18381466/google-fiber-lou...
  - ulfw 5y ago
    No but Google+ cost billions and was killed too late
subsubzero 5y ago
hey this is ATT we are talking about(CNN's parent owner), they paid $85B for Warner bros in 2018, and really haven't seen much a return on their investment with Game of Thrones winding down, the new matrix movie being horrible, and then spun it off for half its value ($43B). Lets then look into directv the other dud that ATT bought for $67B and spun it off a few years later into a $16.25B standalone company. For those who are keeping count thats $92B lost in the matter of a few years which is astonishing! CNN itself is a deeply troubled network, its old CEO(Zucker) had to step down due to sleeping around with a direct report, Chris Cuomo (a cnn exec)was fired for helping out his brother(the Gov. of NY) escape sexual assault allegations, another top CNN producer(John Griffin) was arrested(and fired) on child molestation charges. In addition to all that the viewership is sinking like a rock so its not surprising that CNN+ was dropped so quickly.
- deleted 5y ago
  [deleted]
ren_engineer 5y ago
Probably similar to Hollywood accounting where even a massive loss is just used to avoid paying taxes on profits in other places. Big companies really can't lose

tonguez 5y ago

scarface74 5y ago
Did this just turn into a QANon board?

_fat_santa 5y ago

I have a hard time understanding how it can cost $300M to stand-up a platform like that. Like where are they spending their money? Can someone in this space enlighten me about how this kind of stuff is so expensive. It it just all about contracts and broadcast rights?

ianmf 5y ago
They probably cut market research funding to obtain that $300M.
- creaghpatr 5y ago
  They retained McKinsey to forecast adoption, bet that wasn't cheap.
  - chiefalchemist 5y ago
    Inverse to the number of subs
A4ET8a8uTh0 5y ago
Advances for talent; that is likely a good chunk of it.
brentm 5y ago
Marketing spend was a big part.
- legitster 5y ago
  Of which, a lot was probably spent on their own in-house platforms.
- quux 5y ago
  really ineffective marketing spend if you ask me. I watched a fair amount of CNN during the early phases of the Ukraine war and I would be hard pressed to tell you what shows CNN+ offered that were compelling enough to justify yet another streaming subscription. I vaguely know Chris Wallace had a show but I think I learned that from a NYTimes profile, not any of CNN's marketing.
  - bombcar 5y ago
    Incredibly ineffective marketing spend - the first time I heard of CNN+ was all the "CNN+ is completely dead" articles.
    - usrn 5y ago
      Same here and it launched as I was making a transition from hard left to hard right and moving from an urban area to a suburban area so I should have been in pretty much every group you could possibly target (except maybe people who watch CNN?)
      - boppo1 5y ago
        ... what constitutes hard right?
        usrn 5y ago
        You can look through my comment history but I self censor to avoid getting banned. Also my username is an acronym. You're welcome to try expanding it.
wmf 5y ago
I assume much of the money was for original content. There's a $100B+ bubble in original streaming content going on right now.
- jlmorton 5y ago
  That's not a bubble. The film and television business has always been huge, and consumers pay to watch it. It's not even clear there's been any increase in real terms. There might be a shift to streaming, but the industry size has remained relatively constant in real terms.
  - cwkoss 5y ago
    The supply of content has exploded by several orders of magnitude. Much of it is totally free. Heck, some evenings I pause a show and find myself having spent 2 hours scrolling tiktok. Video IP is drastically overpriced right now, and its never going to return to 1990's levels of cultural dominance.
    - volkk 5y ago
      > The supply of content has exploded by several orders of magnitude. Much of it is totally free. Heck, some evenings I pause a show and find myself having spent 2 hours scrolling tiktok. i'm of the opinion that a big reason for this is while quantity has gone up, quality has plummeted. if you were watching something interesting/worthwhile, you would have been less likely to find tiktok more interesting than the crap on netflix.
      - ethbr0 5y ago
        IMHO, a little of column A and a little of column B. It's happening from both sides. As quantity goes up, cultural relevance of any particular single show goes down. Thus it becomes harder to run a platform on "one" hit, thus everyone turns to the Netflix model of a billion micro-targeted shows, thus demand for content becomes a series of niche requirements, and anything actually creative has to percolate through them (a la Joker's "Sure, I'm a superhero movie" or La Casa de Papel's "Sure, I'm a Spanish Ocean's Eleven" or Dark's "Sure, I'm a German Stranger Things"). That's hard, and so what you actually get for the majority of content is the media equivalent of a box of Crayola crayons -- 256 different colors, with zero depth under the surface.
bogomipz 5y ago
I think there's probably some insight in this quote from the article: >"CNN wooed big-name talent, including Fox News anchor Chris Wallace, to join the service." It's probably less a tech spend and more of on-air talent and content spend. I believe they already had a streaming app so presumably they would have leveraged that existing work. This being said it is still an eye-popping sum for an entry into an already overcrowded market.
- gcanyon 5y ago
  It’s insane to me that companies keep paying ex-Fox-talent to go mainstream. That’s like paying porn actors to make the jump to non-porn media: the skill sets required and reputation needed are just different. There are a few exceptions on both sides, but (sorry not sorry) Chris Wallace is not his father, and can never be his father.
  - mbg721 5y ago
    Evidently Andy Rooney's kids are/were also involved in TV news to varying degrees, although I don't think any of them tried to market themselves in such a way that subscribers could hear about little things about daily life that annoyed each of them. 60 Minutes reputations clearly aren't hereditary.
  - bogomipz 5y ago
    Mike Wallace was sui generis and very much hard journalism . There's a actually good documentary on him called "Mike Walllace is Here." https://www.imdb.com/video/vi3821321241 https://www.imdb.com/video/vi3821321241
  - robonerd 5y ago
    I suspect most of these people don't really hate each other as much as they pretend on TV. That goes for politicians too. There are exceptions I'm sure.
newman314 5y ago
Zucker was trying to spend big to get into the streaming space. For example, poaching Kasie Hunt... "CNN is trying to hire dozens of people to help fuel its move into the streaming arena, and one person familiar with the matter said Hunt was offered an annual salary of between $1 million and $1.5 million that NBC News felt it simply could not match. This person suggested that Hunt could play a pivotal role in CNN’s streaming efforts, appearing online at moments of great national importance, such as during presidential elections." https://variety.com/2021/tv/news/kasie-hunt-departure-nbc-news-msnbc-1235021493/ https://variety.com/2021/tv/news/kasie-hunt-departure-nbc-ne...
- JackFr 5y ago
  Signaling maybe? When Fox was becoming the 4th TV network, they massively overpayed for NFL football, but it sent the message to affiliates that they were serious and not half-assing it. The signaling theory doesn’t necessarily translate to a consumer subscribers, but maybe to other industry players.
tootie 5y ago
Marketing and talent. They probably had to give Chris Wallace and Audie Cornish multi-year commitments to spend their reputation on a risky venture.
synicalx 5y ago
Did they actually SPEND the capital, or just set it aside? Even if they were going around filling DC's with transcoders I feel like they'd have a hard time spending $300M that fast, unless they grossly overestimated the size of their audience.

A4ET8a8uTh0 5y ago

It is pretty amazing, when you see it in raw numbers. You might be onto something. I work in a very different industry, but I recently found out I am part of two separate projects championed by different executive teams with two different vendors working on the same solution. Pet projects are a time honored tradition of executives since time immemorial. I do not accept the possibility it is a mistake. It is some weird corporate politics that is way above my pay grade.

_dh54 5y ago
> It is some weird corporate politics that is way above my pay grade. If you looked into these things you’d see it’s very much below your pay grade.

aperson_hello 5y ago

190M doesn't pass the sniff test for revenue - as 38k/employee probably doesn't pay their average salary (much less overhead, equipment, travel, etc.). This might be their gross profit though? Here's a source for $1.7B revenue (sounds more reasonable): https://www.pewresearch.org/journalism/fact-sheet/cable-news/ https://www.pewresearch.org/journalism/fact-sheet/cable-news... But, your point still stands!

hajile 5y ago
I wonder if they mean net profit. Their number would be around 11% of that 1.7B which seems on point.

kristjansson 5y ago

That revenue figure seems wildly inaccurate. Pew (via a third party research firm) estimates CNNs 2020 revenue at $1.7B: https://www.pewresearch.org/journalism/fact-sheet/cable-news/ https://www.pewresearch.org/journalism/fact-sheet/cable-news...

djohnston 5y ago

Because there is no tangible accountability once you reach the executive level. The worst you get is a golden parachute wide enough to retire 50 normies.

bloodguard 5y ago

Money laundering? Shareholder lawsuit bringing in a forensic accountant would be interesting.

CyberRabbi 5y ago

> Is this some kind of money funneling scheme or an exec's pet project? Nearly every large scale institutional / bureaucratic initiative is a money funneling scheme. It doesn’t cost 300M to get a streaming service off the ground. Execs and middle managers all the way down figure out some way to inflate the budget and redirect it in ways that will profit them. It’s worse in government, exorbitant amounts of tax money is extracted as profit.

scarface74 5y ago

Google is like “hold my beer”. https://killedbygoogle.com/ https://killedbygoogle.com/ How much money does Google waste on products that are vanity projects so engineers can show “impact” and “scope” that get killed within a year?

xnx 5y ago
As a Google enthusiast, I appreciate the comprehensiveness of that list, but what it includes is ridiculous. A toy watch face app ("Together") doesn't belong in the same list as Google Reader. I don't think I saw anything on that list that cost $300 million and was killed after a month.
- scarface74 5y ago
  Wouldn’t it be better to kill something fast instead of letting it linger after people are counting on it? But then again, CNN didn’t abandon a project that ruined streets throughout an entire city.. https://www.theverge.com/2019/4/16/18381466/google-fiber-louisville-kentucky-3-84-million-road-repair-shallow-trenching-service-cancelled https://www.theverge.com/2019/4/16/18381466/google-fiber-lou...
- ulfw 5y ago
  No but Google+ cost billions and was killed too late

subsubzero 5y ago

hey this is ATT we are talking about(CNN's parent owner), they paid $85B for Warner bros in 2018, and really haven't seen much a return on their investment with Game of Thrones winding down, the new matrix movie being horrible, and then spun it off for half its value ($43B). Lets then look into directv the other dud that ATT bought for $67B and spun it off a few years later into a $16.25B standalone company. For those who are keeping count thats $92B lost in the matter of a few years which is astonishing! CNN itself is a deeply troubled network, its old CEO(Zucker) had to step down due to sleeping around with a direct report, Chris Cuomo (a cnn exec)was fired for helping out his brother(the Gov. of NY) escape sexual assault allegations, another top CNN producer(John Griffin) was arrested(and fired) on child molestation charges. In addition to all that the viewership is sinking like a rock so its not surprising that CNN+ was dropped so quickly.

deleted 5y ago
[deleted]

ren_engineer 5y ago

Probably similar to Hollywood accounting where even a massive loss is just used to avoid paying taxes on profits in other places. Big companies really can't lose