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Comment by TheAceOfHearts | Hacker News Reader

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/

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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...

But, your point still stands!

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

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?

I assume much of the money was for original content. There's a $100B+ bubble in original streaming content going on right now.

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.

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.

> 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.

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.

I disagree on the quality thing - TV shows are markedly better than ever. Even the crappiest sitcom produced today is a zillion light-years better than 99% of the 80s/90s production. Yeah, some of it is formulaic, but it always was.

The problem really is the interface. There is so much stuff and you have to manually select what you want, so the best items are actually harder to find - whereas before you could just sit at your telly on a given time.

My takeaway is that with so many different alternatives, its becoming decreasingly economically rational to produce series/film. The budget of the series I was watching was almost certainly 100x+ the budget of the random people on tiktok I was scrolling past, collectively.

>i'm of the opinion that a big reason for this is while quantity has gone up, quality has plummeted.

Two dudes with a couple middling cameras and a tripod can shoot stuff that passes for professional.

Look at the big YouTube channels. They're as good or better than reality TV ever was.

Netflix has spent years borrowing more money than it makes to produce and obtain content.

The other major streaming services outside of Apple and Amazon can take advantage of the “flywheel” where they can make money on the same content multiple ways - syndication, video on demand, theatres etc.

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-ne...

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.

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.

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.

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

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.

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.

They probably cut market research funding to obtain that $300M.

They retained McKinsey to forecast adoption, bet that wasn't cheap.

Inverse to the number of subs

Marketing spend was a big part.

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.

The problem with modern CNN is that it learned the wrong lessons from Fox: market personalities and mix opinion with news.

CNN was at its best when it had none of that. What was interesting was live reports from Baghdad as AA lit up the sky, not anyone's opinion or the name attached. You know, what used to be called "news".

Thankfully, the new CEO seems to agree.

https://www.wsj.com/articles/david-zaslav-wants-to-distingui...

Hopefully it's not all just puffery.

Incredibly ineffective marketing spend - the first time I heard of CNN+ was all the "CNN+ is completely dead" articles.

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?)

... what constitutes hard right?

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.

United Stations Radio Networks?

United States RussiaN?

USeRName?

Union of Socialist Reddit Nationalists?

Utopian Science Resisting Natalist?

We're shooting in the dark here. The only thing I could glean from your post history is that you might complain about woke people, and even that is really vague.

Looking at your post history you're probably far enough left that everyone on the Right blends together. As people like me become more common you will probably be completely blindsided by the monster you've awakened.

Also you got pretty close with one of your guesses, if you want to get it right you need to stop thinking about what people on the left are doing/saying.

If people on the right are diverse and not "blended together", how would be possible for me to guess your political indentity?

Sure, you could be a Monarchist, Conservative Christian, Reagan Conservative, Centrist, Classical Liberal, AnCap, libertarian, etc.

But all the secrecy points to things it would be rude to guess: nazi, strasserite, pedofile, burgundist, etc..

Of which, a lot was probably spent on their own in-house platforms.

Marketing and talent. They probably had to give Chris Wallace and Audie Cornish multi-year commitments to spend their reputation on a risky venture.

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.

Advances for talent; that is likely a good chunk of it.

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...

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.

> 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.

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.

> 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.

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

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

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.

Google is like “hold my beer”.

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?

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.

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-lou...

No but Google+ cost billions and was killed too late

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