|CNN News Group President Jim Walton is reorganizing the online video operation.
The cable news network is moving from subscription-based online video to a free ad-supported model -- a plan that echoes a shift last week by corporate sibling AOL.com -- and, come fall, it will offer a more sophisticated system with multiple live video feeds of daily news reports and features.
Sweeping broadband impact
The moves by CNN and its competitors underscore the sweeping changes being wrought across the Internet by the widespread adoption of broadband connections by consumers. Online market research firm eMarketer predicts 60% of U.S. households will have high-speed Internet access by the end of the year, turning the Web into a viable consumer-controlled TV alternative.
CNN, which has a large proprietary inventory of video, has offered news clips to subscribers who pay $4.95 a month. By eschewing the subscription fees in favor of selling 15- and 30-second ads that will run prior to the video clips, it hopes to pique an appetite for CNN.com’s broadband coverage in time for the fall launch of its next phase. Its two network competitors, Fox News and MSNBC, offer free video on their Web sites, though CNN News Group President Jim Walton said CNN sees its own original content as a point of difference. “We’re not an aggregator,” he said.
Other cable networks getting into ad-supported broadband in a big way include MTV, which recently launched five online channels under the Overdrive title, and Scripps Networks, which features ad-supported videos on its network sites Foodnetwork.com, HGTV.com and DIYnetwork.com.
Latest CNN strategy move
The online strategy is the latest in a series of moves Mr. Walton has made to bolster his company’s assets in the face of U.S. competition from Fox News. In December, he hired Jon Klein away from CBS News to run CNN's domestic operations and two months later Mr. Walton overhauled CNN Headline News’ prime-time lineup, bringing on Court TV personality Nancy Grace as the block’s anchor personality. By April, CNN had cut Fox’s lead in the advertiser-valued demo of adults 25 to 54 years old by more than half and Headline News became the No. 3-rated prime-time cable news block, surpassing MSNBC. (Fox and CNN are Nos. 1 and 2, respectively.)
Most recently, he has begun integrating CNN’s previously segregated assets, announcing a new 3 p.m. to 6 p.m. programming block on the flagship channel that will feature CNN International coverage.
“We try to look at what we have that our competitors don’t have and showcase our strengths and mask our weaknesses,” Mr. Walton said, noting that “one of our strengths is international news coverage. ... We’re the only profitable international news network."