"CNN needs new thinking," CNN President Jim Walton wrote in a note to staff. "That starts with a new leader who brings a different perspective, different experiences and a new plan, one who will build on our great foundation and will commit to seeing it through."
Mr. Walton, who has served as president for a decade, will depart from CNN at the end of the year, remaining on board throughout election coverage.
CNN has been stuck in third place in prime time, behind cable-news rivals Fox News and MSNBC, and the network saw its lowest ratings since 1991 in the second quarter. In prime time, CNN averaged 446,000 total viewers, a 35% decrease from the year prior and 129,000 viewers in the coveted 25-54 demographic, a 41% plunge from the same period in 2011.
One ad buyer said CNN's place in the market has begun to change, even if some marketers prefer it to stay healthy because it gives them an option for news content that is less partisan. ""CNN has become a hard buy," this buyer said, noting that CNN has long had high CPMs, or a cost of reaching a thousand viewers, a common measure in TV-ad negotiations, owing to its long life. "News is not that important to pay that kind of premium and we can find the audience elsewhere," the buyer added.
The network, along with Fox, made headlines last month, when it incorrectly reported the U.S. Supreme Court's decision on President Barack Obama's health-care law.
CNN did receive a boost to ratings last week following the shooting in Colorado during the premiere of "The Dark Knight Rises." CNN's prime-time audience surged 125% on July 20 to 1.1 million, according to Nielsen. Mr. Walton, 54, said in the note to staff that he had been talking to Turner Broadcasting Chairman-CEO Phil Kent about leaving the network over the past several months.
Mr. Walton's departure suggests parent company Time Warner sees a need for better performance at the venerable outlet, which defied the odds in 1980 when Ted Turner founded it as the first 24-hour TV news service. In 2010, CNN was estimated to contribute to 12% of Time Warner 's consolidated operating income, thanks not only to its U.S. news channel but also its international service and the licensing fees it gets from news affiliates that use its content.
While CNN is largely considered an important outlet because it does not attempt to place a partisan spin on events, it has seen its status slip while others gain ratings by appealing to particular audiences. Time Warner may no longer have the ability or patience to wait while CNN tries to hook back on to success by sticking to its guns. In doing so, however, CNN has made a flurry of quick changes in recent months, including testing out a show featuring former New York governor Elliot Spitzer; moving Anderson Cooper's program earlier in the evening;and replacing Larry King with former tabloid editor Piers Morgan. The network has also struggled with its morning programming.
"There's always pressure," Mr. Walton wrote in his note, adding: "I feel really strongly about a number of parts of this company. We're having a really strong year internationally and in mobile. It's clear there's a lot of spotlight on CNN's U.S. performance and it's reasonable that there is that spotlight."
Mr. Walton began working at CNN in 1981 and took over as president in 2003, when the company was underperforming, said Time Warner Chairman and CEO Jeff Bewkes in a prepared statement. "[He] tripled earnings, delivering an annual growth of 15%. In his nearly 31 years of uninterrupted and distinguished service to CNN, Jim has been instrumental in growing the business into the financial powerhouse it has become, while establishing the brand as the worldwide leader for television news."
Now Time Warner must consider whether CNN's brand, forged over many years, needs to be crafted anew in a changing landscape.