CNN will invest $40 million over the next two years in Great Big Story, transforming the in-house social video startup into a 24-hour streaming channel.
Time Warner's cable-news network launched Great Big Story in 2015 to make short videos about offbeat places and people, like a mountain climber with no arms or legs, or the inventor of the Dothraki language from HBO's "Game of Thrones." The goal was to distribute videos on social media to reach millennials who don't watch CNN on television.
Starting next summer, Great Big Story will enter a new chapter, using the funding to fill a full-day programming schedule with a wider array of content, including live programming or feature-length films. It'll distribute the streaming channel on the growing number of web-TV services like Dish Network's Sling TV or AT&T's DirecTV Now, said Andrew Morse, general manager of CNN's digital operations. "This investment is to build something entirely new," he said.
Morse said he wants to create "live experiences," like using drones or virtual reality to broadcast from a wildlife migration in the Serengeti or the bottom of a coal mine. CNN could eventually turn the online feed into a standalone subscription service or a traditional TV network, Morse said.
"We consider it a brand that plays well across all sorts of platforms," he said.
Great Big Story, which has 40 employees, has raised $70 million to date and is valued at $200 million to $250 million, according to a person familiar with the matter. It expects to break even at the end of this year, not including its latest investment, Morse said.
Vice Media, the millennial-focused media company backed by Walt Disney Co., 21st Century Fox and others, last year introduced its own cable network, Viceland. Vice was valued at $5.7 billion in a new round of funding announced this week, getting $450 million from private equity firm TPG.
CNN's investment in Great Big Story is the latest example of a fast-moving convergence in television, where traditional channels are pouring money into online startups to make shows for a younger, cord-cutting generation. NBC Universal, for instance, has invested $400 million in BuzzFeed and $200 million in Vox Media. On Monday, Time Warner became the latest big media company to invest millions in making shows and buying ads on Snapchat.
Online media startups like BuzzFeed and Vice are also producing shows for TV, where the advertising market is much larger than in online video.
Most Great Big Story videos are less than three minutes long. The company's content reaches 30 million to 60 million people a week. On internet-connected TVs, its viewers watch, on average, 38 minutes a session. And their average age is 27 -- a demographic coveted by advertisers and much younger than CNN's audience on television, which is 58 years old on average.
"When we talk about 'cord-cutters' and 'cord-nevers' they're squarely in that demographic," said Chris Berend, co-founder of Great Big Story and CNN's senior vice president of digital video. As more online TV services emerge, "the distribution points are nearly infinite," Berend said. "There's enormous opportunities globally."
As part of the new funding, Morse said Great Big Story also plans to start a series of festivals next fall to celebrate "remarkable feats of storytelling" -- including poetry, video and music. CNN is still determining which town will host the festivals, which will be filmed and become regular programming on the new channel.
The investment comes as CNN's owner, Time Warner, is awaiting approval to be bought by AT&T. The next iteration of Great Big Story would seem to fit into AT&T's plans for beaming entertainment and news directly to people's phones. "The future of mobile is video and the future of video is mobile," AT&T CEO Randall Stephenson said last year.
-- Bloomberg News