how-does-cnn-make-money

How Does CNN Make Money? The CNN Business Model In A Nutshell

Cable News Network (CNN) is a news-based pay television channel headquartered in Atlanta, Georgia. As a cable channel, first and foremost, CNN generates income from a few sources: advertising, video affiliate network, cable subscriptions, and repackaged content.

AspectDescription
Advertising RevenueCNN generates a substantial portion of its revenue through advertising. The network offers advertisers the opportunity to reach its vast viewership through various advertising formats, including commercials during television broadcasts, digital ads on its website and mobile apps, and sponsored content. Advertisers pay CNN based on factors such as the ad’s placement, reach, and format. Advertising revenue is a primary source of income for CNN.
Cable and Satellite Carriage FeesCNN earns revenue from cable and satellite carriage fees paid by cable and satellite television providers for the right to include CNN in their channel lineups. These providers negotiate agreements with CNN and pay licensing fees to carry the network. These fees are typically based on the number of subscribers who have access to CNN through the provider’s service.
Digital SubscriptionsCNN offers digital subscriptions to its content through platforms like CNN+ (CNN Plus). Subscribers pay a monthly fee to access premium content, including live streaming of CNN’s television broadcasts, exclusive documentaries, and additional digital features. Digital subscriptions provide CNN with a recurring revenue stream and diversify its income sources.
Syndication and LicensingCNN syndicates its news content to other media outlets, both domestically and internationally. It also licenses its content for use in various formats, including print publications, websites, and radio broadcasts. These syndication and licensing agreements generate revenue for CNN by allowing other media organizations to use its news content.
Event Hosting and ConferencesCNN hosts events, conferences, and forums on various topics, including politics, business, and culture. These events may feature high-profile speakers and experts. Revenue is generated through ticket sales, sponsorships, and exhibitor fees. Hosting events provides CNN with an opportunity to engage with its audience and monetize its expertise in journalism.
Affiliate Sales and MerchandiseCNN may generate revenue through affiliate sales and the sale of merchandise, such as books, documentaries, and branded products. Affiliate programs involve earning a commission for promoting products or services through affiliate links. CNN may also sell merchandise related to its news coverage and programming. These additional revenue streams contribute to CNN’s overall income.
Challenges and CompetitionCNN faces challenges related to competition in the media industry, as there are numerous news outlets and digital platforms vying for audience attention and advertising dollars. Maintaining viewership and relevance, addressing issues related to trust and accuracy in journalism, and adapting to changing media consumption habits are ongoing challenges.
Future Growth StrategiesCNN’s future growth strategies may involve: – Digital Expansion: Continuing to invest in digital platforms and streaming services to reach a broader audience. – International Expansion: Expanding its presence in global markets through localized content and partnerships. – Content Diversification: Expanding its content offerings beyond news into areas like documentaries, lifestyle programming, and entertainment. – Subscriber Engagement: Enhancing subscriber offerings and engagement on digital platforms.

History of CNN

 

Cable News Network (CNN) is a news-based pay television channel headquartered in Atlanta, Georgia.

The multinational was founded in 1980 by media proprietor Ted Turner and Reese Schonfeld. Anchored by husband and wife team David Walker and Lois Hart, CNN became the first 24-hour news service.

In the process, it also became the first American channel devoted entirely to news coverage.

In the ensuing decades, the reach of CNN expanded significantly. Content now encompasses multiple cable and satellite television, website content, and specialized closed-circuit channels.

The company now operates no fewer than 42 bureaus, 31 of which are based internationally. A second, dedicated news channel called CNN2 (the precursor to HLN) launched in 1982.

During the 1990-91 Gulf War, CNN was the only news outlet with the ability to communicate from inside Iraq. This bolstered the network’s reputation as a news provider and also made some of its (previously unknown) reporters household names.

Today, the company remains a popular source of news content. With approximately 2.366 million primetime viewers, CNN is second only to Fox News for viewership.

CNN revenue generation

As a cable channel first and foremost, CNN generates income from a few sources.

Let’s now take a look at each.

Advertising

When a brand wants to run advertising on a CNN-owned channel, it must pay an advertising fee. This fee is likely to be significant given the channel is ranked second for prime time viewership in the United States.

Brands can also pay to promote themselves on the CNN website, which is heavy in news article sidebar and footer advertising.

Video Affiliate Network

The CNN Video Affiliate Network (VAN) is a form of hosted revenue sharing. Here, the company provides the technical infrastructure necessary for affiliates to host content on their local news websites.

Once the videos are live, CNN collects advertising revenue which it then shares with the affiliate.

VAN content incorporates:

  1. CNN ad sales – where inventory is bundled and made into a national network suitable for sale to national advertisers.
  2. Content hub – which aggregates, normalizes, and synchronizes CNN content with content provided by local news services.
  3. Local news organizations – who manage their local inventory and can monetize content at their discretion.

Cable subscriptions

CNN also makes money via cable subscriptions. When a viewer purchases a cable subscription, the cable company pays CNN a fee to include its content in the package. This charge – which is sometimes called the fee-for-carriage – is typically around $8 per year per subscriber.

It should be noted that this fee is charged regardless of whether the customer actually watches CNN. 

Repackaged content

CNN also repackages news content in limited scenarios. News is provided to airports on a closed channel and a similar service is also offered in some hotels.

Lastly, foreign networks may also pay CNN to repurpose content for their news bulletins.

Key takeaways:

  • CNN is an American multinational news-based pay television channel. Founded by Ted Turner and Reese Schonfeld, it became the channel to offer dedicated, 24-hour news coverage.
  • With high prime-time ratings, CNN likely makes a significant amount of money from TV advertising. Digital advertising is also prevalent on the CNN website.
  • CNN also collects a fee-for-carriage, or a fee cable providers must pay for hosting its content. In limited circumstances, the company also sells repurposed content to hotels, airports, and foreign affiliated networks.

Key Highlights

  • Introduction:
    • Cable News Network (CNN): A news-based pay television channel headquartered in Atlanta, Georgia.
    • Founded in 1980 by Ted Turner and Reese Schonfeld.
  • History:
    • CNN became the first 24-hour news service, dedicated entirely to news coverage.
    • Expanded reach to multiple cable and satellite TV, website content, and specialized channels.
    • Operates 42 bureaus, including 31 internationally.
  • Revenue Generation:
    • Advertising:
      • Brands pay advertising fee to run ads on CNN-owned channels.
      • CNN website features news article sidebar and footer advertising.
    • Video Affiliate Network (VAN):
      • Provides technical infrastructure for affiliates to host CNN content on their local news websites.
      • CNN collects ad revenue and shares with affiliates.
    • Cable Subscriptions:
      • Cable companies pay CNN a fee to include content in cable packages.
      • Fee-for-carriage, around $8/year/subscriber, regardless of actual viewership.
    • Repackaged Content:
      • Provides news content to closed channels in airports and some hotels.
      • Foreign networks pay to repurpose CNN content for their news bulletins.
  • Key Points:
    • CNN generates income from advertising on TV and website.
    • Cable subscriptions contribute revenue through inclusion in cable packages.
    • CNN Video Affiliate Network shares ad revenue with local affiliates.
    • Repackaged content is sold to airports, hotels, and foreign networks.

Read Also: Who Owns CNN, Who Owns Fox News, How Does Yahoo Make Money, How Does Google Make Money.

Main Free Guides:

Related Publishing Business Models

Who Owns CNN

who-owns-cnn
Cable News Network (CNN) is an American news multinational founded in 1980 by media mogul Ted Turner and Reese Schonfeld. CNN is part of Warner Bros. Discovery, a massive group comprising brands such as Discovery, Warner Bros, HBO, HGTV, Food Network, and many others. The Warner Bros. Discovery group generated over $33 billion in revenue in 2022, primarily owned by institutional investors.

New York Times Business Model

the-new-york-times-business-model
The New York Times generated over $2 billion in revenues in 2021, $1.36 billion in subscriptions, $497 million in advertising, and $215 million in other revenues. Of the subscription revenues, over $773 million were generated by digital subscriptions, while printed subscriptions generated $588 million.

Google Business Model

google-business-model
Google is a platform, and a tech media company running an attention-based business model. As of 2021, Alphabet’s Google generated over $257 billion in revenues. Over $209 billion (over 81% of the total revenues) came from Google Advertising products (Google Search, YouTube Ads, and Network Members sites). They were followed by over $28 billion in other revenues (comprising Google Play, Pixel phones, and YouTube Premium), and by Google Cloud, which generated over $19 billion in 2021.

Facebook Business Model

facebook-business-model
Facebook, the main product of Meta, is an attention merchant. As such, its algorithms condense the attention of over 2.91 billion monthly active users as of June 2021. Meta generated $117.9 billion in revenues in 2021, of which $114.9 billion was from advertising (97.4% of the total revenues) and over $2.2 billion from Reality Labs (the augmented and virtual reality products arm). 

Twitter Business Model

how-does-twitter-make-money
Twitter makes money in two ways: advertising and data licensing. In 2021, Twitter generated $4.5 billion from advertising and $570 million from data licensing. While Twitter generated $5 billion in total revenues, it lost 221 million.

Medium Business Model

how-does-medium-make-money
Medium is an online media platform leveraging the concept of social media for journalism, where writers are prompted to the platform to build their following through in-depth writings and essays. The platform follows a freemium model, and it makes money by prompting users to subscribe to articles behind paid walls (Medium charges $5/month or $50/year), and writers are paid based on readership.

Wikipedia Business Model

how-does-wikipedia-make-money
Wikipedia is sustained by the Wikimedia Foundation, supported mostly by donations and contributions, which in 2021 amounted to over $153 million. Wikipedia is among the most popular websites on earth, and it is, as of these days, an open, non-profit project, on which twelve other projects have been developed.

WordPress Business Model

how-does-wordpress-make-money
WordPress.org became the most popular CMS and blogging platform in which the Foundation owns the trademark, and revenues come from donations. The Foundation holds a public benefit corporation that manages the revenues from WordPress events and conferences. Automaticc – the business arm – monetizes premium tools built on WordPress.com (a premium platform) through freemiums.

Squarespace Business Model

how-does-squarespace-make-money
Squarespace is a North American hosting and website-building company. Founded in 2004 by college student Anthony Casalena as a blog hosting service, it grew to become of the most successful website-building companies. The company mostly makes money via its subscription plans. It also makes money via customizations on top of its subscription plans. And in part also transaction fees for the website where it processes the sales.

Wix Business Model

wix-business-model
Wix is an Israeli provider of cloud-based web development services and is perhaps best known for its drag-and-drop website builder. Founded in 2006, the vision was to empower anyone to build their own site without coding, thus creating a drag-and-drop solution. Wix operates on a freemium model to attract customers to its platform, where those are prompted to enroll in one of its subscription plans.

About The Author

Scroll to Top
FourWeekMBA