Xtra Credit Assignment

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San Jose State University *

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121B

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Management

Date

May 17, 2024

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docx

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Uploaded by SuperHumanThunder12272 on coursehero.com

1 Summary of CNN+ Launch CNN+ can be summarized as a new streaming subscription service launched by CNN. It offers its subscribers interactive programming, news, and exclusive CNN+ shows and movies for $5.99 per month or a discounted offer of $59.99 annually (Huynh & Vogel, 2023). CNN+ aims to provide CNN viewers with more entertainment sources by offering one thousand hours of content that is on demand and 12 live broadcast shows. Subscribers can access documentaries on various themes, including dynasties, historical events, thought leaders, and significant corporates. Additionally, there are lifestyle tips on various topics, such as healthy eating and parenting (Huynh & Vogel, 2023). The service also allows customers to present their concerns about the product in advance or live, addressed live on air. The service was launched on March 29, 2022. The launching was two weeks before Warner Bros, which is CNN's then-parent company, merged with Discovery. Investment Decisions My point of view would be to keep the present CNN+ in light of the financial estimates made by CNN for CNN+ and three investment choice criteria (Net Present Value, Internal Rate of Return, and Payback Period). The cash flow (after deducting the annual operating expense from the annual revenue) shows an NPV of $2.39 billion under the assumption of a necessary rate of return (I) of 12%. Therefore, since the NPV is positive and the project is anticipated to bring value to the company, we should approve it. The Internal Rate of Return (IRR) we have next, at 71.23%, is significantly higher than the needed rate of return (12%), indicating that we should approve the project. The Payback Period is approximately 4.11 years, which is thought to be a reasonable length of time. However, because it is prejudiced against brand-new long-term initiatives and disregards the time worth of

2 money, it shouldn't be taken into account in our main decision criteria. Given all these monetary considerations, I would advise continuing CNN+ because it is a long-term lucrative investment. However, as these figures are based on an estimate for the following ten years, other factors should be considered before making a choice. Impact of Decision About CNN+ on Public Image The decision to end or continue CNN+ would significantly affect CNN's public image. Launching CNN+ was CNN's attempt to expand into other platforms and provide viewers with more entertainment sources. CNN's public image could be positively affected if CNN+ was successful. The organization's revenue will increase while attracting more subscribers, ensuring a strong brand image. The consumers and investors would significantly perceive CNN as an innovative organization that strategically adapts to the ever-changing and more dynamic media landscape. If CNN+ is a failure, it may also harm CNN's reputation as a trustworthy organization. The public might view the streaming service as having been poorly thought out, which would erode trust in CNN's ability to make wise business decisions. Additionally, if the decision to end CNN+ results in employee layoffs, CNN's public image may suffer. Backlash and negative press coverage may result from this. Therefore, it is clear that the choice of whether to end or continue CNN+ could have a big impact on CNN's reputation. If there are any aspects of CNN+ that dissatisfy subscribers, CNN should address these issues. Second, CNN could spend more money on marketing and promotion to make CNN+ more visible. As a result, this could lead to an increase in subscribers, which would be beneficial for CNN's brand image.

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