The CNN unit of Time Warner (TWX) has been charging $25 a year for viewers to watch video on its website CNN.com. But, not anymore. The video service is going "free".
The all-news channel says that its is changing its practice of charging subscribers because it want to sell advertising on the video feed instead. However, the new, free service will not carry ads yet.
CNN did not bother to mention the real reason that it changed its model. That is that its competitor MSNBC and a number of other video news sites give their web video programming away for free.
The move by CNN is another example of companies surrendering to the trend of free web video. To some extent the movement was fuel by YouTube where all video is free including some high profile programming from TV, music publishers, and cable channels.
It puts producers of high-cost programming like CNN in a bind. While it is hard to make money on free, it is also not clear that major TV advertisers will pay much to move their messages to programming online.
Mark it up to another reason that the major media companies with studio and TV businesses hate YouTube. It is creating viewing habits that undermine their ability to make money.
Douglas A. McIntyre