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CNN.com is different than other video-rich sites because of the size and expectations of its audience. The company says it delivers between 60 million and 100 million video streams a month. In contrast to local-broadcast competitors, CNN.com can match the costs of substantial technology and editorial costs with a massive audience. “If you do not have scale, you do not have a business,” says Estenson. CNN.com has also launched a free iPad application in which video is integrated into text. And CNN is hungry for more viewers. Estenson says CNN can sell “almost every single video impression we create. So we would like more video consumption.”
CNN has brought its broadcast expertise onto the web. “We program by times of day,” says Estenson. “The bell curve of visitors to our site peaks between 11 a.m. and 2 p.m. on regular news days. We’ve noticed that social media links go up a lot at night.” Sometimes CNN makes programming decisions based on a mix of demographic and editorial priorities. Estenson notes that users under the age of twenty-five, who “are disproportionately on social media,” tend to be more interested in entertainment and features rather than in hard news. So while “CNN is all about trust and reliability,” Estenson says, “for CNN.com, entertainment is one of the biggest sections of the site.”
Estenson sees contrasts between the content on CNN’s cable channel and CNN.com. Online, producers have more freedom to experiment and expand, and the content can be more daring. “Going online is a private experience, versus watching in the living room. When people are online, they seem to gravitate to things that are more provocative than they would if they were in a room with their friends.”
How profitable is CNN online? According to a presentation the network made to analysts in mid-2010, revenue for CNN overall (consisting of the U.S. and international divisions, Headline News, and digital) was about $500 million; digital advertising and content sales accounted for about 10 percent of total revenue. CNN.com’s profit margin isn’t broken out publicly by either its division, Turner Broadcasting System Inc., or by the parent company, Time Warner Inc. Estenson does say the digital operations have been profitable for the last seven years—even including corporate costs and just under 100 “dedicated digital” people on the editorial side. All of CNN benefits from a centralized publishing platform; sales and administrative expenses are spread across the three television divisions and their online properties.
CNN.com is dependent mostly on ad revenue that is sold directly by a CNN sales force. But the digital business also gets some direct corporate support. Estenson says a “select portion” of the subscription money that cable and satellite companies pay to carry CNN’s programming is used for research and development activities related to new technologies, such as smartphones, tablets, and televisions connected to the web. Thus, benefits from CNN’s digital investments flow both ways, from the traditional to the digital and back.
Estenson believes the site feeds viewers and value back to the legacy network. “Digital platforms are the entry point for the brand. More and more people will discover the brand through them,” he says. And he envisions some of the distinctions between the two platforms becoming less relevant, especially as the Internet gets a bigger foothold in living rooms.