Why Did CNN Acquire A Social Media Video Startup?

Time Warner Inc 's ( TWX ) CNN network reportedly acquired video sharing app startup Beme on Monday. CNN plans to launch a standalone media venture with this acquisition, which would solely be aimed at the millennial viewers. Moreover, the new media brand would employee all of the 11 employees of Beme, co-founded by popular YouTube film-maker Casey Neistat and former Tumblr VP of Engineering Matt Hackett. However, the original Beme app and service, with around 1 million downloads, would shut down before the launch of CNN's new venture in summer of 2017. The financial aspects of the deal have not been disclosed yet.

This deal comes a year after CNN launched Great Big Story , a digital-only publication dedicated to untold stories which was also targeted at millennial audiences. CNN, in addition to its news offerings, is resorting to digital means to grow further and expand its reach in key demographics as it inclines towards such start-ups.

What Is Beme?

Beme allows users to shoot and share quick, unedited video clips. It doesn't let users view their videos while they are being filmed or edit their videos before they are posted from the app. The main idea behind the app is that it lets people create authentic content as opposed to the concept of picture-perfect Instagram feeds or heavily filtered Snapchats. The app managed to garner many followers at the time of its launch in 2015 but it struggled to grow and compete with other popular apps and was unable to hold on its followers in the long run.

How Will CNN Benefit From This Deal?

CNN aims to attract the millennial audience of Beme and plans to integrate Beme's technology in the new company and develop mobile video capabilities for CNN's portfolio of digital properties. (( CNN Acquires Social-Video Startup Beme ,, Nov 28 2016)) Additionally, the media network plans to hire dozens of producers, builders, developers, designers and content creators for the new venture. The primary purpose of this deal seems to be to bring authenticity to the news and media environment and draw in a younger audience that has largely been untapped by the cable news network.

In the era of cord cutting where traditional media companies are losing out to various digital platforms, such digital initiatives could help companies such as Time Warner maintain a long term growth prospect. Though it is still unclear as to what shape the Beme project will take, we can expect CNN to revamp its digital capabilities to connect to new audiences in 2017.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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