- Media company CNN will acquire Canopy, which developed the Tonic news-reader app, in a deal where terms were not disclosed, according to a post on Canopy's website.
- The AT&T Inc.'s WarnerMedia network has plans to use Canopy's technology for its news aggregation service. "It will be a brand new way to get all sorts of news and media from all sorts of sources out to the world in the right way," Canopy said on its site.
- Canopy will maintain its teams and offices in Brooklyn and Boston, which will reopen when the pandemic subsides.
CNN's acquisition of Canopy comes as the company has reportedly been working on a new digital news service similar to ones offered by Apple and Facebook, per The Hollywood Reporter. CNN's news and information platform will focus on connecting users to trusted sources, storytellers and creators across a number of topics, per the post on Canopy's website.
While CNN's viewership — like many cable news broadcasters — is getting a boost during the coronavirus pandemic, the media company is looking to adapt to the new ways in which consumers read and digest content in the long term. Canopy supports personalization using a combination of both human curation and on-device machine learning that adapts what is served based on what the user interacts with while promising to maintain user privacy. The Tonic app takes a streamlined approach to content aggregation, recommending just five pieces of content each day for users to make it more digestible.
Traditional media companies have long been looking for ways to develop new products in digital formats that allow them to generate ad revenue and offset losses as more consumers go online for their news. The broadcasting giant has an opportunity to introduce the CNN brand to new audiences with a personalized news platform, thereby opening opportunities to sell more ads and subscriptions.
However, finding the right formula for a news apps that can attract younger consumers has been a struggle for mainstream media, underscoring the challenge CNN faces in launching a new service that would ostensibly compete against Facebook and others who currently are major news sources for many consumers.
Canopy had previously raised $4.5 million led by private equity firm Matrix Partners, according to a report in Variety, which also reported that the company's other investors hailed from Spotify, WeWork, Splice, E14 Fund and Keybase.