CNN thinks it’s figured out what a post-cable network looks like, and it’s betting $70 million on it

CNN wants to turn its social video content experiment Great Big Story into a stealth cable network – without the cable TV part that is.

The company is pumping $40 million of fresh capital into GBS, the web-video venture CNN rolled out in 2015 as something of an alternative to Vice Media. That brings CNN’s investment total to $70 million overall, and values GBS in the neighborhood of $250 million, Bloomberg reported, though CNN is the sole owner/investor.

With GBS, CNN wants to create a next generation “cable network” without having to follow the traditional path of inking distribution deals with a slew of cable TV distributors.

To date, GBS has featured primarily three to five-minute videos on out of the way locales (like giant waves on Lake Erie), unique characters (like the guy who’s voice was used by AOL’s “You’ve Got Mail” notifications in the 1990s), and unusual sports (like combat juggling).

The clips have been primarily distributed on Facebook and YouTube.

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But now the plan is to produced a full-fledged 24/7 network starting in the summer of 2018 that will be licensed to emerging digital cable TV alternatives, like DirecTV Now, Sling TV, and similar streaming offerings from Hulu and YouTube. In these digital TV packages, GBS could appear as its own channel or in programming blocks. GBS also wants to license its video to hubs like Verizon's go90 and Comcast's Watchable, and ultimately linear TV stations around the world.

That means GBS will produce more longform content and even some live shows, which could feature anything from drone-shot views of wildlife, to live shots from placid beaches, explained Andrew Morse, EVP of editorial for CNN US, and GM of CNN Digital Worldwide.

Business Insider caught up with Morse and the GBS team at the Cannes ad festival on Tuesday.

Morse said that his team had to make a business case for GBS to CNN's management team, much like any venture capital-backed media startup would. Their plan was to use the funding to hire more staff and expand into more high-end programming.

"There are two reasons we are doing this," Morse said. "For one, there's an economic reason, as the market for OTT ["over-the-top" of the cable bundle] content is frothy right now. And we've been methodically building an audience base, and now have an idea of what a modern channel would look like. We're at this inflection point where if you don't expand, you just become a really good production studio."

When GBS launched, there was a question hanging over the digital media marketplace as to whether you could build a loyal audience, and a true consumer brand, mostly by popping up into feeds on other companies (e.g. Facebook's) platform. Thus far, GBS has amassed over 4.3 million Facebook fans and a million YouTube followers through its mix of inspiring or wonder-inducing content. It's not uncommon for some videos to rack up hundreds of thousands, if not millions of views, like this feature on a dog who works at the Cincinnati Zoo.

"We made a bet that maybe felt naive at the time that social video doesn't have to be low quality," said Uyen Tieu, GBS' general manger. "What was so clear early on was that we had a global media audience."

And the audience kept asking for more, Tieu said, giving the GBS team confidence to expand. For example, the company tracked data showing that more GBS viewers were watching nine clips in a row on TVs via devices like Apple TVs, leading to 30-minute viewing sessions on average. Plus, in their social media comments, they often asked for more information on the videos' subjects, like a clip showcasing Syrian refugees restoring lost treasures.

"We really listened to the viewers," she said. "They keep telling us, 'I want to feel like I can experience the things I'm watching.'"

To date, GBS has mostly made its money from advertisers who pay to weave their messages into videos. The company thinks that business can be even bigger as it expands its content output, but the big bet is that unlike social media platforms, new premium streaming "OTT" companies will pay to license the GBS videos.