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(Reuters) - CNN Worldwide President Jim Walton said on Friday he is leaving the once-dominant cable news network, which has been plagued by low ratings in recent years.
Phil Kent, chief executive of Turner Broadcasting, will begin a search for a new president, the network said. Walton is departing on December 31.
"CNN needs new thinking. That starts with a new leader who brings a different perspective, different experiences and a new plan," said Walton, 54, CNN's president since 2003.
Walton will be staying on to oversee presidential election coverage, allowing CNN time to search for a new executive who can then start with a clean slate at the beginning of 2013.
"It makes sense to use the next six months that program themselves with the Olympics, the conventions, the election and the inauguration to plot wholesale changes for next year," said Davidson Goldin, former editorial director at MSNBC.
CNN, founded in 1980 and now owned by Time Warner Inc, has tried to hold the middle ground in its news coverage, a position that some blame for its ratings erosion, while ratings have risen for competitors Fox News and MSNBC, which blend news with opinion and political commentary.
News Corp owns Fox, while MSNBC is now owned by cable giant Comcast Corp after its purchase of NBC two years ago.
The opinion programs on No. 1 cable news network Fox News skew conservative, while commentaries on MSNBC leans liberal.
From last September until the week ended July 22, CNN has trailed both networks, pulling in an average of 584,000 total viewers in prime time, compared with Fox's 1.82 million viewers and MSNBC's 726,000 viewers, according to Nielsen.
For the second quarter, CNN posted its weakest prime time ratings in 21 years, and total viewers fell 35 percent from a year earlier. It also received criticism in June for initially misreporting a Supreme Court health-care ruling.
CNN is now tasked with finding a new leader that will need to both boost ratings to drive revenue growth and reinvent the network's brand, said Outsell Inc media analyst Ken Doctor.
"Instead of just moving the pieces around which is what they've done on TV, they've got to rethink what they stand for and what they want the audience to believe about CNN and what it delivers," Doctor said.
Industry sources said CNN should go outside the network for Walton's replacement to inject new energy into what they believe has become a stodgy brand. One name press reports have speculated upon for CNN in recent months is Jeff Zucker, who gained a reputation as a news producing whiz while at the "Today" show. Zucker's producing talent helped him rise all the way to the CEO post at NBC before being ousted in the Comcast takeover. He is now producing "Katie," the new talk show hosted by Katie Couric that is premiering on ABC this fall.
But if CNN decides to look in-house for Walton's successor industry observers said possible candidates could include the head of its U.S. operations, Ken Jautz, and Mark Whitaker, an executive vice president and managing editor.
One positive for CNN under Walton's stewardship has been its financial performance; the network is highly profitable. This year, CNN is on track to post record operating profit of $600 million.
"When Jim Walton assumed the presidency of CNN in 2003, it was underperforming and earnings were in serious decline," said Time Warner Chief Executive Jeff Bewkes in a statement. "Since then, he and CNN have tripled earnings, doubled margin and delivered annual growth of 15 percent."
CNN also reaps profit from its affiliate fees which are on the pricier side for cable networks, according to SNL Kagan. The research firm estimates that CNN currently charges carriers fees of 57 cents per subscriber per month, which tops MSNBC's 18 cents per subscriber but trails Fox's 90 cents per subscriber.
Under Walton, CNN debuted shows such as "Anderson Cooper 360" and "The Situation Room with Wolf Blitzer," according to CNN's website.
CNN's domestic network has been undergoing a programming makeover in recent years that has produced mixed results. Its highest-rated host, Larry King, ended his 25-year run on "Larry King Live" in December 2010. "Piers Morgan Tonight," the show that now fills King's old timeslot, has grown into a solid ratings performer for CNN.
On the opposite end of the spectrum, however, is "Parker Spitzer," a talk show that featured fallen New York Governor Eliot Spitzer and Pulitzer-prize winning conservative columnist Kathleen Parker. The hiring of Spitzer brought CNN massive criticism, but it was Parker who was booted off the show after just four months. Spitzer did a short stint as a solo host but is no longer on CNN either; he now hosts a show for Al Gore's Current TV.
Time Warner shares closed up 1.6 percent at $38.98 on Friday. The company reports second-quarter earnings August 1.
Reporting By Liana B. Baker; editing by Peter Lauria, M.D. Golan and Tim Dobbyn