Oprah Winfrey’s endorsement usually makes any product successful. As the Oprah Winfrey Network prepares to start on January 1, Discovery Communications is betting the talk-show host’s pull extends to cable TV.
“This channel will have her name on it,” said Christina Norman, the former MTV president who is now OWN’s chief executive officer. “It’s something that she doesn’t want to be anything but great.”
OWN could be profitable in three years, Norman said. The network, which Oprah’s Chicago-based Harpo will own jointly with Discovery, is not a sure bet, Bloomberg Businessweek reports in its December 13 edition. Some cable and satellite operators are resisting Discovery’s demands for fees triple what they pay for Discovery Health, the channel converting to OWN. Advertisers coaxed aboard with a personal call from Oprah will want to see healthy ratings.
“No one has ever created a whole channel with original programming from scratch,” Ron Schneier, chief operating officer of online advertising service MyVideoRights and a former executive at A&E Channel, said in an interview. “It has its share of risks.”
Viewers won’t see Oprah 24/7. The 56-year-old host to 7.2 million TV viewers can’t have a daily talk show on the cable channel until September, after her syndicated programme ends its 25-year run. For now, she’s committed to appear on OWN 70 hours a year, and will be seen on specials and a reality show chronicling her programme’s final season.
Programmer-in-Chief
Oprah has also become her network’s programmer-in-chief. To close a deal for a talk show by Rosie O’Donnell, Winfrey hopped on a jet with Norman and former Viacom CEO Tom Freston, her consultant on the channel, for a sit-down at the comedian’s New York-area home. She convinced Duchess of York Sarah Ferguson to do a six-part series of documentaries by e-mail.
“You don’t say no very easily to Oprah,” Freston said in an interview.
Discovery, which has agreed to loan OWN $189 million, is pressing cable and satellite TV systems to pay three times the 7 cents per subscriber it was getting monthly for Discovery Health.
DirecTV has so far refused, waiting for its existing deal with Discovery to expire in more than two years, said a person with knowledge of the talks. Norman said some operators who are waiting out their existing Discovery Health contracts may end up paying more. “I say, sign on now,” she said. “I’m betting on OWN.”
‘Tough’ transition
Translating a single show into an entire TV channel is “tough,” said former BBC Worldwide America President Garth Ancier. The key, said Ancier, also a former NBC and Fox programming chief, is finding the right people and shows to complement Oprah’s tone. He said he’s confident OWN will work.
So are advertisers, who are counting on the channel’s “Live Your Best Life” slogan and inspirational programming to win viewers, said Catherine Warburton, executive vice president at the Universal McCann ad agency.
OWN will generate $101.7 million in ad revenue its first year, up from $18 million at Discovery Health last year, estimates Derek Baine, an analyst with researcher SNL Kagan. He forecasts Oprah and Discovery will spend more than $162.3 million next year on programming, a fivefold increase from Discovery Health’s spending.
At the outset, the channel will air a mix of new shows and reruns of “The Best of Dr. Phil,” advice programs from the likes of Dr Mehmet Oz and Suze Orman, movies, and “Mystery Diagnosis,” a Discovery Health leftover.
Network drama
Oprah’s channel has already produced plenty of drama. OWN’s president and two programming executives have departed, and the network is starting a year behind schedule. In August, Discovery nearly doubled its original $100 million investment, while Winfrey doubled the 35 hours she had committed to be on-air.
“We were just starting and really didn’t know all the things we wanted to do,” said Peter Liguori, Discovery’s chief operating officer. Winfrey and executives at Harpo declined comment for this story.
Discovery has been telling advertisers to expect an audience size similar to Discovery’s TLC, ranked sixth among women aged 25 to 54 — the same demographic OWN targets. OWN also is asking for the same lofty ad rates, said Brad Adgate, director of research at Horizon Media, General Motors, Procter & Gamble, and retailer Kohl’s have signed on.
“We think OWN has a very substantial opportunity,” CEO David Zaslav told analysts on December 7.
Lifetime, bravo
Star power doesn’t always guarantee success. Martha Stewart’s daily block of programming on Crown Media Holdings’ Hallmark Channel was pared this year to five hours from eight.
OWN also faces competition from A&E Television Networks LLC’s Lifetime and NBC Universal’s Bravo, two of the top cable outlets among Oprah’s demographic.
