The Wall Street Journal-20080116-Can-t Get Enough Oprah- Wait a Few Years- Winfrey- Discovery to Launch New Network in Her Likeness- But Without Her TV Show
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Can't Get Enough Oprah? Wait a Few Years; Winfrey, Discovery to Launch New Network in Her Likeness, But Without Her TV Show
Americans love "The Oprah Winfrey Show," but are they ready for the Oprah Winfrey Network?
Ms. Winfrey and Discovery Communications announced yesterday plans to launch a new channel -- which will go by the acronym, OWN -- in the second half of 2009. Ms. Winfrey will be the creative force behind the channel, developing programming on topics familiar to her viewers, such as dealing with bullying and recovering from divorce. But, at least at first, the channel will be entering a cluttered landscape without Ms. Winfrey's biggest asset, her top-rated talk show.
"The Oprah Winfrey Show," has been sold to TV stations around the country through the 2010-11 television season. While Discovery is hoping she moves the show to the network after that, she's under no obligation to do so. Ms. Winfrey said yesterday it's "possible" she'll move the show, or perhaps reruns, to OWN and will decide this fall.
Still, Ms. Winfrey has a huge public following that could make the channel a success even without her talk show. She has a successful monthly magazine, "O, the Oprah magazine," co-published with Hearst Corp., which sold an average of 2.4 million copies a month last year, according to the Audit Bureau of Circulations. Her book club is credited with turning various titles into best-sellers. She also has a satellite show, "Oprah & Friends," on XM Satellite Radio.
"This is what I've been coming to since 1988 when I realized this platform is bigger than just a television show," Ms. Winfrey says.
If OWN takes off, and particularly if Ms. Winfrey moves her talk show to the new network in a few years, the TV businesses of several major media companies could be hurt. CBS Corp. owns the syndication concern that sells the Oprah show to stations across the country. A successful OWN could also interfere with the efforts of General Electric Co.'s NBC Universal to establish a female-oriented franchise, including through its recent purchase of the Oxygen women's cable network. Executives at CBS and NBC played down the likelihood of possible negative effects down the road.
Likewise, Ms. Winfrey's talk show is also a big ratings draw on numerous local stations, including seven of the 10 ABC stations operated by ABC network owner Walt Disney Co. Those stations account for more than 25% of Ms. Winfrey's national audience, according to her production company. One ABC station not owned by Disney yesterday played down the short-term impact of competing with OWN. "I think it'll probably help more than it'll hurt because it'll continue the exposure of Oprah," said Mike Murphy, president and general manager of WBMA, the ABC affiliate in Birmingham, Ala. "And, anyway, old habits are hard to break."
Even for Ms. Winfrey, success isn't guaranteed. New TV networks not only have to compete with the major broadcast networks and hundreds of cable channels but newer video-on-demand offerings and Web video services. "I think it's increasingly hard to launch or relaunch a TV network regardless of whose name is behind it or who the parent company is," says Brad Adgate, senior vice president of research at Horizon Media, a media planning and ad-placement firm. "It's going to be tough to gain traction early on."
The market for female-oriented television is particularly tough, something Ms. Winfrey knows first hand. She was an early investor in Oxygen, a women's-oriented cable channel launched by cable veteran Geraldine Laybourne in 2000, which struggled to establish itself and was sold last fall to NBC Universal. Ms. Winfrey said she had reduced her involvement earlier, noting that "the channel did not reflect my voice."
Oxygen's much bigger and longer established rival, Lifetime Television, co-owned by Disney and Hearst, also has seen its audience erode in recent years. Daytime talk shows, including Ms. Winfrey's program, have also lost viewers the past few years. "The Oprah Winfrey Show" audience is down about 12% since 2005-06, although the show has performed better than its competitors and remains the top-rated syndicated talk show. This season it is averaging 7.3 million viewers, according to Nielsen Media Research.
Even off its peak, though, the show continues to be a huge marketing vehicle for causes espoused by Ms. Winfrey, such as books she promotes through her book club and social causes. Ms. Winfrey also says she plans to use her talk show as a platform to promote OWN, as well as new programs she will air on it.
The biggest challenge may be simply finding programming that taps into the Oprah sensibility that has made her so popular. Both the talk show and her magazine have struck a chord with a mix of self-help and spirituality -- aimed squarely at the mass market. Through all her outlets, Ms. Winfrey offers uplift, from magazine articles about why you may need to gain 10 pounds, to "Oprah's Big Give," a prime-time ABC television series due in March, in which contestants compete in philanthropic challenges for the title of "The Biggest Giver." It's a homespun philosophy Discovery President and Chief Executive David Zaslav calls "inspiring people to live their best lives."
Ms. Winfrey yesterday declined to discuss her programming plans in detail, although she emphasized that despite her demonstrated popularity with women, OWN would target a broad audience. "We're focused on men and women and their families," she said, adding that she plans to air "what I know people relate to, what's important to their lives."
Ms. Winfrey will be chairman of the 50-50 venture being created through the deal. Her company, Harpo Inc., is contributing her Oprah.com Web site, while Discovery will contribute Discovery Health Channel, which will be converted into the new channel. That gives the new channel a head start over rivals that have to lobby cable and satellite operators for distribution. Discovery Health is already available in more than 66 million homes, according to Nielsen.
For Discovery, a closely held company expected to go public in the second quarter, the deal represents a potentially lucrative gamble. It's trading an underperforming cable network -- Discovery Health averaged only 123,000 viewers in 2007, according to Nielsen -- for a share of Ms. Winfrey's future. Discovery's shareholders include John Malone's Discovery Holdings Co. and Advance/Newhouse Communications.
The deal is part of an effort by Discovery's Mr. Zaslav to convert some of the company's lesser-known channels to stronger brand names. In June, Discovery is planning to relaunch its Discovery Home channel as Planet Green, an eco-friendly lifestyle channel. Last week, its Discovery Times Channel became the crime-focused Investigation Discovery. Mr. Zaslav says Discovery Health and some of the company's other channels represent underused "ocean-front real estate" because they have relatively wide distribution on cable systems across the country.
"One of our challenges is to figure out what to do with that," Mr. Zaslav says. "In a cluttered marketplace, the ability to take one of the most powerful brands in America -- Oprah -- and put it on that foundation, that's very compelling."
Ms. Winfrey hinted yesterday that her venture with Discovery was fated. She said she met with Mr. Zaslav two days after re-reading a 1992 journal entry in which she wrote about wanting to launch a cable channel with "mindful" as opposed to "mindless" programming.
About the coincidence, Ms. Winfrey says, "That's all about what was supposed to happen."
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Rebecca Dana and Emily Steel contributed to this article.
