OWN's next challenge: Getting distributors to pony up big bucks

Having managed to woo Oprah Winfrey away from her lucrative daytime television platform in 2011 after 25 years, Discovery Communications CEO David Zaslav now faces his next big challenge: getting cable and satellite distributors to pay big bucks to carry the Oprah Winfrey Network.

Winfrey's tears had barely dried from her on-air announcement of her departure when industry insiders started speculating about how much Discovery, which is Winfrey's partner on OWN, would try to get for the cable channel.

Winfrey's OWN will take the slot currently held by Discovery Health Channel starting in January 2011. Discovery Health is in around 70 million homes. The cost to carry it is about 13 cents per month, per subscriber, according to SNL Kagan, an industry consulting firm. Others familiar with the channel say the fee is much lower. Regardless, Discovery is going to look for a big bump for OWN, perhaps as much as 50 cents per subscriber.

That is a huge price for an unproven service. It would match the price tag for cable networks such as USA and TBS that are established and would not be far behind the almost $1 per subscriber fee that TNT commands.

Of course, that is just starting off a point and odds are OWN will end with a much lower fee from cable and satellite operators. While no one doubts the power of Winfrey's brand, it's not like she'll be a 24-hour presence on the channel. She will have a show on the network but distributors are going to need more than that before shelling out what they pay for already successful channels. On top of that, Discovery is also going to be knocking on doors trying to boost fees for its new kids channel it is launching with Hasbro.

Discovery's Zaslav is nothing if not a persuasive salesman. He convinced Winfrey to bet on Discovery for her network and prior to that he was able to boost subscriber fees for MSNBC and CNBC when he ran NBC's cable business. But given the current economy and the turmoil that has already led to OWN to be delayed several times, Zaslav might not want to get too aggressive here. If he does decide to go that route, here's a piece of advice: Bring Winfrey with you. We hear she can work a room.

-- Joe Flint

Photo: Discovery Communications CEO David Zaslav. Photo credit: Discovery Communications

The Oprah effect: Winners and losers

Oprah Winfrey's decision to walk away from her daytime talk show after 25 years when her contract expires in 2011 will have a ripple effect throughout the television industry.

The big winners are Discovery Communications, which is partners with Winfrey on the Oprah Winfrey Network (OWN) that is due to launch in early 2011, Ellen DeGeneres and Warner Bros., which syndicates her daytime talk show and all the TV stations that will no longer have to compete against Winfrey in daytime.

The losers include CBS, which will no longer be able to count on the hundreds of millions that "The Oprah Winfrey Show" delivered in license fees and advertising revenue over the years. ABC is also probably not too happy. Many of its big city stations carried the show and it delivered a sizeable audience to their local news. Sony is also grumbling; it was trying desperately to woo distribution rights to Winfrey's daytime show away from CBS when her deal expired. Winfrey herself may be a loser because odds are that, at least in the short-term, she will take a financial hit by abandoning daytime talk -- although, of course, in the long-term she is building an asset that could have tremendous value.

While Winfrey and OWN are keeping quiet, the talk show queen is expected to have a visible presence on the channel when it launches. She probably will do a daily show, although it will not be a carbon copy of her current effort. This will help OWN build a brand and boost its distribution for the network.

Winfrey's departure will be the end of an era for daytime talk. She burst onto the national scene in 1986 after toiling in local TV in Nashville, Baltimore and Chicago, which is where she has made her home for almost 30 years. The late Roger King, a legendary salesman known as much for his hard-living as for his deal-making acumen, signed her to King World and made her a star, and she made him and his brother Michael incredibly rich. CBS later bought King World for $2.5 billion.

When Winfrey premiered, daytime talk was still ruled by Phil Donahue, who dealt with politics and social issues in a more refrained manner. Winfrey was boisterous and enthusiastic and endeared herself to her audience and guests. She was able to woo political leaders and movie stars to her couch and at the same time dip into the more tawdry topics that have also become a staple of TV without soiling her own reputation.

The exit of Winfrey from broadcast TV to cable is yet another sign of the paradigm shift between the two mediums. News Corp., Disney and Viacom all are powered by their cable networks, as is Time Warner. Comcast wants control of NBC Universal not for its broadcast network and TV stations, but for its cable networks. Winfrey is making the decision that she can make more money and build her brand better on cable than broadcast. A few years ago that would have seemed unthinkable, but it is clear that the greater value lies in the broadband medium. OWN, which will debut in 2011 in roughly 70 million homes, will be turbo-charged by having her on board as a regular presence.

At the same time, her own visibility will decline, at least for awhile. While actors bounce back and forth between broadcast and cable, personalities of Winfrey's stature generally stay put. Ted Koppel left ABC's "Nightline" for Discovery Channel but his presence in the cultural zeitgeist diminished and he no longer is associated with the network. Howard Stern gave up his perch on FM radio for satellite radio and though his pay day grew tremendously, he is no longer part of the daily conversation around the water cooler. Winfrey probably will have a similar adjustment. Cable is great at building some stars such as Jon Stewart and Stephen Colbert, but those who move there from broadcast face smaller audiences and diminished limelight. 

Of course, after a quarter of a century of being in the spotlight, maybe Winfrey won't mind some quiet time.

-- Joe Flint

Photo: Oprah Winfrey. Credit: Chris Pizzello/Associated Press

Discovery board doesn't hear a lot about Oprah

Discovery Communications' board of directors held its quarterly meeting today but anyone looking for news about Oprah Winfrey and her cable network was sorely disappointed.

While some of the cable programming giant's top executives made glowing presentations to the board, neither Winfrey nor her svengali Tom Freston were anywhere to be seen around Discovery's headquarters in Silver Spring, Md. Not even Christina Norman, chief executive of the Oprah Winfrey Network, made the cross-country trek for the meeting. That seems slightly unusual given all the attention around the network. 

Apparently there is little to update on the OWN, hence a song-and-dance from Winfrey, Norman or Freston wasn't seen as necessary. At this point, though, isn't the fact that there is little to update about the channel worth an update? The place has had a revolving door of executives and has been vague on its programming plans. Discovery has already pushed the date of the launch back several times. (Before some Discovery or OWN rep picks up the phone to scream, Webster's defines several as "an indefinite but small number.")

For now, OWN is not saying when it will launch, but already it seems very unlikely that it'll happen in the first six months of next year. There have been many executive shuffles and very little programming in the works so more time will probably be needed to get it off the ground. And then there are those who think ultimately that this channel will never fly.

Much of the channel's fate hinges on Winfrey, who is keeping quiet. Her move last week to dispatch one of her top executives -- Lisa Erspamer -- to Los Angeles to work on OWN set off speculation that Winfrey herself was thinking of moving her daytime talk show to OWN. Winfrey's current daytime TV contract is up in 2011.

A Discovery spokeswoman declined to comment on the board meeting.

-- Joe Flint

Photo: Oprah Winfrey. Credit: Brian Killian / Getty Images

OWN and Discovery's stumbling walk down the aisle

The union of Oprah Winfrey and Discovery Communications seemed like a match made in heaven.

But 18 months into their relationship, the couple still hasn't officially made it down the aisle, figured out what china pattern to select or how they want to decorate their new house -- even whether they want to keep the children. Let's just say they are stuck in some heavy escrow.

The two media giants had intended to launch their joint venture, OWN: the Oprah Winfrey Network, this summer. But the debut of the channel, which is scheduled to replace Discovery Health Channel, has been delayed at least a year -- until mid-2010. In the meantime, the channel has experienced a revolving door of top executives. In February, after a yearlong executive search, OWN hired former MTV executive Christina Norman to be chief executive. Two months later, the head of programming, Robin Schwartz, abruptly left the Los Angeles-based channel and just this week OWN executives confirmed that two other top programmers -- Maria Grasso and Nina Wass -- had exited after less than a year.

The departures were first reported by Broadcasting & Cable.

Channel executives attribute the changes to simple growing pains of a start-up network.
 
"Of course there is a lot of pressure, there is when you launch anything.  And this channel has to be outstanding because it has Oprah's name on it, and it has my name on it," said Norman. "A launch is great but I'm looking to build and sustain the business. We're taking the time to get it right." 

-- Meg James

PHOTOS: Oprah's diet journey in pictures

It's no secret that weight is an issue that's plagued billionaire talk show host Oprah Winfrey for decades. On Tuesday morning, the Associated Press published advanced excerpts from the January issue of O magazine, in which she admits she's back up to 200 pounds. She reportedly looks at her thinner self and thinks: "How did I let this happen again?" We take a look back at her seesaw battle with the bulge.

-- Stephanie Lysaght and Denise Martin