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11/20/2009

Oprah's OWN Ready to Make Cable Sell

By: Claire Atkinson, Broadcasting & Cable

On the heels of Oprah Winfrey's announcement Nov. 20 that she will end her syndicated talk show in 2011, distribution executives at OWN: The Oprah Winfrey Network are losing no time in getting out and selling the forthcoming empowerment-oriented service to the cable systems operators. And Lady O is going to come with a price.

The new channel is attempting to use the media buzz around Oprah's announcement to generate excitement around the service, which will launch officially in January 2011, three years after the concept was first announced.

According to several executives in the cable distribution field, the channel is pitching itself at between 10 cents to 15 cents a subscriber. Other executives familiar with the discussions say the channel is being pitched for 40 to 50 cents per sub. Discovery Communications declined comment. That's relatively high for a new channel, say cable experts, but it's warranted given Oprah's draw. One highly placed cable industry executive observed, "Honestly, would you want to be the MSO that takes a hard stance on fees and keeps Oprah unavailable in your geography after it launched? That is an invitation for churn."

The industry average for per-household-subscriber fees paid to channel operators is between 20 cents and 25 cents, though that figure includes the costly sports service ESPN.

What About the Programming?

One distribution executive observed, however, that cable operators want more precision on what kind of programming will air on the network.

"‘Reflecting her values'-what does that mean?" asked one executive. "Will the programming go beyond Oprah? Will people be willing to watch a documentary on schools in Africa that might be much longer than a segment on her show?"
OWN will replace Discovery Health, which was offered to operators as a free service since it began life as a digital service. While OWN will finally turn in some revenue for Discovery Communications and Oprah's Harpo Productions, the companies still need to honor covenants that mandate what kind of programming the new channel will carry. Executives familiar with plans say the service will have plenty of health-themed programming to cover that.

An announcement that will give more detail on programming plans is expected in the next few days. It appears that OWN will only be able to program non-scripted series given Winfrey's development deal with Time Warner's HBO.

Gary Lico, president and CEO of Cable Ready, a program development and distribution consultancy, said OWN falls into a slightly different category than other women's networks. "There is a need for this," said Lico. "People want life-affirming networks that aren't just religious."

Lime, a cable service that offered such things as yoga and spirituality programming, failed, however. But Lico added: "We're not talking about a niche when Oprah's name is on it."

Discovery and OWN issued a statement today, confirming the launch date of January 2011. In the statement Discovery CEO David Zaslav said: "We look forward to bringing her and her creative vision, programming and unique voice to approximately 80 million homes on OWN, as well as online through the award-winning Oprah.com."

The statement also asserted the service would have 80 million subscribers. Discovery Health is currently in 74 million homes. The additional six million homes are a projected number based on increases in cable take-up over the next 12 month period.

Spearheading the channel's distribution is Allan Singer, executive vice president of distribution and strategy, who's based in Los Angeles. Singer was previously senior vice president of content acquisition at Comcast Corp. and was also senior vice president of programming investments at the MSO. His appointment had some puzzled over why Discovery isn't in charge of distribution and using its large portfolio of services for leverage. Discovery has however drafted two top executives to help the service get off the ground, advertising chief, Kathy Kayse, who previously sold Discovery's digital assets and Science Channel general manager, Debbie Myers, who is acting general manager now at OWN.
Additional reporting by Alex Weprin

Source: http://www.broadcastingcable.com/article/390061-Oprah_s_OWN_Ready_to_Make_Cable_Sell.php?rssid=20065


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