Oprah Winfrey move lifts Discovery higher, higher
The news that "The Oprah Winfrey Show" is going to end after 25 years so that its host can devote herself to a new cable channel set off reverberations in TV and financial circles late last week. But nowhere was the effect felt more keenly than in Silver Spring, where the Maryland-based Discovery Communications was vaulted into a new realm of prominence and prestige as the future home of The Oprah Winfrey Network.
Discovery, a cable channel once known for showing inexpensive documentaries, has found itself the talk of both Wall Street and Madison Avenue, as everyone from financial analysts to managers of network affiliates and -owned stations that depend on "The Oprah Winfrey Show" to provide an essential lead-in to their early evening newscasts wondered how the move would affect them.
"In one swoop, this jumps Discovery and, by extension, cable up to another league," says Douglas Gomery, media economist at the University of Maryland, College Park. "There's been a narrowing between the lowest-rated network and the highest-rated cable shows. Football on cable made the first breakthrough; this is the second, a cable TV talk show with Oprah. And the financial ramifications of that are huge."
Friday morning, a tearful Winfrey stood before her Chicago audience to make the formal announcement of the news that broke Thursday night. The 55-year-old broadcaster - who got her talk-show start in 1976 at Baltimore's WJZ-TV - deftly made it sound almost as if the decision had come down from on high.
"After much prayer and months of careful thought, I've decided the next season, Season 25, will be the last season of 'The Oprah Winfrey Show,' " she said. "I love this show. This show has been my life. And I love it enough to know when it's time to say goodbye. Twenty-five years feels right in my bones. And it feels right in my spirit."
But even as she was delivering those words in her TV temple, Wall Street was calculating how many of hundreds of thousands or millions of dollars, depending on market size, Winfrey's decision was going to cost stations in lost revenue. They were also handicapping winners and losers.
J.P. Morgan was already circulating an analysis titled "Much Ado About Oprah" on Friday. It offered the best, no-spin, hard-nosed critique on the street.
"Discovery appears to be the 'winner' in this announcement," the Morgan analysis says. "We think OWN should benefit from not having 'The Oprah Winfrey Show' on competing broadcast stations. However, the extent of Ms. Winfrey's on-air involvement is still to be determined."
Noting that Winfrey's "network will come out of the gate with over 70 million households" as Discovery re-brands the Discovery Health Channel as OWN, the Morgan analysis also notes that the network's launch has been delayed several times. It was initially scheduled for a launch this year but has been delayed until 2011, without any explanation. There were similar delays and issues when Winfrey helped form the Oxygen cable channel for women in 1998. Winfrey, however, claims it was never her vision, and eventually severed ties with that operation.
But such past matters were quickly dismissed amid all the speculation as to what Winfrey's move will mean to her and her new Discovery partner.
Discovery has come a long way from its modest beginnings in Landover in 1985 with154,000 subscribers. Today, it encompasses 10 channels, including Animal Planet, TLC and the Science Channel. Several of its franchises and series have cut through the cable clutter and found a solid niche. Who hasn't at least heard of "Deadliest Catch," "Storm Chasers, "Dirty Jobs" or Shark Week"?
Still, Discovery Communications has been making in money in 2009 at a time when many other broadcast and cable outlets are hurting. Profits for the first quarter of 2009 for Discovery Communications rose to $119 million from $34 million in the same period in 2008.
"There is no bigger brand in media than Oprah Winfrey," David Zaslav, Discovery Communications president and CEO, said. "She has changed the broadcast landscape and how people consume television. Along the way, she has impacted our culture and touched us all. Discovery Communications has a tremendous partner in Oprah, and 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."
No words were more important in the wake of the announcement than the ones in a Friday statement from Winfrey's Harpo Productions, which said that the talk-show host plans to "appear and participate in new programming for OWN."
That's big news, because initial reports of the 50-50 partnership between Winfrey and Discovery Communications that have been circulating for more than a year said she would not do a talk show on cable. Winfrey, Harpo and Discovery have been intentionally vague because of the potential that Winfrey might have contractual difficulties with broadcast stations that have bought "The Oprah Winfrey Show" into 2011.
If a new show is announced for OWN, those stations might find advertisers reluctant to buy time on a show seen as a lame duck when they can hold their money for the new Oprah talk show on OWN.
That's why the Harpo statement also said that she would appear on-air at OWN "only after production wraps" on "The Oprah Winfrey Show."
But in the end, the deal makes sense only if Winfrey does a talk show on cable, and that statement indicates she will.
"That will be the game-changer," Gomery says. "Cable already has most of the best dramas on TV. It has sporting events that draw audiences comparable to the broadcast networks. Its news channels are gaining on the networks every day. And now, it will have the most popular talk show on television - with this star that is such a force."
University of Syracuse pop culture scholar Bob Thompson says that any analysis of the move has to allow for the fact that Winfrey is a "force of culture and nature" who cannot be underestimated.
"Oprah Winfrey is more than a TV show, she's a lifestyle," Thompson says. "With the magazine, book club, radio, the acting in movies, producing TV shows, she's a cultural empire. Just as a TV figure, she's in a league with Walter Cronkite, Johnny Carson and Mr. Rogers. So the last thing you want to do is underestimate her."
But pointing to a decline in ratings and sky-high syndication fees that have made her show what the Morgan report termed a "loss leader" for some stations, Thompson says, "To make this work, she will have to do her talk show on OWN because, in the final analysis, the entire Oprah cultural empire is built around her being on TV five days a week."
Thompson believes, "There is a legitimate question as to whether she will ever be as big on Discovery" as she is now on easy-to-find broadcast stations like Baltimore's WBAL.
"But even if she never is this big again, this deal still gives Discovery a flagship like it's never had before. I wonder how many people never heard of Discovery Health before the news that it was about to become the Oprah Winfrey Network."
Comments
Very thorough article Z. I have been so wrapped up in Jon & Kate, Palin and healthcare this week. I did not stop to think about Oprah and wall street.
I did see the end of a cnbc show about "the Oprah effect" this week. Just the tail end.
Oprah is going to be a force to be reckoned with & Discovery is getting a great opportunity.
I just do not understand this. She has accomplished many many goals. If I were her I would want to sit back and enjoy it. Travel, spend time with family, do the things on my bucket list. Do the rich and famous really get that addicted they can never walk away?
Something to chew on...definately. Every action causes a reaction.
Yes, Irene, I beleive many of them do get addicted. Look at Dan Ratherr, still running around trying to be the old Dan Rather even though it appears almost nobody is watching or cares. Z
Posted by: Irene | November 22, 2009 10:22 AM
I read the JP Morgan article. I guess that even though CBS will lose it will not be as significant as if she would have gone to a competing network. That was interesting to me because I would have thought that Oprah would have been a larger loss for CBS. I guess shows like Judge Judy actually rate higher. This was a good article and kind of put into perspective that Oprah might not be as big as I imagined. I still like her and wish her luck. Irene and Z you are right she is worth billions of dollars why go on in the entertainment industry. She must LOVE it.
Posted by: Sherry T. | November 22, 2009 11:39 AM
Oh yea, I loved Discovery Shark Week. I think that Discovery Channel does do some very good and informative shows. That would be an idea Z. Lets do some more Discovery channel shows like Shark Week. Maybe Oprah will go the documentary route. There is an idea for her if she does not want to do a talk show for OWN.
Posted by: Sherry T. | November 22, 2009 11:47 AM
This was an interesting article about Oprah and how much CBS will lose in contrast to the other article from JP Morgan. In any event, I think that Discovery channel is banking on the fact that this will be a win-win for them. I am sure if Oprah holds onto the quality programming she has done in the past it will be. I really would like to see her to some documentaries maybe about women or black women or her effect on the media and television because she has had a big impact.
http://www.nypost.com/p/news/business/cbs_loses_halo_y4QOiNyTMZv20EpWEl4WVN
Posted by: Sherry T. | November 22, 2009 12:48 PM
Reliable Sources did an Oprah segment today. This is being announced so very early in terms of us viewers but behind the scenes she is setting the foundation for this switch. I agree with the segment, "Things Oprah touches turn to gold"
Also, I had alot of respect for Jerry Springer keeping things in perspective today. Just because Oprah is moving doesn't mean other good things cannot take their place.
This is sort of off topic but ties in. This is a big move for Oprah. Further there are other "media musical chairs' happening. Abc is moving Dianne Sawyer and thinking about moving Stephanopoulos. John King moving to Dobbs. What will happen to Leno. I hope we keep following this. Timing is everything.
Think about it. Won't some of these moves like Oprah cause other networks to have to move/merge/go out of business in the long run? It is gonna be a new decade soon and it is going to be interesting to see
this plays out.
Posted by: Irene | November 22, 2009 1:28 PM
Money equals power. Oprah has power on top of power. It makes me very cautious of what she's selling.
Posted by: Finallyover | November 22, 2009 2:21 PM
Oprah should have plenty of extra time to write more books and travel now that she no longer has her show to occupy so much of her life
Posted by: Dean Sanderson | November 22, 2009 6:21 PM
This was very interesting. I read another article (I forget where) that talked about the difficulties of a cable channel vs network and it sounds like it will be quite the challenge. But Oprah's gut certainly has a good track record!
Irene, I think people do indeed get addicted. In Oprah's case, I've heard her say on her soul series, that she truly believes everything she does is her life's purpose and that is to teach, educate, and put people's stories out there. I always thought that must be the greatest feeling, to have no doubts or confusion as to why you are here ans what you should be doing.
And yes, I know I sound like an Oprah dittohead!!
Posted by: sparklycig | November 22, 2009 9:09 PM
sparklycig,
I agree with you and Irene. Oprah knows what she wants. Maybe she has given up a personnal life, but she worked hard and accomplished a lot. She can be proud of that. I hope that she has no regrets.
I know Columbus, Ohio. We live about an hour east of it. It is a great city. We have the Nationwide Children's Hospital, which is outstanding.
Posted by: Sherry T. | November 23, 2009 7:58 AM
Sparklycig, I am a dittohead to then. I do think she is a brand of a brand all in and of herself. There will be many,cough cough, like Kate Gosselin, who think they can fill her high heels, but will be sadly disappointed.
Posted by: Irene | November 23, 2009 8:05 AM
Morning Z,
I think we should do a poll on what we think Kate's "new reality" will be since that is what TLC will be basing their new show on. What could Kate's new reality possibly be that would be compelling enough that it warrants a show of its own, especially if the children aren't going to be filmed? Would it just be a couch interview of what Kate did that day? I cannot fathom it. Any ideas?
Posted by: Marie | November 23, 2009 10:20 AM
Marie, I bet monkey munch that they are developing a talk show format for her. This winter she will need to get an implant of an earpiece device so they can feed her her lines. Flop. Seriously, my guess is Tlc does not have a talk show and she is going to get one.
Posted by: Irene | November 23, 2009 11:10 AM
Oprah was one of the founding partners of Oxygen channel & the early ideals certainly didn't last. She cut herself out of Oxygen & it would not be surprising if the something similar happened down the line.
Posted by: td | November 23, 2009 11:50 AM
Marie,
I think your poll is a good idea. What will Kate do? She has voiced her anticipation on doing movies or commercial voice overs, or voices for amimation. Also we could have a poll on who thinks Sarah Palin will run in 2012.
Posted by: Sherry T. | November 23, 2009 11:53 AM
As Whoopi Goldberg pointed out quite vociferously on this morning's "The View", why are folks getting their panties all in a twist (my words, not Whoopi's) over Oprah's leaving Network T.V. when, in fact, she isn't calling it quits 'till Sept. of 2011, w/ almost two whole years of The Oprah Winfrey Show on ABC to look forward to? I guess we could call it 'the long goodbye'.
Although Oprah claims she will be absorbing every scintillating, significant, emotional moment on air from now until her Fall 2011 finale, I'm hoping , like many lame-duck politicians, she doesn't just kind of mail it in , so to speak; you know just go thru the motions. Okay, you can put away your daggers, folks. I'm just being a smart-ass here. Realistically, I'm sure Oprah, who always works her professional butt off, and always tries to be the best she can possibly be, will continue to entertain, educate, and enlighten as only this genuine force-of-nature can . They really did break the mold w/ Oprah. I do wish her the very best. She will excite, and engage, and make a profound difference where-ever her career takes her.
As a fair-weather, occasional Oprah viewer and not really in the female core Oprah audience- demographic, I generally enjoyed her show, whether it was a one-on-one w/ Mariah Carey, or a discussion on constipation, or other sundry human maladies w/ Dr. Oz. So much of Oprah's broad appeal (no pun intended, w/ the broad) is her willingness to open up to her audience on a very personal level, revealing her failings, foibles, and fears in such a transparent and very human manner. By sheer example she is, and will continue to be a positive, life-affirming force in thousands of peoples lives. My only minor criticism of her would be her uber-exuberance, bordering on out-right fawning, when introducing some of her celebrity guests. But then, no one on T.V. today can pull off an intro like Ms. Winfrey. Well maybe that ring announcer on the WWF
telecasts.
How appropriate that the working moniker for Oprah's new Cable venture is OWN. Hmmm........
what doesn't this intrepid, entertainment mogul w/ the Midas touch, NOT own? (HA!)
ALEX
Posted by: ALEX MCCRAE | November 23, 2009 7:48 PM
I like Discovery just the way it is. I hope they dont let her mess it up.
Posted by: sophia | November 24, 2009 3:06 PM
Hi Sophia, I do not like how Discovery allows its partners like the Lying Channel treat children on Reality shows. I hope Oprah messes that up.
Posted by: Irene | November 26, 2009 5:40 PM