The very-recent Lance Armstrong interview—which siphoned off some 19% of American Idol ratings—is the latest in a string of positive revenue and ratings-boosting moves for the network which has had problems rising out of the obscurity of three-digit channel locations on MSOs across the nation (even FiOS still doesn’t offer the channel with all of its packages) since its launch two years ago.
The New York Times has taken notice of this, and also notes a few other developments at the network that may end up putting it on par with Lifetime, Oxygen and We.
We noted that OWN saw boost in the number of homes in which the network can be seen as a result of a new distribution deal last April with Comcast. The agreement added 3 million viewers and Comcast will begin paying subscriber fees for the network this year.
AdAge also reported that “Oprah and Lance Armstrong: The Worldwide Exclusive” scored about $100,000 for a two-unit package, with advertisers getting a spot in both nights of the special.
More good news, excerpted from The Times story:
Another turning point — perhaps even bigger — came this month when OWN started to pocket substantial per-subscriber fees from some of the biggest cable and satellite operators in the country.
Some of these deals were made before OWN even had its premiere. The operators agreed to pay just a penny or two per subscriber a month until January 2013, and then start paying nearly 20 cents a month on average. The fees increase over a span of several years.
Multiply those dimes and quarters across most of the 83 million homes in which OWN is available (but not all — at least one deal is still pending) and the value for Ms. Winfrey and Discovery Communications is plain. Discovery, OWN’s other owner, has said that the channel will turn a profit for the first time in the second half of 2013. Discovery has invested more than $400 million to date.
Big scoops like the sit-down with Mr. Armstrong can bring her back, at least temporarily. OWN is trying to capitalize on the interview by spreading it over two nights, by raising advertising rates and by running some ads for other programs on the channel. To make sure people can find the interview, OWN is running Internet and print ads and promoting a channel finder tool.
“When Oprah does what you know she’s going to do — get the big gets — it just provides a big spotlight on all the good that’s been going on,” said OWN co-president, Erik Logan, who cited two successful reality shows, “Welcome to Sweetie Pie’s” and “Iyanla: Fix My Life,” and an Emmy Award for Ms. Winfrey’s “Super Soul Sunday.”
Success for OWN is relative. Last year, 325,000 people watched the channel on a typical night, 160,000 of whom were 25 to 54 years old. About 50 broadcasters and cable channels had a bigger audience. But OWN was up about 30 percent over its first year, 2011.
Publicly, the low point for the channel seemed to come in March 2012, when the channel decided to lay off 30 employees, about 20 percent of its work force. The layoffs and the cancellation of a talk show by Rosie O’Donnell helped the channel to save $50 million a year and achieve profitability more quickly.
OWN has captured a significant share of the African-American viewing audience, which partly explains the channel’s decision to sign a deal with Ms. Winfrey’s fellow superstar Tyler Perry, who is known for his sitcoms that star African-American actors. Mr. Perry’s new scripted series will make its debut on OWN in May.
The channel has also attracted viewers during the day with repeats of “Dr. Phil” and “The Nate Berkus Show;” updates on old episodes of Ms. Winfrey’s own talk show; and a heavy dose of crime and mystery reality shows from other Discovery channels.
While episodes of “48 Hours” and “Main Street Mysteries” may not be exactly on brand for Ms. Winfrey, they do rate. Logan said OWN was grateful to have the repeats for now, and expected to become less dependent on them. “We’re focused on creating more depth for the network,” he said.
RBR-TVBR observation: Oprah established herself as the queen of daytime talk shows with an appointment-viewing audience. The network—launched across the country in the high digits of pay cable systems—never caught on because she ended her show instead of transitioning it to the new network. As we’ve said before, OWN’s best move would be to just bring back her daily talk show. But in essence, getting blockbuster interviews and publicizing the heck out of them may do the trick as well. No doubt, when that two-part Lance Armstrong aired, they had a ton of promotional spots for other shows on the network. If she can still bring in top newsmakers for the sit-downs she’s famous for, this programming model should work.