Winfrey's decision lifts Discovery Channel into a new league

Z ON TV

Moving to cable, the daytime diva lifts the Maryland-based Discovery Channel into a new league

November 22, 2009|By David Zurawik | david.zurawik@baltsun.com

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."

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