Can Oprah carry her audience to a cable network?
TEXT OF STORY
Bob Moon: Oprah Winfrey has had an hour on television five days a week for 25 years. It's reportedly worth $150 million a year.
But in the coming year, the show will end. And this Saturday, Oprah launches OWN, the Oprah Winfrey Network, on cable. But here's the thing: Even if she succeeds beyond everyone's expectations, Oprah will probably never have as many viewers as she does now.
Marketplace's Jennifer Collins reports.
Jennifer Collins: On Jan. 1, Oprah goes from a one-hour talk show to a 24-hour network.
Oprah: What if I could take every story that ever moved me and give it to you?
Oprah, herself, has committed to only 70 hours on-air a year. She'll star in a reality series behind-the-scenes of her current show and host hour-long biographies of her favorite people. There'll also be shows for her regulars like Peter Walsh, the guy who helps you organize your home; a series for Oprah's best friend Gayle King; even a spin-off from one of her interviews, Duchess of York, Sarah Ferguson.
Sarah Ferguson: It's great. It's exciting to be part of OWN.
Cable analysts predict OWN will get -- at best -- a million people to tune in during prime time. That's a sixth of the audience for Oprah's talk show.
James Dix: That's, to some extent, the breaks of the game in cable or pay tv network television.
James Dix follows the cable industry for Wedbush Securities. Cable networks bring in other revenue -- fees that they charge providers like Time Warner and DirectTV for every subscriber that has access to a channel each month.
Dix: In cable, those affiliate fees are a very important part of measuring the success of a network.
The Oprah Winfrey Network is taking over an existing channel, Discovery Health. Right now, that brings in around seven cents a subscriber. Dix says Winfrey's network is looking to bump that to 20 or 30 cents. He says Spike TV was one of the last successful networks to launch. That was in 2003. Spike rebranded an existing network, too -- and targeted a younger, mainly male audience, with content like this:
Guy 1: Who's hotter: Eva Mendez or Eva Longoria?
Guy 2: Mendez. She's totally smokin'.
Guy 1: Really?
Several guys: Mendez, Longoria, Mendez...
Spike's been able to drive up its affiliate fees to around 22 cents a subscriber. Some say, there's a danger Oprah's new venture could go the way of another broadcasting legend, Howard Stern. Five years ago, Stern moved from commercial radio to Sirius satellite radio.
Joseph Priester, a marketing professor at the University of Southern California, says Stern has had trouble luring people to pay the subscriptions to listen to him.
Joseph Priester: Six months into Sirius, you couldn't find him in a newspaper. For Oprah, one of the ways to measure how successful she's been in this transition is just does she stay part of the cultural dialogue?
Priester thinks Oprah's fans will pay to keep up with her wherever she goes. Just look, he says, at the three million people who pay to subscribe to her magazine.
Nelson Gayton: I think when you have a brand like Oprah, expectations are going to be great.
Nelson Gayton teaches media management at the University of California, Los Angeles.
Gayton: But nonetheless, they're expectations that need to be managed. Because one thing is running a great TV show and the other thing is running a network.
The network's co-producers at Discovery have already tempered expectations -- saying it may take time for OWN to find its voice. Gayton says Oprah will have to be aggressive to find shows that work.
Gayton: It's her name on this darn network and that does wonders to motivate people.
And if that doesn't work, there are always 5,000 hours of reruns from her daytime talk show.
I'm Jennifer Collins for Marketplace.