Oprah's next mission: Win advertisers with OWN vision

LOS ANGELES Thu Apr 5, 2012 10:01am EDT

Oprah Winfrey, Chairman, CEO, and Chief Creative Officer of OWN: Oprah Winfrey Network, speaks during the OWN session at the 2011 Summer Television Critics Association Cable Press Tour in Beverly Hills, California July 29, 2011. REUTERS/Mario Anzuoni

Oprah Winfrey, Chairman, CEO, and Chief Creative Officer of OWN: Oprah Winfrey Network, speaks during the OWN session at the 2011 Summer Television Critics Association Cable Press Tour in Beverly Hills, California July 29, 2011.

Credit: Reuters/Mario Anzuoni

LOS ANGELES (Reuters) - Oprah Winfrey appears in New York on Thursday before her most important audience: potential advertisers who will decide how many more seasons her struggling cable network has to promote her mantra to "live your best life."

The "queen of talk," having admitted in a CBS interview this week to "101 mistakes" in launching the Oprah Winfrey Network last year, must convince the media buyers who will crowd Lincoln Center that her formula of uplifting programs will attract more viewers than it did in its first year.

So far, her mix of interviews and feel-good programs has left the key audience of 25- to 54-year-old women less than thrilled. Ratings among them for the 15-month-old OWN are about what they were for the Discovery Health channel it replaced.

Last month, OWN, a joint venture with Discovery Communications, laid off 30 staff and canceled its heavily hyped Rosie O'Donnell talk show that it had hoped would provide a ratings boost.

OWN's stumbles have struck the network to its operational core. The aspirational message that fueled Winfrey's hugely successful syndicated daytime talk show for 25 years is not translating to a mass audience for the 24-hour cable channel.

"On cable, the networks that work are far from aspirational," Brad Adgate, an analyst at advertising agency Horizon Media said, pointing to shows such as "Keeping Up With the Kardashians" or the "Real Housewives" series.

"It has been difficult for aspirational shows (and) networks to get on track," he said.

OWN did see a recent ratings boost as Winfrey added more air time. At the end of March, the network reported a 21 percent ratings increase for the first quarter compared with last year, with an average of 180,000 daily viewers.

The network's most-watched recent programs were Winfrey's interviews with Whitney Houston's family, Lady Gaga, rocker Steven Tyler and mega-church pastor Joel Osteen.

But few of OWN's other programs have built audiences. Over the past year, the network averaged 50,000 viewers among women ages 25 to 54, slightly less than the 51,000 Discovery Health averaged in its last year, according to Nielsen data provided by Horizon Media.

Those numbers were less than the 98,000 women ages 25 to 54 who watched the male-skewing Spike TV, or the 69,000 who watched the Travel Channel during the same time period.

"This is a network that has some good momentum behind it," OWN President Erik Logan said, previewing his pitch to ad buyers. The channel will stick with the uplifting menu, he said, and will offer up Winfrey's recent interviews plus Saturday night programming such as "Welcome to Sweetie Pie's" as shows that reflect her philosophy.

"As with any cable start-up, it is going to take time" to build audiences, Logan said.

Winfrey has said launching the network too early was one of her "101 mistakes." She committed to working hard to fix the network [ID:nL3E8F28CW].

SUBSCRIBER FEES

In addition to its advertising revenue, OWN will collect subscriber fees from cable and satellite distributors of about 20 cents per subscriber per month, starting next year.

The company also just renewed a distribution agreement with Comcast Corp, which will add OWN to 3 million more homes. Overall, the network will be available in 83 million homes nationwide, the same as competitor Bravo.

"We are trying to find the right combination of content and intention and entertainment, and strike the right balance," Logan said.

Some industry experts believe Oprah Winfrey's network will come out of its ratings doldrums. "There is a trial and error in cable programming," said Jeff Gaspin, former chairman of NBC Universal Television Entertainment and cable industry veteran. "OWN went through theirs while everyone was watching."

Oprah will have competition in the aspirational field.

Basketball great Earvin "Magic" Johnson, for one, plans a network called Aspire aimed at delivering "enlightening, entertaining and positive programming to African-American families." The channel, which launches at the end of June, is a partnership between Comcast and GMC, the former Gospel Music Channel.

"Oprah is a great inspiration but her mistake was naming it the Oprah Winfrey Network," said Brad Siegel, vice chairman of the GMC and Aspire channels. "People were expecting more of Oprah than they got."

Johnson did not want his name on his channel, Siegel said, and instead will put the spotlight on promising African-American artists, writers and musicians with a series of video vignettes.

The harsh reality of TV life is that time may be running short for Oprah to use OWN as the platform from which she trumpets her message. Although Discovery says it has no intention of killing the channel, not everyone thinks OWN will reverse its decline.

"I'm not sure the channel makes it unless it expands its base beyond the aspirational, Oprah-type brand," said Robert Thompson, a professor of TV and popular culture at Syracuse University.

"They need to find their 'Jersey Shore,' the show that will make people come to watch them," he said. "When MTV started doing 'Road Rules,' people at first said, 'where are the music videos?' Now, they have very successfully rebranded themselves."

For now, advertisers are sticking with the doyenne of talk. Early sponsors have reaffirmed their commitment to the network, OWN's Logan said, and General Motors said the company planned to continue advertising on the channel.

"It will take a little more time to achieve the expectations that she initially set," said Andy Donchin, director of national broadcasting for ad-buying agency Carat North America, which has bought time on OWN for its clients. "It's hard to bet against her because almost everything she touched turned to gold."

(Reporting By Lisa Richwine and Ronald Grover; Edited by Peter Lauria and Maureen Bavdek)

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