Analysts at SNL Kagan suggest that losses at the Oprah Winfrey/Discovery-backed OWN channel could reach $142.9 million this year. SNL Kagan number cruncher Derek Baine says the problems are many: the current bad press could make advertisers twitchy about committing their cash to the channel. Also any prospects of OWN gaining – a normal – 20-25 cents per/month, per subscriber, “may now be unrealistic,” he says.
Baine, in a controversial report that has been dismissed by Discovery as “inaccurate” adds that the moving of some functions either to Discovery’s Silver Spring HQ or to Harpo’s Chicago facilities will save some cash, there could inevitably be some significant fiscal write-offs this current quarter, with the cash bill falling at Harpo Productions’ door.
However, he also stresses that there remains potential for upside movement: “The story at OWN is far from over. Ratings for OWN in January were up 10 per cent to a 0.13, after Oprah’s new show, Oprah’s Next Chapter, aired, but it’s still a miniscule rating compared to the programming investment.”
Discovery’s spokesman David Leavy, in his response to the Kagan report, said: “The venture is on more solid ground with more business momentum than ever before.” He added that OWN’s Oprah Winfrey’s show of March 18th made OWN the number one cable network for women and people at 10pm. “We remain confident in the future of OWN and the long term value we are building.”
It is also fair to say that Discovery knows the cable TV industry like few others. While it will be keen to stem losses, it tends to take the longer view with its channels, and not look to instant network-type fixes. It also has more than a little clout as far as carriage negotiating is concerned with MSOs.