Oprah's Network Launch Advances Black Ownership

By Richard Prince,  Robert C. Maynard Institute for Journalism Education 

OAKLAND, CA - When a flick of the switch Saturday activated OWN, the Oprah Winfrey Network, making it available in 85 million homes, another marker was laid in the quest for media ownership by people of color.

The new lifestyle channel — called the most-watched experiment in the television industry — will be available in both standard and high-definition on what is now the Discovery Health channel.

Discovery will retain 50 percent ownership of OWN, while Winfrey's production company, Harpo, will control the other 50 percent, according to theStreet.com.

As the Project for Excellence in Journalism noted in its 2009 report, "the State of the Media," "black ownership of television still has some considerable distance to go.

"Advertising Age reported in April that out of 1,379 commercial TV stations, only eight stations are owned by African Americans. . . .

"One study, by Free Press, a non-profit that promotes diversity in media ownership, found that African Americans comprised 13% of the U.S. population but only owned 1.3% of its TV stations in 2006. Furthermore, the study found that there had been no improvement in the level of minority ownership in television since 1998."

The scarcity of black ownership on cable pushed activists to pressure Comcast to add more black-owned networks to its system as a price for supporting its pending acquisition of NBCU. They met with limited success.

"The top three owners of African-American-targeted cable channels are TV One and media behemoths Time Warner and Viacom, who both own three such channels [apiece]," Pharoh Martin of the National Newspaper Publishers Association wrote in May, quoting the Pew study.

Unlike BET, TV One or the defunct Black Family Channel, OWN is aiming for a general audience, very much like other Winfrey ventures.

"Not specifically religious, but vaguely spiritual and faith-filled, the new Oprah Winfrey Network is — like its namesake — all about uplift," Joanne Ostrow wrote Friday in the Denver Post.

"Uplifting advice, uplifting household tips, uplifting examples from celebrity lives. The new channel is a thematically unified effort at self-improvement, heaving us, hoisting us to a better place, 24/7 on cable television."

Like BET and TV One, however, Winfrey could not crack the world of cable television without an inside partner. In this case, he was David Zaslav, chief executive of Discovery Communications.

"OWN’s three-year gestation has been unusually arduous," Brian Stelter wrote in the New York Times on Dec. 18, reconstructing OWN's creation. "Early on, Ms. Winfrey’s partner in the joint venture, Discovery Communications, grew frustrated, and as boardroom tensions boiled over early last year she considered backing out altogether. The relationship has improved markedly since then. But as recently as late November, some producers working with OWN still doubted that the channel would actually come to life in January. . . ."

Stelter wrote that Zaslav, then Discovery's new chief executive, "surveyed the dozen channels that Discovery owned — he liked to call it beachfront real estate — for areas of growth" in the winter of 2007. "He concluded that the Discovery Health Channel should be first in line for remodeling. . . .

"Mr. Zaslav’s epiphany for an Oprah-branded channel came at his suburban New York home, while he was flipping through his wife’s copy of O: The Oprah Magazine, the hugely successful joint venture between Ms. Winfrey and Hearst. His wife, Pam, had a habit of attaching Post-it notes to its pages, which got Mr. Zaslav thinking about Ms. Winfrey’s enduring brand.

" 'Oprah and her magazine stand for this idea — a shared idea we all have — a shared hope we all have,' he says, 'of living your best life.' He could think of no equivalent on cable television. After barely three months on the job, he requested a meeting with Ms. Winfrey through her agents at the Creative Artists Agency.

"For the 50-50 joint venture with Ms. Winfrey, which was announced in January 2008, Discovery proffered its health channel and $100 million in start-up cash. Ms. Winfrey contributed her brand name, her 25-year library and her Web site, Oprah.com. . . ."

Negotiations and discussions of such cable-specific issues as carriage rates and subscription fees followed.

OWN's own "best life" includes profitability.

"David Miller of Caris & Co., an equity research firm, predicts that OWN will operate at a loss in 2011 and 2012, and will break even by mid-2013." Theresa McCabe wrote for theStreet.com. "He forecasts that the network will pull in $100 million from advertisements in 2011, but that it will spend $85 million on programming and another $40 million on marketing."

Stelter wrote, "Ms. Winfrey is taking an enormous risk by ending her 25-year-old broadcast talk show in 2011 and moving to cable, hoping that her viewers will move with her. Whether they watch or not, they’ll be paying for it: OWN is expected to eventually earn 25 cents a month in subscriber fees from each of the 85 million households it will serve."