Oprah's New Network Set To Make Debut In 85 Million Homes Saturday
29 Dezembro 2010 - 7:42PM
Dow Jones News
If you get the Discovery Health Channel, chances are you'll be
able to watch Oprah Winfrey welcome you to her new network when it
launches Saturday.
With the addition this week of Cablevision Systems Corp. (CVC),
about 85 million homes will be able to see the daytime television
queen's new network. Roughly 80 million homes currently carry
Discovery Health, which is ending and being rebranded as the Oprah
Winfrey Network, or OWN. In comparison, there are about 115.9
million television households, according to Nielsen Co., and the
largest networks, like the signature Discovery Channel, reach
upwards of 100 million and niche players, like children's network
Sprout, reach fewer than 50 million homes.
The tricky part, especially if the new network proves popular,
will be when cable or satellite companies' existing contracts with
Discovery Communications Inc. (DISCA, DISCK) expire. Discovery and
Winfrey's Harpo Inc. production company each own half of the new
network, and the goal is to secure significantly higher monthly
fees and advertising revenue than Discovery Health currently
receives.
Discovery is looking to kick-start a seldom-watched channel, and
Winfrey wants to move to the next phase of her illustrious career.
Discovery Health notches an average of just 252,000 prime-time
viewers on a given night, according to Nielsen, while Oprah
Winfrey's syndicated afternoon show is averaging 6.7 million
viewers in this, its final, season.
Discovery Health charges television providers an average of 7
cents per subscriber, per month, according to data from SNL Kagan,
and will bring in about $80.1 million in net operating revenue this
year, with cash flow of around $30.3 million.
Some cable providers, like Time Warner Cable Inc. (TWC) and
Mediacom Communications Corp. (MCCC), will transition to OWN from
Discovery Health without needing to draw up a new contract until
the current contract to receive their packages of Discovery
channels is finished. At that point, these providers will negotiate
with Discovery for its channels separately from negotiations with a
new entity responsible solely for OWN.
Spokesmen for Cox Enterprises Inc.'s Cox Communications, Charter
Communications Inc. (CHTR) and Insight Communications Co. (ICCI)
also said they will broadcast OWN starting with its launch.
Others like satellite-television provider Dish Network Corp.
(DISH) already have Discovery Health but still need to hammer out a
new deal for OWN. Marc Lumpkin, a Dish spokesman, said it expects
to launch OWN when it begins transmission on New Year's Day, but
that Dish is "still finalizing contract terms at this time."
Satellite provider DirecTV Group Inc. (DTV) and cable behemoth
Comcast Corp. (CMCSK, CMCSA) didn't return phone calls, nor did
some small, regional service providers.
Cablevision, which didn't carry the Discovery Health network,
announced Tuesday it would carry OWN but didn't reveal the terms.
The cable company recently acquired Bresnan Communications, which
serves around 320,000 customers in four western U.S. states and
already had Discovery Health available to its subscribers.
Nicole Nichols, a spokeswoman for OWN, said it expects all of
the roughly 80 million television households that currently have
access to Discovery Health will be able to watch OWN. When coupled
with the addition of Cablevision subscribers, that number jumps to
85 million households.
A spokeswoman for Discovery didn't respond to a request for
comment.
When it comes time to negotiate new contracts to carry OWN, how
much the network commands and how much the cable companies are
willing to pay will depend upon the fledgling network's
success.
OWN is planning at least 22 original series next year, with
programs ranging from prime-time talk specials, such as "Ask
Oprah's All Stars," which first airs Sunday, to series following
celebrities, including mother-daughter country duo Naomi and
Wynonna Judd.
-By Maxwell Murphy, Dow Jones Newswires; 212-416-2171;
maxwell.murphy@dowjones.com
--Sam Schechner contributed to this article.
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