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November 24, 2009

Oprah and the TV Dinosaur

The marriage between Oprah and national broadcast television was made in show business heaven, but after 25 years she's going to abandon the aging broadcast TV dinosaur, which will help push it into extinction.

TV made Oprah the most famous, most influential, most beloved, most generous, richest (about $2.3 billion) self-made woman in the world. However, last week she announced that she will stop airing her syndicated broadcast television daytime talk show in September 2011, by which time she will move her programming to her own cable network, appropriately named OWN (the Oprah Winfrey Network) – no one as ever said she’s not clever.

Here’s what Advertising Age had to say about Oprah’s move:

Oprah Winfrey's decision to end her long-running syndicated program is a bet on the future of TV -- that niche cable channels, with their dual revenue streams from advertising and subscriptions, will be a more stable media base, and that technology will allow any content provider to reach its core audience in a more direct fashion without having to be seen at a certain time of day and on a certain channel.

Not only will she boost cable’s ratings, but she will undoubtedly hurt broadcast television’s ratings, especially Diane Sawyer’s, who will by then be the anchor for ABC’s “World News,” (which has benefitted for 23 years from Oprah lead-ins) as pointed out by Brian Stelter in his thorough article in the New York Times.

This article, by the way, is just one more that reaffirms that Stelter is currently the most intelligent and knowledgeable writer about the television industry.

In two years, when Oprah leaves broadcast TV for cable, will television stations or even cable systems still be viable delivery systems? This Christmas several TV set manufacturers will be selling HDTV sets that connect directly to the internet (WiFi).

In a couple of years, will content providers such as Oprah have figured out how to charge for programming on the internet? Will Google’s YouTube have expanded its deal with CBS and be able to charge consumers directly for CBS programming? Will HULU.com, which this October had a huge surge in traffic because of ABC-TV programming, be a highly profitable delivery method? Will ESPN have made a deal with YouTube to change consumers $24.95 a month for all ESPN programming, including Web site content, streaming mobile content, podcasts, and streaming audio?

If so, will the broadcast TV dinosaur still be alive when Oprah abandons it?

Posted by Charles Warner at November 24, 2009 3:21 PM

Comments

Bruce Braun [TypeKey Profile Page] at November 24, 2009 5:48 PM writes:

Let's not forget that Oprah syndicates her show thru CBS, which bought the original syndicator, KingWorld a number of years back.

Oprah had to pay syndication fees that were probably around 20-25%. Dumping CBS in the process will also save her a HUGE amount of distribution fees.

The challenge Ms. Winfrey has will be to generate the levels of cash, minus the distribution fees with her new network that her syndicated show has brought in by the carload.

Let's not forget that Oprah was a partner and contributor to the female targeted Oxygen cable network. Oprah was the "tent pole" star that was supposed to draw female viewers into the Oxygen viewing tent. It never happened, despite her star power and a big promotional spend. in In short, a big dud!

While the channel slot Discovery is providing her with gives her immediate distribution(they will take their cut for distribution as well) and cable channel shelf space, the question is what sort of channel placement will she have? Nothing like an ESPN, CNN or USA, for sure.

Channel placement is crucial because the lower the channel number/tier, the higher the channels index for viewership. So, if Oprah moves from ABC affiliates on Channel 7, for example to Channel 224, her viewership will be significantly less and thus much less ad revenue is possible.

It is one thing to produce five hours of shows per week and quite another to fill up 24/7/365. To my thinking, that will be the real challenge for Team Oprah.

At the time Oxygen launched, the main competitor was Lifetime. Now with Lifetime, LFT Movie Network, We, Style, Bravo, Soap Net, Hallmark, Wedding Central, QVC, HSN, Food Network and an incredible number of female targeted websites, it really is a different world for Oprah to compete in.


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