As Lance Armstrong’s personal brand and fortune hits the skids, Oprah Winfrey’s OWN and partner Discovery Communications are reaping the benefits.
The question is to what extent the interview with the disgraced cyclist will serve as a turning point for her eponymous network, which launched on Jan. 1, 2011.
Discovery has invested more than $400 million in OWN, and says the channel will turn a profit for the first time in the second half of 2013.
OWN is turning a corner on per-subscriber fees from some of the biggest U.S. cable and satellite operators, with a reach of 83 million homes and the contractual ability to boost those subscriber fees two years post-launch now kicking in.
So is OWN finally ready for prime time, and will the Armstrong exclusive enhance the network's performance?
Winfrey’s Q Score slipped from 31 in 2010 among adult women to 22 in 2012, but hopes are high that the Armstrong interview will finally put OWN where Discovery hoped it would be from the start. “They see a lot more to do, but they think they’re on the right track now,” Paul Maxwell of MediaBiz told The New York Times.
"OWN only truly works when she's on it. When Oprah does what she does. And on Thursday, she did Lance," The Hollywood Reporter's TV critic Tim Goodman commented.
Discovery — which has a history with Armstrong as a title sponsor of his cycling team, although OWN says the cyclist wasn't paid for the OWN TV special — is leveraging the "worldwide exclusive" interview with Armstong, which attracted 4.3 million viewers the first night, for all it's worth.
It raised advertising rates and has aired ads for other OWN programs — along with Internet and print ads — to ensure audience tune-in. Yet it failed to capitalize on the live-streaming video of the two-art special on Oprah.com and on OWN's Facebook page because it didn't have video ad insertion in place for the programming event. A huge missed opportunity, as part one of the two-night special attracted 600,000 online streams with viewers live streaming from 190 countries, also dominating social media throughout the programming event.
"Oprah and Lance Armstrong: The Worldwide Exclusive" reportedly charged about $100,000 for a two-spot ad buy, with advertisers "getting a spot in both nights of the special,” Ad Age reports. Ad Age estimated that's about 40% to 50% more than advertisers would have paid for that much time during other major interviews or specials on the network — a premium for OWN, but still less than top cable shows typically command.
The TV special will also be simulcast in over 100 countries across Western Europe, Latin America and Asia-Pacific on Discovery Channel, TLC, DMAX and Home&Health, with additional international markets airing both episodes over the weekend.
“We’ve always said to ourselves, ‘Slow and steady, slow and steady,’ ” OWN co-president Erik Logan told The Times. The Armstrong exclusive "showcases the No. 1 asset this network has over everybody else — and that's Oprah Winfrey."
OWN has steadily captured a significant share of African-American women put off by youth-centric programming on competitors like BET. OWN's audience is roughly one-third black.
The network recently inked a deal with Tyler Perry, the creative force behind "Madea's Family Reunion" and TBS’ "Tyler Perry's House of Payne.”
"Oprah's Next Chapter," the series that puts Oprah back in her daytime guise (which viewers love) as celeb interviewer and breezy chum to the famous, remains the key driver for ratings, although "Iyanla: Fix My Life" and "Welcome to Sweetie Pies" have held their own.
"The initial expectations for this network turned out to be unrealistic," said Brad Adgate, analyst for Horizon Media. "Oprah wasn't on camera. The shows weren't all that good. The network got raked over the coals. People thought the network would be doing a million viewers (on average) and it's doing a third of that."
The interview could boost OWN’s reach to 20 million subscribers, and possilbly, "they'll be calling their cable operators and saying, 'How come I'm not getting this?'" added Adgate.
Winfrey faulted OWN for “launching when we really weren’t ready to launch,” while she was still busy hosting her daytime talk show. But in October, she changed her tune on ABC’s "Good Morning America," commenting, “We have made the pivot.”
Now, arguably, OWN has turned that corner. The question is how Winfrey and Discovery leverage it going forward.