Last Tuesday afternoon, Oprah Winfrey called the co-presidents of her cable channel OWN with some jump-on-the-couch-with-joy news. “Lance wants to talk,” she said, referring to Lance Armstrong, whom she had been courting for a confessional interview about his long-denied use of performance-enhancing drugs.
Ms. Winfrey conferred with the co-presidents, Erik Logan and Sheri Salata, about booking a trip to Mr. Armstrong’s hometown, Austin, Tex., reserving airtime for Thursday night and announcing the “get” to the press.
What no one said on the call was that this interview — maybe Ms. Winfrey’s biggest since her 1993 sit-down with Michael Jackson — could be a turning point for OWN, which has been low-rated since its birth two years ago.
Another turning point — perhaps even bigger — came this month when OWN started to pocket substantial per-subscriber fees from some of the biggest cable and satellite operators in the country.
Some of these deals were made before OWN even had its premiere. The operators agreed to pay just a penny or two per subscriber a month until January 2013, and then start paying nearly 20 cents a month on average, according to people with direct knowledge of the deals who asked for anonymity because the details were confidential. The fees increase over a span of several years.
Multiply those dimes and quarters across most of the 83 million homes in which OWN is available (but not all — at least one deal is still pending) and the value for Ms. Winfrey and Discovery Communications is plain. Discovery, OWN’s other owner, has said that the channel will turn a profit for the first time in the second half of 2013. Discovery has invested more than $400 million to date.
