KEY POINTS:
NEW YORK - Talk show queen Oprah Winfrey will create a cable network with Discovery Communications and said she would soon consider the future of the top-rated weekday television show that has made her a household name.
Winfrey's exclusive distribution contract for The Oprah Winfrey Show is due to expire in May 2011, but an option to end the show as early as 2010 means its fate will likely be the subject of discussion this fall, she said on Tuesday.
"One day the show has to end," Oprah said on a conference call to announce the Discovery deal. "That may be in 2011 and it may be after 2011."
The Discovery deal represents a major expansion of Winfrey's media reach, which also includes feature films, O, The Oprah Magazine, a satellite radio program and a website.
"OWN: The Oprah Winfrey Network" will be owned jointly by Winfrey's Harpo Productions and Discovery and dedicated to inspiring viewers to "live their best lives," the two companies said.
It will debut in 2009 in more than 70 million US homes, appearing on what is now the Discovery Health Channel.
"Fifteen years ago, I wrote in my journal that one day I would create a television network, as I always felt my show was just the beginning of what the future could hold," Winfrey said.
Winfrey will serve as OWN's chairman and have full editorial control over its programming and branding. Harpo will produce shows for the network and other outlets as well.
For Discovery, the deal is the latest effort to build up the brand names of its channels, in some cases by converting them into completely new ventures, ahead of its owners' plans to take the company public in the second quarter of this year.
Discovery Communications is owned by Discovery Holding Co and Advance/Newhouse Programming.
"Discovery Health was beachfront real estate. (But) it didn't have a voice and a connection with viewers that was commensurate with the platform," Discovery Chief Executive David Zaslav told Reuters in an interview.
"There's no stronger brand in media than the Oprah brand. Our focus isn't going to be just women. This channel is really about connecting with people."
No Oxygen
Winfrey was a co-founder of Oxygen Media, the cable channel catering to women that was bought by NBC Universal late last year for US$925 million. But she described her role in that venture as nearly hands-off compared with OWN.
"I was an investor in Oxygen and I would have to say the channel did not reflect my voice," she said. "Here I have editorial control and there is a vision of what we want to accomplish for this network."
Media experts said they expected the network to appeal to advertisers with Winfrey's proven ratings clout.
"She's really written the text book on how to brand yourself," said Brad Adgate, director of research at media buyer Horizon Media. "I'm surprised it's taken a cable network this long to reach out to her."
Winfrey and Discovery described the deal as cashless, but did not disclose other financial details. OWN will also seek a chief executive to oversee daily operations.
Oprah.com will become part of the new network, which will operate as an independent company. Discovery will handle distribution and operational needs for the new network, while both partners will work on advertising sales.
Discovery is also launching Planet Green, a 24-hour network devoted to ecology friendly lifestyles, in the second half of 2008. Discovery Holding Class A shares fell 30 cents to $24.40 in afternoon trading.
- REUTERS
