January 27, 2023

OWN, Winfrey’s Cable Channel, Turns Around Financially

After several grueling years, Oprah Winfrey’s cable channel OWN has turned the corner toward profitability, her business partners at Discovery Communications said on Tuesday, six months ahead of a previously stated goal.

In the second quarter, OWN was cash-flow positive for the first time, said David M. Zaslav, Discovery’s chief executive. He credited investments in programming, including two new shows from Tyler Perry, and increases in subscriber fees from cable and satellite providers.

OWN, which is a joint venture between Ms. Winfrey and Discovery, is now “starting to pay down the investment Discovery has made in the venture,” Mr. Zaslav said.

When the channel was announced in mid-2008, Discovery said it would provide the cable shelf space for Ms. Winfrey (by converting the Discovery Health Channel into OWN) and $300 million in loans.

Amid the hoopla that accompanied its debut on the first day of 2011, Discovery briefly predicted that the channel would make a profit in its first year. But the ratings soon sagged, resulting in lower-than-expected advertising revenue and no small amount of soul-searching by Ms. Winfrey and Mr. Zaslav. Discovery repeatedly chipped in more money; its loans now total $510 million.

Throughout 2012, industry analysts described OWN as a flop or an outright failure. Some predicted that Discovery would have to write off some of its investment.

But a series of changes that year, including the layoffs of some staff members and the scrapping of an expensive talk show by Rosie O’Donnell, helped lay the groundwork for a turnaround. Shortly after those steps were taken, Mr. Zaslav started predicting that OWN would break even sometime in the second half of 2013.

On Tuesday, he noted that the channel’s breakthrough was “ahead of the originally anticipated second half of the year goal of cash flow break even.”

“I want to congratulate Oprah and the entire team at OWN for this significant milestone,” Mr. Zaslav said. “We remain very bullish on its long term trajectory and our ability to drive continued asset appreciation in the future.”

The addition of Mr. Perry’s sitcoms was particularly important. Mr. Perry agreed last fall to direct all his future television production to OWN, in exchange for a small equity stake in the channel and other undisclosed payments.

His first two shows, “The Have and Have Nots” and “Love Thy Neighbor,” had their debuts in the second quarter. Mr. Zaslav called them “bona fide hits” and said that they, along with new seasons of existing shows, had helped improve ad revenue at OWN.

As always in cable, subscriber fees were also crucial. In January — shortly before Ms. Winfrey’s biggest interview in several years, that of Lance Armstrong, who confessed to use of performance-enhancing drugs — OWN started receiving higher per-subscriber fees, 20 cents a month in some cases, thanks to long-term contracts with cable and satellite providers.

A Discovery spokesman declined to say how much OWN earned in the second quarter, making it difficult to predict how long it might take the venture to repay its loans. But one person with direct knowledge of the business, who insisted on anonymity to share closely held financial information, projected that OWN would come out “tens of millions of dollars” ahead for the full year. The person acknowledged that it would take “a few years” for Discovery’s full investment to be recouped, and noted that it was earning interest in the meantime.

The positive earnings announcement for OWN came amid a somewhat disappointing quarter for Discovery over all. While its earnings — $300 million in the quarter, 82 cents a share — were up 2.4 percent from the period a year earlier, analysts were expecting profit of $328 million and 90 cents a share on average. The company also trimmed its full-year outlook.

Article source: http://www.nytimes.com/2013/07/31/business/media/own-winfreys-network-turns-around-financially.html?partner=rss&emc=rss

A New Site Intended to Serve People in Recovery

Now, Maer Roshan, the founder of Radar magazine, is betting that addiction is also a good and potentially profitable proposition for the Web.

TheFix.com, a Web site that combines feature writing, news, video and Zagat-like reviews of rehab facilities, will go live on Monday. It is the latest endeavor for Mr. Roshan, who became a fixture in New York media as an editor for Talk and New York Magazine, but then fell out of the public eye after Radar folded as a magazine for the third time.

By his own account, it was a rough exit from public life. Radar’s Web site was sold to American Media Inc., leaving Mr. Roshan with no role. He moved to Los Angeles and spent some time in recovery for alcohol abuse, where he came to realize that the vast community of people trying to overcome their addictions had no media outlet that spoke directly to them.

“These are people who are united by their values, united by their mission; there’s a common lingo, common literature,” Mr. Roshan said in a recent interview at a cafe down the block from the sober living facility in the Williamsburg section of Brooklyn called The Core Company where TheFix.com has its offices for the moment. “There’s an actual community here.”

By the estimation of Mr. Roshan and his business partners, it is a community that advertisers will discover is large and eager to spend: “The demographics are really good,” he said. Back-of-the-envelope math suggests that a Web site catering to people in recovery could be a huge business. Various surveys put the number of people who enter treatment each year from two million to four million. At costs that easily run tens of thousands of dollars a month, often paid out of pocket, the money spent getting sober is staggering.

Allison Floam, a co-founder of TheFix.com, said, “This is the largest market you’ve never heard of.”

As a niche publishing enterprise, TheFix.com (tagline: “Addiction and recovery, straight up”) is not unlike any media that play to a specific demographic with hopes of drawing in the kind of specific, highly engaged audience that advertisers desire. The Fix sees tremendous potential in the buying power of people in recovery.

“They’re people who have lots of new disposable income because they’re not spending it on crack or Absolut,” Mr. Roshan said. “They are people who are newly invested in their health and well-being. They are people who have a lot of time on their hands that they didn’t have before.”

The Fix plans to reach out to health clubs like Equinox and Crunch; beverage sellers like Poland Spring and Vitaminwater. Coffee makers like Starbucks are on their list too because recovering addicts often develop a taste for coffee. The site’s founders are also eager to attract travel advertising.

There is little doubt that recovering addicts are a large audience. But whether advertisers have any desire to cater to them as a distinct group is uncertain.

“That’s the question: Is putting your brand in the environment of that condition and mind-set going to create an association that you want, and one that’s scalable enough that there’s a business reason to do it?” said Andy Chapman, director of digital trading for Mindshare, a media-buying agency. “Because you can reach them in other places. And that may be good enough.”

The creators of The Fix are trying to soothe advertisers in part by not presenting addiction as an exploitative spectacle. But The Fix does not intend to ignore stories of Hollywood celebrities who have often explosive spirals into substance abuse. Nor does it intend to treat addiction as purely serious fare. In fact, one of its first features is a gallery of what its editors have deemed history’s messiest celebrity breakdowns.

“We’re certainly not looking for any kind of Victorian freak show element,” said Joe Schrank, a co-founder of TheFix.com who worked with Mr. Roshan to develop the idea for the site, and founder of The Core Company. “However, I think you have to have a sense of humor about it. It’s a very delicate line.”

The Fix will publish serious essays by big names like Susan Cheever. There is an article questioning the effectiveness of a new vaccine that purports to curb cocaine cravings. Experts have recorded videos that offer advice on managing addictions.

“My hope for The Fix is that it’s giving much more texture to the comprehensive life — not just the crisis that thrusts people into treatment,” Mr. Schrank said. “The story arc in the media is always the same. It’s Charlie Sheen freak show, or a guy went to rehab, redeemed himself and became a rehab counselor. When the truth is it’s as individual as a human thumbprint.”

Article source: http://feeds.nytimes.com/click.phdo?i=41323a56f0789d617561b77526ada945