Oprah Winfrey may want to consider giving away a few more free cars to help her struggling cable network.
The car giveaway episode aired in 2004, when she was at the height of her TV career hosting “The Oprah Winfrey Show,” seemed to be what everyone was talking about back then. Even Oprah said the event was “one of my all-time favorite happiest moments ever” as she put it recently on the Oprah Winfrey Network, or OWN.
Alas, it's unhappy times for Winfrey's OWN right now. In recent days the network announced it was pulling the plug on “The Rosie Show” and embarking on a major restructuring, including laying off 30 employees of its 150-person staff.
“It is difficult to make tough business decisions that affect people’s lives,” said Winfrey, CEO and chief creative officer of the network, in a statement, “but the economics of a start-up cable network just don’t work with the cost structure that was in place.”
It’s a difficult and surprising setback for the former queen of daytime talk shows who for so long seemed to have the Midas touch whether it came to TV ratings or endorsing products.
She left all that behind and embarked on creating her own network, launching it on Jan. 1, 2011. OWN is a joint venture between her Harpo Inc. and Discovery Communications, and replaced the Discovery Health Channel.
OWN is struggling for a number of reasons, said Jeffrey McCall, professor of media studies at DePauw University. "Oprah is not present in most of the programming," he noted. "Oprah's followers like her -- not necessarily her stand-ins and friends."
"Ultimately it is quite different delivering a magic touch to a one-hour daily gabfest and trying to spring that same magic on a round-the-clock channel in which the only distinguishing characteristic is that Oprah runs it," he said. "Oprah's fans just aren't going to watch a channel because Oprah was the business entrepreneur behind it."
OWN executives realize more Winfrey screen time and connections with her fans are critical to the future success of the network. Her "Next Chapter" show on Sunday nights is a big viewership driver, and on Monday the network is bringing back her "Lifeclass" series, in which she talks about life lessons on everything from joy to the false power of ego.
OWN President Erik Larson acknowledged that Oprah’s appearances are “a halo effect for what’s happening for the rest or our network.” But, he told msnbc.com, “in order to have a network you don’t need her to be in every single show.”
While OWN's restructuring, announced Monday, has many wondering whether the network's days are numbered, Larson said the changes represent the second phase of a process to build a stronger OWN. The first step was focusing on improving ratings, which are now growing by more than 10 percent monthly, driven in large part by Winfrey interviews with celebrities such as Lady Gaga, he said. And now management is turning to the financials, he said, by “right-sizing our business.”
With some of the changes, it appears Discovery will take a more hands-on approach.
Veteran Discovery executive Neal Kirsch will be taking over as chief operating officer and chief financial officer of OWN. Lee Bartlett, executive vice president for global production management, business and legal affairs at Discovery will now help oversee a similar department at OWN. Ian Parmiter, senior vice president of marketing at Discovery ad sales, will take over marketing for OWN.
“As CEO, I have a responsibility to chart the course for long-term success for the network,” Winfrey said. “To wholly achieve that long-term success, this was a necessary next step.”
Another necessary step was canceling Rosie O’Donnell’s show, which was plagued by low ratings. According to TVGuide.com, the show’s debut ratings averaged 497,000 viewers in October, but that had dropped to 204,000 by last month. O’Donnell taped her final show Tuesday.
Winfrey thanked O’Donnell in a statement about the axing, but added, “As I have learned in the last 15 months, a new network launch is always a challenge, and ratings grow over time as you continue to gather an audience.”
A Wall Street Journal article Tuesday said Discovery had put $312 million into OWN’s operations as of the end of last year, up $254 million from Sept. 30. According to a Forbes article from last year, Discovery had initially agreed to pump $200 million into the network.
The transition from daytime TV host to cable has been rough for Winfrey’s brand.
“While headlining her own syndicated ‘The Oprah Winfrey Show,’ Oprah was unstoppable,” said Don Seaman, marketing manager for TVB, a trade association for the commercial broadcast industry. “But since last January she’s on cable, on her OWN. The Oprah Winfrey Network, that is. And she’s hardly been heard from since.”