Oprah Winfrey and Discovery Communications CEO David Zaslav have run out of excuses: With their unofficial relaunch today of OWN, they’ll have no one to blame but themselves if their struggling joint venture fails to show a big improvement in the ratings following a dismal 3Q. In its targeted demo, women 25-54, OWN delivered a rating of .16 — down 16% vs. the same period last year when the channel was still Discovery Health. OWN may have set a deceptively low bar for itself; word is that it cut back on marketing in preparation for the relaunch. Still, the channel is betting everything on Oprah’s star power — and, to a lesser extent, Rosie O’Donnell’s — and that will be put to the test beginning today with the launch of The Rosie Show (7-8 PM) and Oprah’s Lifeclass (8-9 PM). Winfrey’s program, built on clips from her syndicated talk show, begins with one of her classics: for an episode about “ego,” she will include scenes from the show where she illustrated how much weight she lost from a liquid protein diet by wheeling in a wagon filled with 70 pounds of fat. Discovery will air both shows today on TLC, Investigation Discovery, Discovery Fit & Health and Planet Green as well as OWN. The joint venture also is spending more than $10M for marketing, not including free ad time on Discovery-owned networks. The cash is going for ads on hit shows such as The X Factor and Dancing With The Stars, as well as radio and billboards, and websites including Yahoo, Google, People.com, Technorati, and TVGuide.com.
The stakes are high. OWN’s more than four times more expensive to program than Discovery Health was, and that could result in a loss of $53.4M this year and $57.5M in 2012, research firm SNL Kagan estimates. But the channel is supposed to become profitable in 2013. That looked unlikely earlier this year as Winfrey and Zaslav acknowledged that OWN’s ratings had fallen short of expectations. That resulted in an organizational nightmare leading up to July, when Winfrey became OWN’s CEO, replacing Christina Norman, who was axed in May; and the interim CEO, Discovery COO Peter Liguori, who no longer has a day-to-day role at the channel. The company’s mantra is that OWN will turn around now that Oprah is devoting her full attention to it, and becoming a nightly fixture on it. Winfrey also brought in Harpo Studios presidents Erik Logan and Sheri Salata. They’re trying to keep expectations modest: “Everybody knows that this is a long, long journey,” Logan says.