Discovery buys majority stake in OWN from Oprah Winfrey, extending her exclusivity commitment to 2025

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December 5th 2017

A significant move you should be aware of that was announced today.

Discovery Communications has increased its ownership stake in the OWN: Oprah Winfrey Network TV joint venture, in an agreement with Oprah Winfrey’s Harpo, Inc.

Under the terms of the new deal, Discovery paid $70 million to acquire an additional 24.5% stake in OWN from Harpo, Inc., increasing Discovery’s ownership of the black TV network to 74.5%, which means that Discovery is now majority owner of OWN, with Winfrey’s Harpo retaining a minority interest of 25.5%. Previously Discovery and Harpo co-owned the OWN network with a 50/50 percentage split between the two.

In addition, Ms. Winfrey will continue in her role as CEO of OWN, with her exclusivity commitment to the network extended through 2025.

“Creating OWN and seeing it flourish, supported by Discovery and a rapidly growing group of the finest storytellers in film and television, is one of my proudest achievements,” said Winfrey. “I’m thrilled with the network’s success and excited about this next chapter in our partnership. Together, we’ll continue to inspire our viewers with real-life stories that are emotional and entertaining, connecting them to each other and to their greatest potential.”

“Ten years ago, Oprah and I began to imagine what a network, inspired by her vision and values, could mean to viewers across the U.S.,” said David Zaslav, President and CEO of Discovery. “In an increasingly crowded landscape, OWN has emerged as the leading destination for African American women and one of the strongest superfan brands across all screens and services. This transaction allows Discovery and Oprah to unlock more value from our partnership; extends once more her commitment to the network; and lets us continue our strong work together to nourish OWN viewers with the content they love.”

Launched in 2011, despite some early struggles, OWN has become the #1 network for African American women with the top four original scripted series on ad-supported cable. The network is led by hit series including Queen Sugar and Greenleaf, the top two original series on all of television Wednesday nights for African American viewers. The network also boasts strong social media engagement, delivering the most social shows on ad-supported cable with three shows in the Top 10. The network has recently expanded its relationships with top content producers of African descent, including Ava DuVernay, Mara Brock Akil and Salim Akil, Academy Award-winning Moonlight writer/producer Tarell Alvin McCraney, and the prolific producer Will Packer.

Worth noting that Discovery is in the process of acquiring Scripps Network Interactive, which owns such female-skewing channels as HGTV and Food Network. This majority takeover of OWN, in addition to the company’s acquisition of Scripps and its current female-focused networks, will make Discovery home to five of the top pay-TV networks for women, representing 20% share of women watching primetime pay-TV in the U.S.

So what might all this mean for OWN? Not much really. It should continue with business as usual, and Ms. Winfrey may just be cashing in while possibly thinking about her longer term involvement in the running of the network. She likely has other interests to pursue. Recall she joined CBS' 60 Minutes team this year. I wouldn't at all be surprised if she eventually sells more of Harpo's stake in the company to Discovery, taking a significantly lesser role in its operations.

Clearly this is not the OWN that was once practically left for dead a short 5 years ago, a year after it launched and struggled through an early identity crisis. Specifically, recall the story in the fall of 2012 that said, thanks to the surprising success of Welcome To Sweetie Pie's, executives at OWN believed they could turn around the then fledgling cable channel by setting their sights on a new target demo: African Americans; i.e. you. At the time of that revelation, I teased that OWN would eventually become a black TV network. It's not so funny now, when you look at the network's current, and upcoming lineup of shows (although the network is ending its relationship with Tyler Perry, who, at one time, was responsible for all of its original scripted series).

So it wasn't much of a surprise at the time that the network decided to nurture that audience (black people), expanding their options with scripted and unscripted programming.

As I'm sure Winfrey has learned firsthand and can speak to directly, launching a new network is no small, simple feat. It's easier when you're managing a single show among many other varied shows on a network (as was the case with The Oprah Winfrey Show, which was an hour of TV, daily, from Monday to Friday on a network she didn't run). It's a completely different, and much larger animal to tame, when one is having to manage (with a team of course) 24 hours of programming on a single TV network that one owns.

You might remember that Tyler Perry initially had plans to launch his own cable TV network (which is all-but-forgotten now). The plan (which involved Lionsgate and One Equity Partners, co-owners of the TV Guide Channel) was to overhaul the TV Guide Channel and turn it into Tyler TV (that was the name being considered for the new network).

Tyler TV is long dead, thanks to Perry's exclusive partnership with OWN, which is now ending. Although he's taking his content over to an OWN competitor in BET Networks. One has to wonder whether Mr. Perry himself may revisit Tyler TV, quite possibly as a standalone streaming app.

Five years later, a retooled lineup, growing brand awareness and stickiness, ongoing expansion, double-digit annual ratings growth and more positives for a very young TV network with so much life still ahead of it, what might OWN look like in another 10 to 20 years? That may be the most exciting part of this ongoing narrative - that which we don't yet know.

by Tambay Obenson on December 5th 2017
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