Discovery is a well-run company, and its shares trade at $48, near a 52-week high. The entertainment company has a market cap of $18.7 billion, revenue of $4.2 billion and net income of $1.1 billion last year. OWN should not have much of an effect on those numbers. But no corporate management at a public company wants to be viewed as wasteful. The investment in OWN is just that.
Winfrey’s own show, called “Oprah’s Next Chapter,” drew its biggest audience, 3.5 million viewers, with a recent interview with Whitney Houston’s daughter. The show’s viewership has been as low as 500,000, though. It airs twice a week, but even if its ratings were unusually strong, that is not enough to carry an entire network.
One of the most promising signs for OWN is that it is available to 77 million households. As cable programmers have found in the past, the number of homes that can see a show means nothing. It is the number of people who tune in that matters.
OWN was set up to rely on programs beyond Winfrey’s. O’Donnell’s show was supposed to be one of the foundations of those plans. Now that it is gone, OWN will have to find a replacement. There are only so many celebrities that OWN and Discovery can call upon. How many first-tier entertainers want their reputations fouled by poor ratings and a cancellation?
OWN has run out of time. Discovery will soon run out of patience. It has a reputation as a smart entertainment company to defend. And OWN has caused that reputation to erode.
Douglas A. McIntyre
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