Oprah’s new network searches for subscriber fees

By Dow Jones Newswires
Posted Dec. 7, 2010 at 10:48 a.m.

The Oprah Winfrey cable network, set to launch in a few weeks, is still trying to line-up subscriber fees from cable and satellite operators, David Zaslav, chief executive of the network’s part-owner Discovery Communications Inc., said Monday.

The new network — which is a 50-50 joint venture between Discovery and Winfrey, is set to replace Discovery Health network in about 80 million homes on Jan 1. Discovery Health, which is not widely watched, receives no per-household subscription fee in the “majority of cases,” said Zaslav during remarks at the UBS Global Media and Communications conference in Manhattan.

Zaslav has discussed the new network’s push for fees before, and the continuing talks illustrate a big hurdle it faces in establishing the two revenue streams that support the majority of established cable networks.

The network, which unveiled details about its programming in April, has drawn interest from advertisers. Consumer-products giant Procter & Gamble Co. committed more than $100 million over three years.

But television networks no longer believe they can thrive on advertising alone, with even major broadcast networks seeking subscription fees from cable and satellite operators. “We need the two revenue streams,” he said. “We have something that’s of significant value to the cable industry.”

Zaslav also spoke about the creative prospects for the network, which he said is focused on finding its voice.

“It’s hard to do. It’s not going to be the right voice on Day One,” he said. But he added there is significant opportunity to build a cable network around Winfrey’s brand of personal uplift.

Separately, Zaslav also said it is “hard to tell” whether U.S. consumers have begun to cut off their cable and satellite subscriptions to watch less expensive Web video. Television distributors and media companies are watching the trend, referred to as “cord-cutting,” closely.

Discovery has so far avoided putting many full episodes of its TV shows on the Web, in part because Zaslav said he has yet to see a robust business model there. “Right now the other models are inferior, so we’ve played on those platforms, but we haven’t played aggressively on long form,” he said.

Zaslav again endorsed cable and satellite services that aim to head off cord-cutting by offering Web video only to paying subscribers. But he said that cable networks should be paid extra for putting their shows on the Web, something distributors have resisted.

“If providing that content to distributors gives them a stickier platform,” he said, “that’s a goodie for them, and that means there should be some kind of economic goodie for us.”

 

Companies in this article

Comments are closed.