It was an uncharacteristically humble Oprah Winfrey who appeared on CBS This Morning in early April, looking tired, even a little frumpy, in a pearl-gray dress. Her pose was tense, her expression uneasy. While the 58-year-old has spent God knows how many hours on a TV talk show set over her long broadcasting career, she looked like a familiar species in the wrong habitat.
Luckily she was in friendly territory. Her BFF of more than 30 years, Gayle King, one of the show’s cohosts, was just an arm’s length away. And Winfrey needed a friend. Because after some brief banter, the other host, veteran newsman and interviewer Charlie Rose, quickly turned to a fresh and sore subject. “Let’s start talking about OWN,” he said.
Winfrey winced. “Oof,” she grunted. Then, just like that, the TV pro and Oscar-nominated actress—who, according to the celebrity writer Kitty Kelley’s 2010 tell-all biography, knew from a young age that she would be a great actor—flashed her winning smile and started the damage control.
As most Americans know by now, Winfrey’s bold new cable venture, the Oprah Winfrey Network, is in major trouble barely a year into its launch. Eviscerated by media critics and plagued by low ratings, it is burning through both money and people. OWN’s marquee daily talk show, hosted by Rosie O’Donnell and canceled in March after five months, is just the most visible wreckage. Derek Baine, a media analyst at SNL Kagan, says that the network—a partnership between Harpo (Winfrey’s production company) and Discovery Communications—is on track to lose $143 million this year after a $107 million loss in 2011. Discovery will likely have to write off a big chunk of its more than $300 million investment in the network, Baine predicts, and Harpo may bear some of the losses going forward.
During the CBS interview, Winfrey confessed that starting OWN while she was still finishing up her 25-year run of The Oprah Winfrey Show in Chicago was a bad move. “Had I known it was this difficult, I might have done something else,” she said. “If I were writing a book about it, I could call the book 101 Mistakes.” Pressed by Rose to name the top five mistakes OWN made, Winfrey listed just one: “Launching when we really weren’t ready to launch.”
That’s for sure, say media analysts and critics, who have dissected the network’s every decision (with more than a little schadenfreude, Winfrey has grumbled). Relying mostly on reality shows, reruns, prepackaged clips from old Oprah episodes, and familiar faces from that show—including King, who decamped for the CBS hosting gig in January—OWN’s programming has a slapped-together quality. By most accounts, Winfrey and Discovery’s most serious error was in underestimating the difficulty of creating an entirely new network around a single personality—the first time in television history that such a thing had been attempted.
Unhappy endings and the Queen of All Media don’t usually appear on the same program. Before now, Winfrey’s rise from a hard-knock childhood in segregated Kosciusko, Mississippi, to the pinnacle of wealth and power (her reported net worth: $2.7 billion) has made a rocket look slow. Now, for the first time, her reputation is in a swoon. Only 26 percent of women in her key 25-to-54 viewer group say they currently have a favorable impression of her, down from the low 30s last summer and from a career high of about 45 percent in the 1990s, according to research company Q Scores.
This year, for the first time since 1999, Winfrey was omitted from Time magazine’s list of the world’s 100 most influential people. And she is increasingly fodder for gossip and comedy. On a recent Saturday Night Live sketch that was posted online, Maya Rudolph played a self-absorbed Oprah bragging about OWN’s new programming: NCIS: Oprah, a show where she solves crimes at Harpo, and Hawaii Five-Oprah.
It’s hard to tell how Winfrey is handling all this. Despite having lived so much in the public eye—and having made her reputation as an Everywoman who chats with strangers on the Michigan Avenue bus—in the past decade or so she has become fiercely private. She has walled herself off from everyone but a few loyal friends and confidants, a potentially risky move for someone whose success depends on a keen feel for the pulse of the masses.
Nearly everybody around her, from current and former staffers to (reportedly) her dog walkers, is required to sign a confidentiality agreement, and she declined to speak to Chicago for this story. But interviews with colleagues, friends, and media experts suggest that Winfrey—who stepped in as OWN’s CEO last July amid a revolving door of top executives—takes OWN’s crisis personally. That she’ll do whatever it takes to turn the network around.
Can she pull it off? OWN copresident Sheri Salata, who has worked closely with Winfrey for almost 17 years, says she has never seen her boss so focused. “She is more centered now,” Salata says, “than the day of the [Oprah] finale.”
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Photography: (Winfrey) Krista Kennell/SIPA Press via AP; (King) John Amis/AP; (O’Donnell) Evan Agostini/AP; (McGraw) Charles Sykes/AP; Illustration: John Ueland
Winfrey with former OWN CEO Christina Norman and Discovery CEO David Zaslav at OWN’s 2011 launch
Johnny Carson signed off modestly. Walter Cronkite bade his viewers a dignified, brief goodbye. Nobody in the history of the small screen has exited with the fanfare of Oprah Winfrey. A two-day extravaganza at the United Center, part circus, part star-studded tribute show, wound up her 25-year TV run—her “amazing journey,” as she put it. A parade of celebrities, from Madonna and Beyoncé to Tom Hanks and Diane Sawyer, feted Winfrey as 10,000 loyal fans whooped it up. “I won’t say goodbye,” she told the audience—the whole world, for that matter—at the end of her 4,561st show, which aired May 25, 2011. “Until we meet again.”
In fact, this wasn’t really a goodbye for Winfrey at all. By the time she said those words, her Oprah Winfrey Network had been up and running for nearly five months. And, oddly for a venture that feels so thrown together, it had been more than three full years in the planning.
Back in 2007, David Zaslav, the CEO of Discovery Communications, based in Silver Spring, Maryland, had shown up at Harpo’s studios in the West Loop. Discovery owns not only the namesake cable channel but also TLC and Animal Planet, and Zaslav had an idea for yet another network. Brandishing a copy of Winfrey’s O: The Oprah Magazine, published by Hearst, he pitched the idea of creating a televised version—an entire channel built around her inspirational mantra: “Live your best life.”
Zaslav was offering Winfrey the chance to dig even deeper into the mission that had brought her unparalleled success: helping women overcome the problems of their lives—bad boyfriends, ungrateful children, career failures, runaway debt, addictions to booze, food, you name it—and achieve some kind of grace. The genius of Winfrey was that she, personally, had done just that. It seemed that there wasn’t any trauma (sexual abuse, teenage pregnancy, financial hardship, obesity) she hadn’t experienced and triumphed over. Audiences loved her for it.
How could she resist Zaslav’s offer? Discovery was willing to invest $100 million in OWN, he said, and he wasn’t asking her to kick in a cent. He just wanted her name, her brand, and her golden instincts for programming. The network’s ownership and profits would be split 50-50 between Harpo and Discovery. Winfrey, Zaslav explained, would be the creative force, with full editorial control, and would also serve as the network’s chairwoman. He didn’t even insist that she be on the air much: only 35 hours a year.
When the duo announced the venture in January 2008, though, they didn’t make a big deal of the fact that fresh content starring Winfrey would be minimal. The network was trumpeted as an outlet to spread her iconic brand even wider. “Now I can do it 24 hours a day on a platform that goes on forever,” Winfrey crowed to reporters.
The following year, Zaslav returned to Chicago with bad news. Recession-weary advertisers were skittish, he told Winfrey, and OWN would need more involvement from her if it were to go forward. Plus, he said, she would have to give up The Oprah Winfrey Show. “I wasn’t pleased; I wasn’t pleased at all,” she told Fortune in 2010.
Zaslav offered her the chance to bail. But she didn’t. She doubled her airtime commitment to OWN to 70 hours a year and agreed to host Oprah’s Next Chapter, a new series in which she would travel around the world to interview local people. As Winfrey explained to Fortune, her commitment was guided, in part, by providence. She said that in 1992, her longtime boyfriend, Stedman Graham, told her that an Oprah-inspired cable network was her calling.
Distracted by the demands of her daily show, Winfrey wasn’t deeply engaged during OWN’s initial planning stages. Network execs decided that the schedule would be a mix of unscripted reality shows (which are relatively inexpensive to pump out) and talk shows. The latter would feature mostly Winfrey-made self-help gurus such as physician Mehmet Oz, relationship expert Phil McGraw, and money adviser Suze Orman. The Los Angeles Times TV critic, Mary McNamara, deemed the mix “a big ol’ pity party, with everyone too busy weeping into the low-fat clam dip to remember that it’s OK to can the violins and put on a little dance music once in awhile.”
Media analysts say that viewers were missing something else besides fun: Oprah herself. “The fact that the network was named after her led viewers to believe she would be in front of the camera and not behind the scenes,” says Brad Adgate of Horizon Media, a marketing strategy consultancy in New York.
More than one million people tuned in for OWN’s launch on New Year’s Day 2011, but since then the channel has averaged only 259,000 viewers in prime time, according to data from television ratings company Nielsen. That number is only a fraction of what OWN had projected to its advertisers.
It doesn’t help that the network is not available on basic cable, which means that only 80 percent of homes with cable and 67 percent of all homes have access to it. (Comcast currently pays nothing to air OWN, and Baine, of SNL Kagan, estimates that many other cable distributors pay 2 cents a month per household, far below the typical 20 to 25 cents that most networks charge.) Another drawback is that OWN airs on a high-number channel in most markets, so it’s hard to find, lost in a sea of stations. (In Chicago the network airs on channel 220 on Comcast and channel 279 on DirecTV.)
Whereas the syndicated Oprah show captured about seven million viewers daily, OWN’s original programs have typically drawn just a few hundred thousand each. Addicted to Food, a docu-series chronicling the challenges of eight seriously obese people, averaged only 126,000 viewers per episode. Breaking Down the Bars, a reality series about women in prison, didn’t even garner enough viewers to be rated by Nielsen. That means it was watched by fewer than 0.1 percent of viewers in its time slot.
Those numbers had to be excruciating for Winfrey. Long self-conscious about her image, she has never wanted her name associated with failure. Bill Zwecker, the veteran Sun-Times columnist, recalls asking why she didn’t put her name on the Chicago restaurant she opened in the late 1980s with restaurateur Rich Melman. According to Zwecker, Winfrey said, “The restaurant business is tricky. If it closed, I would never want someone to say, ‘Oprah’s restaurant closed.’” (The restaurant, named The Eccentric, did shut its doors after a respectable six-year run in River North.)
On CBS, Winfrey acknowledged to King and Rose that the negative media coverage surrounding OWN has been painful. One USA Today headline in particular—“Oprah Not Quite Standing on Her OWN”—felt like a dagger to the heart, she said, mimicking being stabbed. But she added, “I’m a very driven person.” No way was she going to let something called the Oprah Winfrey Network go under.
Less than two months after the last Oprah show wrapped, she made her move. OWN’s chief executive officer, Christina Norman, had been ousted in May. Winfrey decided to take the job herself. She brought with her Salata and Erik Logan, another former Harpo executive, and made them copresidents.
Winfrey had run a production company before, of course, but she had never run a network. If Zaslav was worried about her lack of experience, he wasn’t saying so. “Oprah’s now at the center of OWN,” he told Forbes in September. “This is the moment we’ve been waiting for.”
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Photograph: PR Newswire
Having to rescue a network isn’t what Winfrey had planned for the next phase of her wonderful life. In 2010, she told Fortune that her idea of a perfect day is working a few hours and then having a leisurely lunch with her friends in Santa Barbara, California, near her Montecito estate. Those pals include the former California First Lady Maria Shriver and the cookbook author Cristina Ferrare, who ended up with a short-lived cooking show on OWN called Big Bowl of Love. (Another example of Winfrey handing out shows to her friends, Discovery insiders gripe.)
Winfrey’s 42-acre estate, which she shares with boyfriend Graham, three cocker spaniels, and two golden retrievers, includes a 23,000-square-foot Georgian Revival main house with six bedrooms, 14 bathrooms, and a home theatre, plus a teahouse, a lake, and several ponds. The shade of the old-growth oak trees on the property, Winfrey has said, is her favorite place to settle in and crack a book. Some people call it Oprah’s Hearst Castle, but she has immodestly dubbed it the Promised Land.
This paradise is 92 miles from Los Angeles, where OWN is headquartered. Winfrey commutes by helicopter. She flies to Chicago—the city that made her a star—much less frequently. When in town, Winfrey stays in the 13,000-square-foot duplex condominium she owns at Water Tower Place. (She has talked about breaking it up and selling off all but 3,000 square feet, which she would keep as a crash pad.)
But as the new CEO assumed command of OWN, one of the most important things on her agenda was right here in the Windy City: The Rosie Show, to be filmed in The Oprah Winfrey Show’s now-vacant West Loop studios.
In 2010, Winfrey decided that the key piece of OWN’s programming day would be a feel-good talk show. At the top of her wish list for hosts was Emmy-winning comedian Rosie O’Donnell, who had helmed her own wildly popular daytime talk show from 1996 to 2002. But that was before O’Donnell came out as a lesbian and then showed an abrasive side as cohost of The View, which Winfrey worried might resurface. (When Winfrey flew to New York to woo O’Donnell, the latter assured her that she would be on her best behavior, according to Fortune.)
Debuting ten months after the network did, The Rosie Show launched last October in prime time amid much fanfare. Its initial viewership, nearly half a million, was respectable by cable standards. But the numbers fell by half in the first week and kept plummeting, hitting an average low of 77,000 during the show’s eighth week.
One of the show’s former staffers says that O’Donnell took the blame for the network’s own failings. Those included airing the show at night rather than during the day, when her natural audience would be more likely to watch. Under pressure to cut costs early on, O’Donnell kept tinkering with the format (Cut back on the live audience! Get rid of the live audience altogether!). “The show was finding its direction,” insists the staffer, who requested anonymity because of a confidentiality agreement.
In March, after five months, Winfrey put the show out of its misery. “The most painful thing was to have to let people go,” she told Rose and King on CBS This Morning. “I had to lay off 30 people.” When Rose asked what that was like for her, she amended: “I, actually, didn’t do it. We had a team of personnel people come in to do it.”
More management reshufflings were announced at the same time, notably the moving of Discovery’s chief financial officer, Neal Kirsch, to the job of chief operating officer at OWN. (More than a dozen top executives have come and gone so far, according to industry watchers.) In a statement, Winfrey implied that the changes were made for financial reasons: “The economics of a start-up cable network just don’t work with the cost structure that was in place. . . . I have a responsibility to chart the course for long-term success for the network.”
The money picture got brighter in April, when Comcast signed a multiyear deal to start paying to carry OWN’s programs beginning in 2013. (A source close to Discovery says that distributors will pay 20 cents a month per household and 30 cents in the “out years” of the deal.) Comcast also agreed to make the network available to an additional three million households. “We are more confident in [OWN’s] business prospects than we’ve ever been,” says Discovery spokesman David Leavy. “Any talk about [Discovery] pulling out or shutting down is completely ill informed.”
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But a network does not succeed by cost cutting and dealmaking alone. The key is creating content that people want to watch. Winfrey has said that she aims to fix OWN one night at a time, starting with Saturday. On March 31, the network debuted a new Saturday prime-time lineup.
The second season of Welcome to Sweetie Pie’s, a reality show about a family-run soul food restaurant in St. Louis, airs back-to-back episodes starting at 8 p.m. Central time. The season premiere ratings more than doubled to 500,000. Nearly 390,000 viewers stuck around for a new original series called Beverly’s Full House, another reality show, which chronicles what happens when former model Beverly Johnson allows her daughter, son-in-law, and their newborn to move in with her.
And Winfrey recently cut a deal to broadcast reruns of the CBS series Undercover Boss, in which CEOs disguise themselves as low-level workers at their own companies. Each episode ends with a heartwarming “reveal” where the boss hands out cash and promotions. “It feels on-brand for us,” Logan says.
So far, so good. During the first quarter of 2012, the network saw an overall 14 percent increase in its target female demographic during prime time versus the first quarter of 2011. However, Winfrey made some rookie mistakes along the way. For example, in February she violated long-standing Nielsen policy by begging her nine million Twitter followers to tune in to OWN during ratings sweeps. “Every 1 who can please turn to OWN especially if u have a Neilsen box [sic],” she tweeted. Nielsen officials publicly chastised her and said that OWN’s ratings for that night would appear with an asterisk because she had tried to influence them. (Winfrey apologized.)
Despite the uptick in total viewers since she took the reins, Winfrey’s own shows are still the network’s biggest draws. Ratings for Oprah’s Lifeclass have risen significantly since last year, when she changed it from a rehash of old Oprah clips to a new show where she works with various experts to solve the problems of studio audience members.
And OWN’s sole blockbuster to date was Winfrey’s March 11 interview with Whitney Houston’s grieving daughter, Bobbi Kristina Brown. That well-promoted episode of Oprah’s Next Chapter drew 3.5 million viewers, making it the second most-watched show that week on cable among women in the sought-after 25-to-54 demographic. It was a testament to Winfrey’s continuing power to land the big interview.
But even if she wanted to, it’s impossible for Winfrey to be on the air all the time. Salata, for one, doesn’t think that’s the key to OWN’s success anyway. “It’s not just throwing Oprah up night after night,” she says. “It’s about doing quality shows that Oprah is excited about.”
Will that be enough to save OWN, let alone turn it into the kind of success The Oprah Winfrey Show was? Don’t bet on it, say many industry experts and brand strategists. For one, demographics aren’t in her favor. Winfrey is pushing 60, and so are many of her viewers. Most advertisers want to capture younger people, who, in marketing parlance, have a higher customer lifetime value. As for carrying the torch of women’s empowerment, well, a new generation has already picked it up, says Christie Nordhielm, a marketing professor at the University of Michigan’s Ross School of Business. “Lady Gaga is doing a pretty good job,” she notes.
Jeffrey Sonnenfeld, a professor at the Yale School of Management, has a more positive take. “There are some limits about how far [Winfrey] can leverage her brand, but she is learning as she is growing,” he says. “What’s really encouraging is her public contrition. So many people start to believe their own mythmaking [and] will never acknowledge their own human frailties. Admitting a mistake actually doesn’t make you weaker, it makes you stronger.”
Words that Winfrey herself would no doubt embrace. While admitting to some trepidation, she told King and Rose on that April day: “I will die in the midst of doing what I love to do.”