The news that "The Oprah Winfrey Show" is going to end after 25 years so that its host can devote herself to a new cable channel set off reverberations in TV and financial circles late last week. But nowhere was the effect felt more keenly than in Silver Spring, where the Maryland-based Discovery Communications was vaulted into a new realm of prominence and prestige as the future home of The Oprah Winfrey Network.
Discovery, a cable channel once known for showing inexpensive documentaries, has found itself the talk of both Wall Street and Madison Avenue, as everyone from financial analysts to managers of network affiliates and -owned stations that depend on "The Oprah Winfrey Show" to provide an essential lead-in to their early evening newscasts wondered how the move would affect them.
"In one swoop, this jumps Discovery and, by extension, cable up to another league," says Douglas Gomery, media economist at the University of Maryland, College Park. "There's been a narrowing between the lowest-rated network and the highest-rated cable shows. Football on cable made the first breakthrough; this is the second, a cable TV talk show with Oprah. And the financial ramifications of that are huge."
Friday morning, a tearful Winfrey stood before her Chicago audience to make the formal announcement of the news that broke Thursday night. The 55-year-old broadcaster - who got her talk-show start in 1976 at Baltimore's WJZ-TV - deftly made it sound almost as if the decision had come down from on high.
"After much prayer and months of careful thought, I've decided the next season, Season 25, will be the last season of 'The Oprah Winfrey Show,' " she said. "I love this show. This show has been my life. And I love it enough to know when it's time to say goodbye. Twenty-five years feels right in my bones. And it feels right in my spirit."
But even as she was delivering those words in her TV temple, Wall Street was calculating how many of hundreds of thousands or millions of dollars, depending on market size, Winfrey's decision was going to cost stations in lost revenue. They were also handicapping winners and losers.
J.P. Morgan was already circulating an analysis titled "Much Ado About Oprah" on Friday. It offered the best, no-spin, hard-nosed critique on the street.
"Discovery appears to be the 'winner' in this announcement," the Morgan analysis says. "We think OWN should benefit from not having 'The Oprah Winfrey Show' on competing broadcast stations. However, the extent of Ms. Winfrey's on-air involvement is still to be determined."
Noting that Winfrey's "network will come out of the gate with over 70 million households" as Discovery re-brands the Discovery Health Channel as OWN, the Morgan analysis also notes that the network's launch has been delayed several times. It was initially scheduled for a launch this year but has been delayed until 2011, without any explanation. There were similar delays and issues when Winfrey helped form the Oxygen cable channel for women in 1998. Winfrey, however, claims it was never her vision, and eventually severed ties with that operation.
But such past matters were quickly dismissed amid all the speculation as to what Winfrey's move will mean to her and her new Discovery partner.
Discovery has come a long way from its modest beginnings in Landover in 1985 with154,000 subscribers. Today, it encompasses 10 channels, including Animal Planet, TLC and the Science Channel. Several of its franchises and series have cut through the cable clutter and found a solid niche. Who hasn't at least heard of "Deadliest Catch," "Storm Chasers, "Dirty Jobs" or Shark Week"?
Still, Discovery Communications has been making in money in 2009 at a time when many other broadcast and cable outlets are hurting. Profits for the first quarter of 2009 for Discovery Communications rose to $119 million from $34 million in the same period in 2008.
"There is no bigger brand in media than Oprah Winfrey," David Zaslav, Discovery Communications president and CEO, said. "She has changed the broadcast landscape and how people consume television. Along the way, she has impacted our culture and touched us all. Discovery Communications has a tremendous partner in Oprah, and we look forward to bringing her and her creative vision, programming and unique voice to approximately 80 million homes on OWN, as well as online through the award-winning Oprah.com."
No words were more important in the wake of the announcement than the ones in a Friday statement from Winfrey's Harpo Productions, which said that the talk-show host plans to "appear and participate in new programming for OWN."
That's big news, because initial reports of the 50-50 partnership between Winfrey and Discovery Communications that have been circulating for more than a year said she would not do a talk show on cable. Winfrey, Harpo and Discovery have been intentionally vague because of the potential that Winfrey might have contractual difficulties with broadcast stations that have bought "The Oprah Winfrey Show" into 2011.
If a new show is announced for OWN, those stations might find advertisers reluctant to buy time on a show seen as a lame duck when they can hold their money for the new Oprah talk show on OWN.
That's why the Harpo statement also said that she would appear on-air at OWN "only after production wraps" on "The Oprah Winfrey Show."
But in the end, the deal makes sense only if Winfrey does a talk show on cable, and that statement indicates she will.
"That will be the game-changer," Gomery says. "Cable already has most of the best dramas on TV. It has sporting events that draw audiences comparable to the broadcast networks. Its news channels are gaining on the networks every day. And now, it will have the most popular talk show on television - with this star that is such a force."
University of Syracuse pop culture scholar Bob Thompson says that any analysis of the move has to allow for the fact that Winfrey is a "force of culture and nature" who cannot be underestimated.
"Oprah Winfrey is more than a TV show, she's a lifestyle," Thompson says. "With the magazine, book club, radio, the acting in movies, producing TV shows, she's a cultural empire. Just as a TV figure, she's in a league with Walter Cronkite, Johnny Carson and Mr. Rogers. So the last thing you want to do is underestimate her."
But pointing to a decline in ratings and sky-high syndication fees that have made her show what the Morgan report termed a "loss leader" for some stations, Thompson says, "To make this work, she will have to do her talk show on OWN because, in the final analysis, the entire Oprah cultural empire is built around her being on TV five days a week."
Thompson believes, "There is a legitimate question as to whether she will ever be as big on Discovery" as she is now on easy-to-find broadcast stations like Baltimore's WBAL.
"But even if she never is this big again, this deal still gives Discovery a flagship like it's never had before. I wonder how many people never heard of Discovery Health before the news that it was about to become the Oprah Winfrey Network."
June 1985: The Discovery Channel, under the leadership of John Hendricks and with its headquarters in Landover, debuts with some 154,000 cable subscribers. By September 1988, that number has risen to 33.8 million.
May 1991: Discovery acquires The Learning Channel (TLC), the beginning of a cable chain that has since grown to include Animal Planet (June 1996), Travel Channel (December 1997).
August 1999: Discovery Health Channel is launched.
October 2003: "Trading Spaces: 100 Grand" draws more than 9 million viewers, the highest-rated show in TLC's history.
January 2006: Ted Koppel, after retiring from ABC, signs on to produce shows on global topics and events for the Discovery Channel.
May 2007: Discovery's 11-episode "Planet Earth" series garners more than 65 million viewers, cable's highest-rated natural history program ever.
January 2008: Discovery Communications and Oprah Winfrey announce plans to create the Oprah Winfrey Network (OWN),a multi-platform venture combining Discovery Health Channel and oprah.com.
November 2009: Winfrey announces that "The Oprah Winfrey Show" will end in September 2011, so she can devote her energies to OWN, which is now scheduled to begin airing in the first part of 2011.