Oprah’s Mag In Financial Trouble

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July 27, 2011 ‐ By TheEditor

Oprah WinfreyBy Alexis Garrett Stodghill

O, the Oprah magazine, is suffering from a steep decline in ad sales for the months of August and September. The New York Post reports that O has suffered a 31.4% drop in ad pages for August, compared with an overall industry decline of 7%. Ouch. Even worse — September’s outlook is more grim with another 18.2% loss.

 BET News has noted: “In comparison, Martha Stewart Living was down 14 percent and Every Day With Rachael Ray was down 25 percent for the same month.” For some reason O is taking the worst hit out of all the celebrity-driven tomes. Industry speculation into why links the decline of her magazine to other reversals of fortune.

Oprah’s brand may be crashing due to the ending of her eponymous network show. The lackluster ratings of OWN’s cable programs have failed to sustain the interest in Winfrey that everyone banked on. Media watching blog Fishbowl NY has this to add:

Oprah hasn’t had the same zing behind her name since she left her show and started OWN. Somehow, shows such as “Ryan and Tatum: The O’Neals” have failed to grab the public’s attention, and OWN’s ratings have taken a beating. Now it appears that Oprah’s decline is impacting O, The Oprah Magazine as well.

An O spokesperson says […] the magazine is “the best place for fans who miss the show to stay engaged with the brand.”

While that might be true, if Oprah isn’t personally handing out the magazines to consumers (and maybe yelling out “You get a car! You get a car! You get a car!” too) there might not be enough power behind the brand to make people care.

Getting intimate with fans despite the loss of her daily show is just what the mogul plans to do. To counter the diminishing power of her name, Winfrey is personally planning to hit the road for grass roots promotions that will also generate income. She is set to appear at an “O You” event in Atlanta in the fall, which is expected to generate $725,000 — if all 5,000 tickets are sold at $125 a piece. But this is chump change to Winfrey — and more importantly the Discovery Channel.

Remember: This cable giant has invested hundreds of millions of dollars on the gamble of transforming Oprah’s beloved energy into a powerhouse cable network. So far this hasn’t happened, with ratings for OWN being lower than the Discovery Health Channel it was engineered to replace. The Discovery channel initially invested $189 million in Oprah’s cable play, and in February of this year put in another $50 million. She will have to do quite an extensive “O You” tour to make that money back, let alone generate a profit.

Was it hubris for Oprah and the Discovery Channel to believe that translating the magic of her network program to cable would be easy? Her old show was free, available in every major market, and 100% about Oprah. The limited reach of OWN, offered in some markets in which viewers have to pay to watch programs that do not showcase her, make this new venture an entirely different game.

Hopefully Oprah will come up with the right strategy for playing it successfully. Expecting fans to blindly follow hasn’t worked.

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