The Business of Oprah: A Case Study on Bouncing Back

January 6, 2012  |  

From the outset, OWN seemed like a sure fire success. The queen of daytime TV with a multi-channel media empire takes over cable television. However, the channel’s first year was plagued by disappointing ratings, leadership shakeups and immense scrutiny from the public and the industry. Some critics said it was time for Oprah to throw in the towel. But, they could not really think that was an option. You don’t become media royalty by giving up.

As in life, things don’t always go as planned in business. As the Oprah Winfrey Show wrapped its farewell season, OWN was set up to be the natural extension of Winfrey’s reign over the ratings. It had a $250 million investment from Discovery Communications and the most recognizable face in television as its brand ambassador. But viewers didn’t respond to the channel’s skimp lineup of original programming. OWN has averaged 135,000 viewers a day, an 8 percent drop from what Discovery Health drew in 2010.

The blame for the channel’s lackluster performance has been passed around. Industry insiders have blamed Oprah’s lack of presence on the channel. Winfrey herself identified management team errors in planning and execution and the channel’s lack of a library of programming as the culprit. Whatever the reason, Oprah isn’t wallowing in the channel’s failures. Instead, she is dedicated to finding a solution.

Her response to OWN’s woes is a good example of how to handle yourself when unexpected problems arise. “Yes, some mistakes were made. Who hasn’t made mistakes? The real beauty is you can say, ‘I learned from that,'” Winfrey told Associated Press. “I don’t worry about failure. I worry about, ‘Did I do all I could do?'”

Winfrey admitted her role in OWN’s slow start. Her attention was on wrapping up her show, not launching the channel. Last July, Winfrey expanded her role at OWN by adding the role of chief executive and chief creative officer to her position as chairman. In addition to giving viewers more Oprah, she is looking to the popular shows on the network to gauge what new programming to include in the lineup.

Her renewed commitment to the channel is already paying off. The two-hour premiere of Winfrey’s new series “Oprah’s Next Chapter” on Sunday brought the channel its highest ratings since its launch, scoring 1.1 million total viewers.

The biggest lesson here is to keep things in perspective and maintain an outlook that is optimistic and realistic.  Industry trades have called for Discovery to pull the plug and speculated that Winfrey should be using her own money to fund the venture. But, it takes more than one year for a channel to get off the ground. Winfrey hasn’t let murmurings of her downfall sway her view on OWN’s potential.

“Somebody was talking to me in that kind of saddened, ‘How are you?’ tone, and I was thinking, ‘I’m fine,'” said Winfrey. “I realized the reason people have this tone is they’re reading all the press (about OWN), so you see me and wonder if I can still walk… I am a determined and committed woman. I don’t give up. I’m just getting started,” she said in a recent interview.

That resiliency may be the key to her success thus far.


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