Oprah joins Discovery to create her OWN cable channel

NEW YORK -- Oprah Winfrey's media empire is about to get a lot bigger with the announcement Tuesday of a deal with Discovery Communication that will provide her with a cable channel to be called OWN: The Oprah Winfrey Network.

In the cashless transaction creating an independent, 50-50 joint venture, Discovery will contribute its Discovery Health Channel, to be rebranded as OWN in late 2009 and simulcast in High Definition. The channel, launched in 1999, reaches more than 70 million cable and satellite subscribers.

Winfrey's company, Harpo, will kick in her website, Oprah.com, which the companies say tallies more than 6 million unique visitors and 80 million pageviews a month.

Winfrey will be chairman of the independent venture, to be named The Oprah Winfrey Network LLC, and wield full editorial control. She says the partners have candidates in mind to become CEO handling day-to-day operations.

She wants the new partnership to resemble her relationship with Hearst in publishing O, The Oprah Magazine.

"I am the voice of the magazine and the vision of the magazine, but I have people there who can execute that voice and vision," she says.

Her goal is to create a network "that will inspire and entertain people around issues of money, weight, health, relationships, spirit, helping people to raise their children and give back, teaching people to be all that they can be in the world," she says.

The new partners gave few details about what programming they'll run on OWN or how much they'll spend.

Discovery CEO David Zaslav says it will be "primarily non-fiction, but the overall programming strategy will be something that Oprah will put together."

Winfrey says until her contract with CBS-owned King World Productions expires in 2011 she can't put her syndicated show, or re-runs of it, on the new network.

"Eventually that will happen, we hope," she says.

OWN will differ from Oxygen, where she was a founding investor: "That channel did not reflect my voice," she says. "Shortly after the deal I took myself off the board."

She left open the possibility of working with other parts of her empire, which includes Harpo Films and Oprah's Books.

OWN could provide a boost for Discovery, where Zaslav is engaged in a whirlwind campaign to re-energize the company's middle-of-the-pack channels. This summer, for example, he'll convert Discovery Home into an environmentally oriented Planet Green network.

"We will put all of our resources at Discovery, domestically and internationally on all of our platforms, to try and push through (OWN's) mission," Zaslav says. "Our core mission is knowledge and curiosity, and this is right in our sweet spot."

Discovery Health also faced an uncertain future as cable and satellite companies look to reduce the fees they pay for channels that fail to attract big audiences.

With fewer than 200,000 viewers in prime time, Discovery Health made its first profit in 2007, with $7.4 million in cash flow on revenue of $141.8 million, according to estimates from research firm SNL Kagan.

"They need audiences to jump-start the network," says SNL Kagan analyst Derek Baine. "So the timing of the announcement is pretty good."

Zaslav also expects big improvements at Oprah.com, which he says "is in its adolescence." It primarily deals with topics raised on Winfrey's weekday show but will evolve into a companion tool for programming on OWN.

In a staff memo, he says Discovery's networks and websites will promote OWN and handle distribution. Discovery and Harpo will both provide ad sales services.

Discovery is in the process of going public and hasn't decided whether it will consolidate the venture into its financial reports.

Discovery Holdings DISCA is a publicly traded company that includes 66% of the non-voting equity in Discovery Communications.