The Emerging ‘Sweet Spot’ for OWN: The Oprah Winfrey Network

This week, we look at how our ‘Sweet Spot’ methodology applies to the emerging factual production budgets for OWN – the Oprah Winfrey Network.

Next week, we examine OWN’s exciting partnership with ro*co productions to identify feature documentaries for a monthly slot inspired by Oprah’s celebrated book club.

OWN will launch on January 1, 2011, replacing Discovery Health in around 80 million of the 115 million U.S. TV homes.

OWN is a 50/50 joint venture between Discovery Communications (DCI) and Oprah Winfrey. Ms Winfrey is OWN’s chairman, and the channel is based in Los Angeles.

Oprah is without peer as a dominating creative media personality, producer, and effective advocate of personal and social improvement. Of the thousands of channels worldwide, we know of only one other that is branded with the name of its creative force: the Disney Channel.

According to Oprah Winfrey: “My vision for OWN is to create a network that inspires our viewers and makes them want to be who they are on their best day”.  Ms Winfrey enjoys “full editorial control over the joint venture and (is) responsible for OWN’s programming, branding and creative vision.”

OWN will announce its schedule later in the year. The channel’s declared target demo is Adults 18-49, though the audience is expected to skew Female.

Lifetime, Bravo, WE, TLC, HGTV, USA, MTV, Hallmark and Oxygen are amongst the many channels that actively compete for comparable program ideas.

OWN has not yet announced plans to launch international channels.

A Snapshot of OWN’s Development Process …

• For 2011, OWN is expected to commission 600 hours overall, including 200-300 new primetime hours. These are mostly series.
• The remaining 300-400 hours are for daytime strips.
• Fifteen original series have been announced to date, including:
  • Oprah’s Next Chapter, Visionaries: Inside the Creative Mind, Your Own Show: Oprah’s Search for the Next TV Star, Gayle King Live! Why Not? With Shania Twain, Behind the Scenes: The Oprah Show Final Season, and Breaking Down the Bars, a series about women who attempt to salvage their lives in prison.
• Most, if not all, commissions are work-for-hire.
• The series that are announced or are in development draw on a wide range of factual formats including: competition-based reality shows, life crisis intervention formats, observational docs, biographies, and extended celebrity interviews.
• As well as Ms Winfrey’s Harpo Productions and Discovery Studios, the well-established production companies commissioned to date include:
  • Mark Burnett Productions, 44 Blue Productions, Pilgrim Film & Television, Radical Media, Gay Rosenthal Productions, True Entertainment, Part2 Pictures, Love Productions, Snackaholic Productions, and Stuart Krasnow Productions. 

Recapping the ‘Sweet Spot’

• The ‘Sweet Spot’ is a useful concept for mature U.S. factual networks. It helps us understand the programming decisions made by advertiser-supported Factual channels operated by AETN, Discovery, Rainbow, Scripps, MTV Networks, Nat Geo and others.
• The ‘Sweet Spot’ benchmark is based on the network’s investment strategies, revenues, schedule, the competitive situation, contributions from co-producers and partners, the hours commissioned for a series, and more.
• It is also based on the ‘going rate’ for comparable productions.
• The ‘Sweet Spot’ is the cost that the Director/VP of Development/Programming is comfortable presenting to the final decision-maker, expecting buy-in for an approved idea that meets on screen standards and budgets.

What Can We Say about OWN’s Costs?

Our ‘Sweet Spot’ analysis doesn’t apply as neatly to OWN as it does to mature channels. Amongst the unique factors shaping the situation are:

• These are early days:  OWN hasn’t yet reached the scale of greenlit programs to establish firm cost benchmarks.
• Our industry has never experienced the rebranding of a mid-level cable channel by such a dominant creative personality. We can’t predict how this unique situation will affect otherwise routine network decisions about investments in programming.
• OWN hasn’t announced the ‘Signature’ or ‘Event’ programs that will anchor its promotions.
• OWN’s plans and budgets will be shaped by Harpo Productions’ core experience, which is to create daily, talent-driven, syndicated programs. We can only guess at OWN’s tolerance for talent costs, including Ms Winfrey’s.
• OWN’s chief executive is a highly-regarded and steady hand coming from MTV Networks, home of award-winning Factual entertainments of the kind that will be featured in OWN’s schedule.
• DCI is a 50/50 partner, contributing expertise across every aspect of the network management process.

And then there are the routine factors involved in a new network launch:

• Deadlines: It’s May already, and OWN is under some pressure to close deals so that programs flow out of the pipeline by launch day.
• New channels tend to pay a ‘launch premium’, particularly for programs that are highly promotable right out of the starting gate.
• OWN’s concepts and production budgets will evolve in response to successful commissions, and then after launch, to ratings. As with all launches, there will be surprise hits and shocking misses.

OWN’s Budget Benchmarks

Despite these many ‘early days’ qualifications, OWN’s commissioning process is comparable to other networks. OWN is in the channels business. The announced producers are steady suppliers to other advertiser-supported channels, and their production costs are well-known.

*****************

DocumentaryTelevision.com ‘Sweet Spot’ Report

Purchase our original research findings about the ‘Sweet Spots’ for 25+/- U.S. channels.

The ‘Sweet Spot’ Report covers:

• Network budget benchmarks for original commissions
• Several levels: Signature, High, ‘Sweet Spot’ and Low
• We cover ‘the biggies’ and diginets

*****************

OWN’s plans and budgets for ‘Signature’ series are not available. 

• Programs with high-level talent will exceed the ‘High’ benchmark.
• Examples of the ‘High’ primetime benchmark are: a reality series with recognized talent; and an observational documentary series that requires shoots in remote locations.
• The ‘Low’ benchmark applies to daytime strips.

OWN is open to programs outside these budget levels on a case-by-case basis.

Next Week:  OWN’s documentary partnership with ro*co productions .

• Inspired by Oprah’s celebrated book club, OWN’s documentary film club will include a monthly documentary film series airing in primetime on the channel, an online community experience on OWN.tv, and potentially, a nationwide theatrical screening event. 

Coming soon: Scripps Networks, HBO Documentaries, Smithsonian Channel, Canadian channels, PBS, BBC, Arte, Music Rights, Digital Deliverables, and much, much more.

Note on Sources

The data is taken from recent interviews with network executives, producers, distributors and experts, as well as from conference presentations and published sources. Actual budgets, rights and deliverables vary from project to project.