Network execs talk OWN, Lionsgate plans

Voice and new distribution models are critical to success

The trick to making Oprah Winfrey’s new cable network OWN a success will be “trying to find the right voice,” David Zaslav, the CEO of Winfrey’s partner, Discovery Communications, said Monday. “We know it won’t have the right voice on day one,” said Zaslav, adding that OWN will listen to its viewers to find it.

OWN, a 50-50 partnership between Winfrey and Discovery, is set to launch on Jan. 1 on what is now Discovery Health, seen in 80 million homes.

Speaking at the annual UBS media conference in New York City, Zaslav said distribution fees at Discovery Health are very low or non-existent and he believes there is tremendous room to boost revenues once it is converted to OWN. Of the 13 channels Discovery operates in the U.S., Zaslav said it receives the fewest licensing dollars from Health. He also said OWN will be distributed in Canada shortly after its launch in the U.S.

As the U.S. pay TV market matures, Zaslav said he sees big opportunities in emerging markets overseas where pay TV penetration stands at about 50%. The key to gaining share overseas is to take U.S. programming and air it in foreign markets, but make those shows feel local. Discovery owns nearly all of its content.

In an earlier session at the UBS conference on Monday, Lionsgate vice chairman Michael Burns likened Carl Icahn to Lord Voldemort, the arch enemy from the Harry Potter series. Icahn, Lionsgate’s largest shareholder, has been agitating to replace Lionsgate’s current management. With Icahn breathing down management’s neck, Burns said “it has been a frustrating process… . It is certainly a distraction.” Icahn brings his proxy fight to Lionsgate’s annual shareholder meeting in Los Angeles on Dec. 14. He is proposing a slate of five directors to replace nearly half of Lionsgate’s board members.

On new distribution models for TV and film, Burns said it will be the consumers who will decide platforms and price. “If we don’t pay attention, we will turn into dinosaurs,” Burns added.

Burns said he still thought a Lionsgate-MGM combination made sense. “It would be a terrific fit for us at the right price,” said Burns, adding that consolidation in the movie biz is inevitable. MGM is expected to emerge from a pre-packaged bankruptcy later this month in combination with Spyglass Entertainment. “We like the Spyglass guys,” said Burns. “We think (toppers) Gary (Barber) and Roger (Birnbaum) are smart guys.”

In his annual assessment of the TV broadcast networks, CBS chief research officer David Poltrack (he’s spoken at 20 UBS conferences) said online streaming of shows offers big upside to broadcast nets, and that viewers have shown a tolerance for watching a comparable number of ads online as they watch during an episode on TV (roughly 10 minutes). “You could say this is creating more ad value for us than with DVR playback,” said Poltrack.

And after years of audience growth in cable, Poltrack said he is “seeing relative competitive stability,” where in a given season any network, broadcast and cable, can be up or down.

He also said that broadcast networks were not getting credit from advertisers for about a third of their audiences, given the uncounted out-of-home viewership and those viewers who don’t fit into Nielsen’s standard demographic categories.

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