Net to add $50 million for programming
Discovery Communications will invest another $50 million in Oprah Winfrey’s OWN on top of the $189 million it has already allocated for the cable network, executives said Friday. CEO David Zaslav said OWN, launched Jan. 1, has received strong support from advertisers and predicted it will break even on an operating profit basis in 2011.
The additional investment will be used to create programing, said Zaslav, adding that he was “very encouraged” about the prospects for OWN. “We have one of the best brands in media and a very engaged Oprah,” he said. He said 24 new shows would launch on OWN this year, and that when Oprah herself appears on the channel later this year ratings and ad revenues would gain significant traction.
Under Zaslav’s stewardship, Discovery has rebranded several of its channels: Discovery Times to Investigation Discovery (ID); Discovery Health to OWN; Discovery Kids to The Hub; and more recently, FitTV to Discovery Fit and Health. Next up? Planet Green. Zaslav said the channel will be re-branded. “We feel like we could something else more meaningful” with Planet Green, he said, without offering any clues about what the channel will become.
In reporting its earnings, Discovery said revenues in the quarter ending Dec. 31 grew 7% to $1 billion and net profits by 32% to $205 million. For the full year, revenues rose 9% to $3.8 billion and net profits grew 17% to $641 million. Executives projected that revenues for 2011 would be between $4 billion and $4.1 billion.
For its U.S. networks, advertising in the fourth quarter rose 13% to $323 million and revenue from distribution fees was up 7% to $261 million.
Zaslav acknowledged that the Discovery channel had soft ratings in the fall, mostly in October, but he added that since then the launch of four new series, including Auction Kings and Gold Rush, have helped boost viewership.