• by Wayne Friedman , March 21, 2012

The Oprah Winfrey Network could lose some $143 million by the end of 2012. But with some modest changes -- slightly higher advertising sales and improved license fees -- one estimate says the network could possibly turn a profit by the end of next year.

SNL Kagan says OWN's cash flow could get into the positive territory -- $35 million -- by the end of 2013. But there are a lot of "ifs."

OWN needs to make major improvements and adjustments -- especially in needed gains in viewership. Some positive hints of this recently occurred with "Oprah's Next Chapter," which grabbed some decent numbers as a result of special guests on the show in the wake of Whitney Houston's death.

Kagan estimates with some added distribution and other factors, expected growth in gross advertising revenues could land at $108.8 million by the end of 2012, $160.1 million in 2013, and $235.2 million in 2014. Estimates are the average daily cost-per-thousand viewer price for OWN was $5.30 in 2011 -- up 22% from the year before.

Currently, Derek Blaine of SNL Kagan estimates OWN is getting a somewhat microscopic 1 cent a subscriber per month from cable operators.

Next year, Discovery Communications, part owner of OWN, might look to package OWN with its other networks when it comes to renewals with cable operators. Ideally, it would aim to get 20 cents to 25 cents per sub/month for OWN. Blaine thinks this may be unrealistic now. OWN might instead get a more modest 10 cents per sub/month.

Ratings are still weak. Prime-time household viewership for the network have average 197,100, with daytime household numbers at 109,900.

There are many hurdles and adjustments for the network, which Blaine says could include some major write-downs, and perhaps Oprah Winfrey's Harpo Productions financing more of the losses going forward.

"Without a significant ratings boost by year-end, this could be Oprah Winfrey's last chapter in the cable network industry," Blaine writes.

However, a spokesman for Discovery Communications said: "The report is riddled with inaccuracies and bad information. The venture is on more solid ground with more business momentum than ever before. Last Sunday, OWN was the No. 1 cable network for women and people at 10 p.m.  We remain confident in the future of OWN, and the long-term value we are building."