• by Wayne Friedman , January 16, 2008

Looking to create a higher profile for one of its lackluster channels, Discovery Communications has made a deal with Oprah Winfrey to revamp its Discovery Health under a new name: "OWN: The Oprah Winfrey Network."

Discovery Health had been bringing in about 20% of the viewership of the company's flagship, Discovery Channel, and that of its other main channel, TLC. Still, Discovery Health has valuable distribution in the form of 70 million cable subscribers.

The 8-year-old network will be 50-50 owned by Discovery and Harpo Productions, Oprah Winfrey's production company, and will launch in 2009. No cash was transacted for this deal.

"In essence, this was an opportunity Discovery could not pass up," says Bill Carroll, vice president and director of programming for TV sales rep Katz Television Group. "Plus, they get the two big things: a presence on Oprah's Web site, as well as cross-promotion on her [syndicated] program."

The non-cash deal makes sense to industry watchers. "Discovery gets the advantage of her name, and she gets the distribution and background operations," adds Carroll.

Typically, when a cable network owner looks to radically change programming as well as the channel name, multiple system cable operators, according to their affiliate agreements, can drop the channel. But executives don't believe cable operators will have a problem with this move.

With Winfrey's new cable channel, local cable systems can now sell to TV advertisers what TV stations have been selling to advertisers for years--via Winfrey's syndication TV program--Oprah Winfrey-branded TV content.

Continuing the focus of her syndicated TV show, OWN's "mission is to create multiple platforms for women, men and their families with a purpose and a passion: to celebrate life, to inspire and entertain, empowering viewers around the world to live their best lives..." according to a press release about the deal.

While Discovery Communications will provide much of the back-office operations for the new channel, handling distribution, origination and other operational duties, it won't totally control advertising sales. The two companies say "both organizations will contribute advertising sales services to the venture."

Some speculate that Winfrey has been looking to turn her company into a version of Martha Stewart Living Omnimedia. MSLO controls all advertising and marketing deals. At present, that isn't the case. Oprah magazine is produced by Hearst Publications, which also sells the ad space. CBS Distribution Television, which distributed her syndicated TV shows, sells the show's TV advertising time.

This is not Winfrey's first go-around in the cable network arena. She was an original investor in Oxygen Media, which was acquired by NBC Universal last year.

Winfrey will serve as chairman of The Oprah Winfrey Network, LLC. The company is now searching for a CEO.