Kim Kardashian Saves Oprah Winfrey: Celeb Interviews Poise OWN For Comeback

After sinking more than half a billion dollars into the talk-show titan's namesake cable channel, Discovery Communications (Nasdaq: DISCA) on Tuesday reported that the Oprah Winfrey Network is on track for profitability in the second half of 2013. The prediction is a sharp turnaround from just a few months ago, when Winfrey herself was touring interview circuits and telling tales of her desperate struggle to keep the network from collapse.       

"I am in the climb of my life," Winfrey told a crowd of media executives in New York in April. "I am climbing Kilimanjaro, and it's all on Wilshire Boulevard at the OWN offices."

Ratings at the network have been soft since it began in January 2011. Viewership peaked during a behind-the-scenes look at the final season of Winfrey's hugely popular syndicated talk show, which aired its last episode in May 2011. After that, ratings tumbled, and not even power personalities like Rosie O'Donnell could salvage them. O'Donnell's "The Rosie Show," which debuted amid a flurry of hype in late 2011, attracted a paltry 186,000 viewers on a good night. In March 2012, it was cancelled after less than six months on the air.

Ironically, part of the problem with OWN's initial struggles might have stemmed from the enormously high profile of its talk-show-queen eponym. While most fledgling networks have to prove viewership before they can attract blue-chip advertisers, OWN worked in reverse -- luring in top companies such as Procter & Gamble and Kohl's, which were attracted to what was presumably a very loyal fan base for the Oprah Winfrey brand. After a disappointing first year, however, both of those companies reportedly cut their advertising commitments. As one media analyst told Bloomberg Businessweek, "advertisers will only wait so long for that audience to come."  

Now that wait may be almost over. On a Tuesday earnings call with analysts, David Zaslav, CEO of Discovery Communications, said that ratings for OWN are up 25 percent compared to the same period last year. Even more encouraging is that the network is attracting 14 percent more viewers for its core demographic of women 25-54. Some of that success is the result of good old-fashioned programming savvy. OWN has gotten smarter about utilizing its most valuable asset, Winfrey herself, who after taking a more behind-the-scenes role in the venture she co-owns with Discovery has begun to do more of what she does best: interview celebrities. Her June sit-down with Kim Kardashian was OWN's third highest-rated telecast ever.

All of this spells good news for a network that has largely been dead weight in an otherwise stellar year at Discovery Communications. According to its second-quarter earnings report released Tuesday, earnings at the cable-network operator are up 15 percent, due to a combination of lower taxes and higher revenue. Discovery, which also owns TLC and Animal Planet, in addition to its flagship Discovery Channel, saw its profits increase $293 million, or 76 cents per share, for the period ending June 30. The company is on track for a net profit of up to $1.1 billion this year.  

As for the future of OWN, after calling it "one of the best brands in media," Zaslav suggested to analysts that the secret to its success might be as simple as remembering its audience. "We're quite confident that we've begun to find the recipe for a strong women's network," he said.