Peter Kafka

Recent Posts by Peter Kafka

Why Broadcast TV Won’t Miss Oprah

oprahYou can debate whether Oprah Winfrey’s plans to shut down her broadcast show–in 2011–and move to cable constitutes “news.” Ditto for what it means for the culture.

But what do Oprah’s plans mean for the TV business? Not that much, argues JP Morgan (JPM) analyst Michael Meltz. Short version of his note published this morning: It’s not bad for OWN, the cable network Oprah co-owns with Discovery (DISCA). But it’s also not terrible for CBS (CBS) and Disney’s (DIS) ABC, the two broadcasters currently in the “Oprah” business.

That’s because while the move makes for unpleasant “optics”–bizspeak for “looks bad”–for broadcast, it turns out that Oprah didn’t make that much money for the business. (But plenty for herself, obviously.)

Medium-sized version of Meltz’s argument:

  • The show made $50 million a year for CBS, which syndicated the program. CBS would rather have that money than not, but losing it will amount to a “rounding error” in 2012.
  • The show was a big ratings hit for local TV stations, but they paid a lot for it–upward of $200,000 a week in big markets. That made it a loss-leader for most broadcasters, Meltz says.
  • And yes, the show provided a big lead-in audience to local TV news broadcasts, particularly in top ABC markets. But given that it’s not going to end up on a rival broadcast channel, “it is conceivable that station audience/ad share won’t change much for the day-part.”

Okay. Back to the crying and teeth-gnashing.


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