Oprah Winfrey has gone from red to black.
The former talk show host turned cable network owner saw her OWN channel turn a profit in the second quarter – six months ahead of schedule, according to David Zaslav, CEO of Discovery Communications, half-owner of Winfrey’s young enterprise.
The move from red ink to profit was accomplished with additional upfront spending by advertisers and commitments from distribution companies that carry the channel, said Zazlav, who spoke on a morning conference call with Wall Street analysts after reporting a 30 percent rise in revenue and solid gains in profits.
Discovery Communications, the first of the big pure play content companies to report second quarter earnings, said OWN is cash flow positive and will begin paying back Discovery Communications for its investment.
OWN signed around 30 new advertisers in the upfront, Discovery said, and collects around 20 cents per subscriber per month, much higher than other rivals. Zazlav had previously said he expected OWN to turn profitable by Dec. 31.
Winfrey’s network, which launched on Jan. 1, 2011, initially struggled to find an audience and switched out CEOs several times until Oprah Winfrey took charge herself. Lately, though, OWN has drawn big ratings thanks to two Tyler Perry-helmed shows — “Have and Have Nots” and “Love Thy Neighbour” — and Oprah’s own big interviews, including Lance Armstrong’s admission of guilt over doping allegations.
The network’s target audience, women aged 25-54 years old, has increased, pushing total viewership of the network up by 39 percent during the period, the company said.
Oprah Winfrey’s service also carries reality shows such as, “Welcome to Sweetie Pies” and “Oprah’s Next Chapter.”
Overall, Discovery Communications reported operating income before depreciation and amortization increased 23 percent to $668 million from the year ago period, as revenue rose to $1.47 billion – below Wall Street expectations.
Shares fell 2.5 percent in early trading.
Growth was led by a 61 percent jump in international revenue. US revenue was up 13 percent, the company said in a statement ahead of the conference call.
Discovery Communications , home of “Shark Week,” “Breaking Amish,” and “Nik Wallenda’s Skywire Live,” said US advertising revenue rose by 10 percent on a healthy market for its stable of channels, which include TLC, Animal Planet and ID.
Distribution revenue was also strong rising 17 percent in the US, the company said, partly because of growth in licensing revenue.
Profit was $300 million, or 82 cents per share, for the quarter up from $293million, or 76 cents, a year ago. Analysts had estimated profit of 91 cents per share for the period.