Oprah Winfrey's Network Slowly Clawing Way Out of Trouble

This story first appeared in the Oct. 19 issue of The Hollywood Reporter magazine.

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After a launch marked by delays, executive turnover, mounting costs and foundering ratings, Oprah Winfrey's OWN might finally be clawing its way to success. The network notched its third consecutive quarter of ratings growth for the recently ended third quarter, and several signs point to a turnaround for her joint venture with Discovery Networks.

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Winfrey's presence on the network has helped; Oprah's Next Chapter is among its top-rated programs, averaging 839,000 viewers since it premiered in January, while sought-after guests including Whitney Houston's daughter, Bobbi Kristina (3.5 million viewers), and pop star Rihanna (2.5 million) have set ratings records for OWN -- and showcased Winfrey's still-formidable booking abilities.

Also reassuring for network execs is the traction achieved by non-Oprah-fronted programs, led by Welcome to Sweetie Pie's and life coach Iyanla Vanzant's Fix My Life, which scored the network's top series debut for its two-night premiere Sept. 15 and 16. Meanwhile, on Oct. 1, Winfrey announced an exclusive deal for pal Tyler Perry to produce scripted shows for OWN, luring him from a potential pact with Lionsgate, distributor of his Madea films, to rebrand the company's moribund TV Guide Network to "Tyler TV."

The improvements are well timed: Carriage fees -- and, in some cases, increases -- that cable and satellite providers pay for OWN are due to kick in next year. Already the net has added 3 million subscribers thanks to an expanded deal with Comcast, announced in April, bringing the total homes in which OWN is available to 83 million. More importantly, Comcast also will begin paying for OWN in January.

Still, SNL Kagan analyst Derek Baine says OWN could lose as much as $143 million this year. Discovery disputed that report, and CFO Andy Warren said Sept. 19 at an investor conference that he expects the venture to break even in the second half of 2013.

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He allowed that OWN's losses could mount in the third quarter on increased marketing and programming costs. But Winfrey and her team are charging ahead. "Oprah is very fond of saying we're exactly where we should be," says OWN president Erik Logan.

"We all knew it would take some time to take this turn; it certainly is a welcome narrative."