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11.19.09

Oprah Changes Channels

Despite slipping ratings and her failings, she was a class act in the daytime wasteland. Kim Masters on how the mogul's exit will affect the broadcast landscape—and what she's got planned.

On Friday, Oprah Winfrey will look into the camera and tell her loyal viewers what they already know: She will end her talk show in September 2011, after 25 years on the air. No doubt she’ll be teary, as will members of her audience. And so will executives at CBS and possibly at ABC, whose pocketbooks will be hurt as a result of this decision.

Winfrey does not have the No. 1 syndicated show on television; nor even the No. 2, though you might suppose that she does. Those titles belong to even longer-reigning champions: Wheel of Fortune and Jeopardy. But Winfrey still has by far the dominant talk show in daytime television. And despite ratings that have slipped, and despite her failings—unleashing Dr. Phil on an unsuspecting world; ditto with James Frey and his faux memoir, A Million Little Pieces—Winfrey was, relatively speaking, a class act in the daytime television wasteland. On Wednesday, she aired her interview with Daniel Day-Lewis, Nicole Kidman, and Penelope Cruz about their upcoming movie, Nine. Her protégée, Rachael Ray, was telling viewers how to make “stuffin’,” and Dr. Phil was doing “Inside Infidelity, Part 2.”

Yes, her ratings have slipped in recent years as numbers in broadcast have slipped generally, Berman said, but “her position as the leading talk-show host remains the same.”

“I think she has blazed a trail,” Ellen DeGeneres told her fans as the news broke Thursday. “She will always be the queen of daytime television…She deserves to rest.”

Of course, Winfrey is not planning to rest. She owns half of the not-yet-launched cable channel OWN (the Oprah Winfrey Network). In a letter sent to staff Thursday, Tim Bennett, president of Winfrey’s Harpo Inc., said, “If you think the last quarter century has been something, then ‘don’t touch that dial’ as together we plan to make history in the next 20 months and beyond.”

Winfrey’s show reaches the entire country and is seen on ABC-owned stations in top markets. Those stations pay big fees to air the show because it is a valuable lead-in to their news programs. Some observers say those fees have become so burdensome that ABC may be relieved its owned stations no longer have to pony them up.

“For years, people have been talking about what will happen when Oprah goes away,” said Joel Berman, formerly president of worldwide television distribution for Paramount Pictures, with such shows as Judge Judy and Entertainment Tonight. “It was, ‘If she goes away, I’m fine with it. But if she’s on the air, I’ve got to have her for my station.’ But paying those fees was always worth it because the show did big ratings and it was a fantastic lead-in. No one ever lost their job by paying big bucks to keep Oprah Winfrey on their air.”

Still, with the economic downturn and audience fragmentation, ABC may be prepared to accept life without Oprah. The math isn’t so complicated for CBS, which collects a nice fee for distributing the show. For CBS, Winfrey’s departure is a straight shot to the bottom line. Company sources were quick to point out CBS still distributes most of the top 10 syndicated programs, including Entertainment Tonight, Dr. Phil, Wheel of Fortune, and Jeopardy. But one television veteran estimates that Winfrey’s show grosses about $300 million a year, translating to a fee around $45 million every year for CBS.

It’s unclear whether Winfrey will give herself a program on her cable channel, though it’s hard to imagine she won’t. (Initially, she said she hoped to move her show to OWN, though it appears that her thinking may have changed since then.) The question is whether she’ll be able to pull in the kind of audiences she did in the broadcast world. Some point to what happened with Howard Stern after he went to Sirius: He made lots of money but never could generate the same buzz.

Former Paramount executive Berman rejects that analogy. Many people do not subscribe to satellite radio, but “everybody will have access to the Oprah Winfrey Network,” he said. “The Howard Stern thing doesn’t work. It’s going to be a little bit harder to find it, but people will be able to find it.”

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In fact, Winfrey’s move can be seen as a vote of confidence in cable at a pivotal time. “It’s a blow to broadcast television to lose the Oprah Winfrey Show,” Berman said. Yes, her ratings have slipped in recent years as numbers in broadcast have slipped generally, he said, but “her position as the leading talk-show host remains the same.” (And with shows featuring high-profile guests Whitney Houston and Sarah Palin, Winfrey’s ratings have improved this year.)

No doubt her decision will burnish the reputation of David Zaslav, the well-regarded CEO of Discovery. Discovery is Winfrey’s partner in OWN, and for some time now the joint enterprise has been looking like a problem. Having been announced in January 2008, it was supposed to launch this year. Obviously it didn’t, and at this point it doesn’t have a start date.

Zaslav is said to have pressured Winfrey to give up her talk show and focus on her cable venture. Now he’s prevailed. Whether her touch remains golden with a whole channel to program remains to be seen. Check your listings and tune in—some time after September 2011.

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Kim Masters covers the entertainment business for The Daily Beast. She is also the host of The Business, public radio's weekly program about the business of show business. She is also the author of The Keys to the Kingdom: The Rise of Michael Eisner and the Fall of Everybody Else.