Cablevision to Carry Oprah Network

NEW YORK ( TheStreet) -- Cablevision ( CVC) has agreed to carry The Oprah Winfrey Network next year, the companies announced on Tuesday.

OWN will launch on Saturday, Jan. 1. The new lifestyle channel will be available in both standard and high-definition on what is now the Discovery Health channel.


Television distributors such as Comcast ( CMCSA) and DirecTV ( DTV) already carry the Oprah Network.

Discovery will retain 50% ownership of OWN, while Winfrey's production company, Harpo, will control the other 50%.

With the addition of Cablevision's 3.5 million subscribers, OWN will be available in close to 85 million homes nationwide. The terms of the agreement were not disclosed.

OWN, which is a joint venture between Harpo and Discovery Communications ( DISCA), will feature over 20 original series, including Ask Oprah's All Stars, The Gayle King Show and In The Bedroom With Dr. Laura Berman.

Analyst David Miller of Caris & Co., an equity research firm, predicts that OWN will operate at a loss in 2011 and 2012, and will breakeven by mid-2013.

He forecasts that the network will pull in $100 million from advertisements in 2011, but that it will spend $85 million on programming and another $40 million on marketing.

In a Dec. 27 research note, Miller maintained his price target on Discovery shares at $43, but downgraded the stock to average from above average based on his predications. He said that while Discovery is a "super high-quality company" with an "all-star management team," it currently lacks "catalysts."

Several reports speculate that high expectations for the network could magnify any of its failures.

"I know that as I start out on this next chapter, there are going to be some mistakes," Winfrey said at an October conference. "I know nothing new is perfect, but I'm not scared."

Cablevision stock closed at about $33.80 Tuesday, up 22 cents, while Discovery shares closed at $41.77, down 9 cents.

--Written by Theresa McCabe in Boston.

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