* Presents opportunity to showcase OWN to new audiences
* Success will be determined by ratings, future ad gains
* OWN to promote programming to capitalize on large audience
By Liana B. Baker
Jan 17 (Reuters) - Millions of people are expected to watch Lance Armstrong confess to using performance-enhancing drugs in a two-part interview with Oprah Winfrey beginning this evening, likely giving her OWN cable network its largest audience ever.
The challenge for OWN will be convincing those who tune in for the Armstrong interview to come back to the network afterwards. Comedian Michael Ian Black summed up the enormity of that task by tweeting: "Like most of America, really torn between wanting to see Lance confess and never wanting to watch OWN."
Oprah's interview with Armstrong is event programming akin to the Super Bowl or the Oscars. The wave of publicity generated by the event makes getting people to watch that one time easy. But the future success of the network, which is co-owned by Discovery Communications, will hinge on its ability to transform a portion of the audience that tunes in for the interview into regular viewers. That could enable OWN to increase both its advertising rates and the fees it charges cable operators like Comcast Corp to carry the network.
"Sustaining interest on a consistent basis is the problem," said Magid and Associates TV consultant Steve Ridge. "It is much like CNN getting big numbers during a major disaster, or the Weather Channel getting heavy viewership during major weather events. The peaks quickly turn into valleys with hundreds of cable channels to choose from."
OWN plans to highlight its other programming in an effort to capitalize on the Armstrong audience, said OWN President Erik Logan. The network will promote upcoming shows, including Sunday's edition of "Oprah's Next Chapter," in which Winfrey interviews actress Drew Barrymore, as well as "Our America with Lisa Ling," a documentary series that has its season premiere on Tuesday.
Both nights of the Armstrong interview will also stream live to a worldwide audience on Oprah.com, another platform Winfrey uses to promote her channel's shows. They include "Welcome to Sweetie Pie's," which focuses on a family that runs a collection of soul food restaurants, and "Iyanla: Fix My Life," featuring Iyanla Vanzant, a motivational speaker who was a regular on Winfrey's syndicated show.
In another bid to make its programming less reliant on Winfrey herself, OWN recently inked a deal for comedian Tyler Perry to produce shows exclusively for the network. His one-hour drama "The Haves and the Have Nots" and half-hour comedy "Love Thy Neighbor" will premiere in late May.
But OWN's challenge is multiplied by the fact that, despite it being a female-skewing network, a large percentage of the audience for the Armstrong interview is expected to be male. Or, to put it another way, viewers are more likely to be from Armstrong's fan base than from Oprah's or OWN's.
Logan concedes that the long-term effects of the interview won't be known for some time, but added that it will "certainly be a net positive for us."
"It's a great opportunity for the network," Logan said. "We are going to showcase the programming and take advantage of it while we have the interview."
OPRAH IS THE NEXT OPRAH
Winfrey, who topped Forbes' highest-paid celebrity list last year, beat out newsmagazine "60 Minutes" to land the Armstrong interview, the latest in a string of high-profile sit-downs scored by the "Queen of Talk" recently.
Indeed, when Winfrey, 58, left broadcast television in 2011, there was much debate about who would be the "next Oprah." Would it be Katie Couric, or Anderson Cooper, or Ellen DeGeneres? But it turns out, the next Oprah is Oprah herself.
After committing herself to OWN full-time last year, ratings at the network have increased on the back of Winfrey's landing marquee interviews. Her sit-down with Whitney Houston's daughter shortly after the singer's sudden death drew 3.5 million viewers, for instance. Singer Rihanna's appearance in August 2011 grabbed 2.5 million viewers. A two-night sit-down with reality TV clan the Kardashian family brought in more than a million viewers.
Last week, she got late-night host David Letterman on her couch for a therapeutic interview in which he opened up publicly for the first time about his sexual transgressions. The interview garnered 711,000 total viewers, OWN said.
"There will likely not be another Oprah, as fractionalization of viewing has made it a near impossibility to replicate," said Ridge, the Magid and Associates consultant.
Problem is, the ratings pops generated from Winfrey's interviews are short-lived, and viewing afterward resets back to low levels.
OWN averaged 147,000 viewers aged 25 to 54 during prime time in 2012, which is more than 30 percent higher than its first year on cable systems, according to Nielsen data provided by Horizon Media. But that still ranks behind Oxygen in 2012, which averaged 168,000 viewers in that demographic and Bravo, which averaged 475,000 viewers.
But in terms of national attention, the Armstrong interview is the biggest opportunity to happen to OWN yet. If played right, it can turn around the entire network's fortunes, said Syracuse University Journalism professor Robert Thompson.
Pointing to how "Queer Eye For the Straight Guy" raised Bravo's profile, Thompson said, "One big hit can make it for you. This is the kind of thing that can get people to find you and if enough people who find you come back again, this could be the start of a rally."
Small wonder then that the publicity campaign around the Armstrong interview has been orchestrated for maximum exposure. From Winfrey's appearance on "CBS This Morning" on Tuesday and an online teaser clip of the interview, to airing it over two nights in prime time and streaming it online live, the network is pulling out all the stops to entice viewers.
So far it appears to have worked -- everyone from ESPN and "The Daily Show with Jon Stewart" to The New York Times and Buzzfeed have run pieces on the upcoming interview.
"These event interviews are a way to slowly gather back the fanbase from The Oprah Winfrey Show," Thompson said.
ROAD AHEAD
OWN is already capitalizing on the Armstrong interview by selling advertising at a premium to its usual rates, said Logan, though he did not provide specific figures.
The network is giving priority to advertisers who have bought time on "Oprah's Next Chapter," which will air the interview, in the past, and those that will also commit to other shows. Ongoing OWN sponsors include General Motors Co, Target Corp, and Kellogg Co.
But for OWN to leverage the Armstrong interview into lasting financial gains, it needs to boost advertising revenue and distribution fees.
OWN charges cable operators one cent per subscriber per month to distribute the network, according to consulting firm SNL Kagan. But that number is expected to rise to 10 cents per subscriber by the end of this year -- on par with networks Oxygen and Animal Planet -- which would increase OWN's revenue from $106.7 million in 2012 to $239.6 million in 2013.
While one year ago OWN was going through a restructuring that included layoffs, executive departures and a reshuffling of its programming lineup, Discovery executives now predict the network will turn a profit in the second half of 2013.
"OWN has begun to really find a rhythm," Discovery's chief executive, David Zaslav, told analysts on a Nov. 6 conference call.
While the answer to whether OWN can ride the Armstrong interview to sustainable gains won't be known until months after the fact, the confluence of events surrounding the network led Thompson to conclude: "Things are looking a lot more promising for OWN than they were a year ago."
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