Discovery Communications CEO David Zaslav on Tuesday reported improved second-quarter financials amid continued ratings gains at key cable networks, but the results came in below Wall Street expectations.
During an earnings conference call on Tuesday, Discovery Communications CEO David Zaslav said that OWN, the cable network joint venture with Oprah Winfrey's Harpo, has turned cash flow positive ahead of its most recent timetable.
The company later said that OWN turned a cash flow profit in the second quarter.
Previously, it had said a cash flow breakeven or maybe profit would come some time in the back half of the year.
"I am proud to report that, when combined with the long-term affiliate fees that the channel has previously secured [and advertising revenue], OWN is now cash flow positive and starting to pay down the investment Discovery has made in the venture."
He added: "I want to congratulate Oprah and the entire team at OWN for this significant milestone - and we remain very bullish on its long term trajectory and our ability to drive continued asset appreciation in the future."
Management said that its investment in OWN that Discovery will over time get paid back currently stands at $509 million. The network's cash flow will only rise from here, Zaslav predicted. And CFO Andy Warren also predicted positive earnings for OWN in the second half of the year, saying there will be "some big second-half numbers."
Meanwhile, Zaslav touted higher carriage fees that pay TV operators have paid for OWN - compared with predecessor Discovery Health - and "significant" ad growth as seen in this year's upfront, which saw OWN record double digit percentage growth and add 30 new marketers. Plus, ratings in the core demo of women aged 25-54 rose 39 percent in the second quarter.
Zaslav also gave a shoutout to Tyler Perry and lauded his two OWN shows "The Have And Have Nots" and "Love Thy Neighbor" as "bona fide hits" and "big hits." A third Tyler show is set for a fall launch.
Overall, OWN is now a top 20 channel for women and a top three channel for African American women, including some days when it takes the top rank, Zaslav said.