Oprah To End Show In 2011

Many media companies will feel an impact from the announcement by Oprah Winfrey Friday, that her widely popular daytime talk show will be leaving the air in September 2011. Oprah, 55, plans to turn her attention to the new cable network that she is planning to launch in association with Discovery Communications Inc (NASDAQ: DISCA).

"The Oprah Winfrey Show," which debuted in 1986 as a Chicago-based local broadcast that quickly spawned into a media empire. The show is seen in more than 140 countries around the world, as it is one of the television industry's largest money-makers.

The show has long been the financial anchor of local daytime television station through the syndication of CBS Corp. (NYSE: CBS). As advertisers have cut back on money spent for television promoting, ad rates for Oprah's show have remained largely unchanged as 7.1 million viewer tune in per day on average.

The success of the show has allowed her to launch a magazine bearing her name, a book club, and the female-geared Oxygen cable network.

The loss of the Oprah Book club will surely have an impact of the publishing industry as her seal of approval on various book titles have been making instant bestsellers since she began recommending reading material in 1996. Books that are promoted by Oprah bear a seal of approval which is essentially a license to print money for publishers who are lucky enough to receive it.

"She has an integrity and connectivity to her viewership that is unmatched by any other television broadcast personality,” said Stuart Applebaum, a spokesman for Bertelsmann AG's Random House publishing. "Happily she enjoys reading books and wants to persuade her viewership to enjoy them as much as she does."

Oprah plans to be involved with every aspect of programming on "The Oprah Winfrey Network," which is set to be a 50-50 partnership with Discovery. OWN will replace the lowly Discovery Health Channel.

Analysts at Wedbush see a annual revenue loss of $50 million at CBS, noting that slumping ratings for the show would likely have an impact on the advertising rates in the future. The loss of the show could allow local stations to expand regional news coverage, which would save stations money, due to the subtraction of Oprah’s substantial license fees. Wedbush maintains a Neutral rating and a $13 price target.

Shares of CBS are down 2.86 percent to $12.93 in current market movement. Shares of Discovery are down 1.32 percent to $30.71.