Oprah Winfrey - The Story of an Entrepreneur

The Oprah/Harpo Empire Contd...

Analysts noted that though the market was down and many magazines had posted losses in 2001, 'O's advertising revenues increased by 43% over its revenues in 2000. 'O's paid-up circulation amounted to an estimated 2.5 million copies, which was more than that of leading magazines such as Vogue or Martha Stewart Living. 'O' targeted the premium segment, which had an average income of $63,000 and patronized premium brands such as Lexus, Coach and Donna Karan (which were key advertisers for 'O'). Oprah described 'O' as a personal growth manual and took an active part in the content development of the magazine. Analysts remarked that 'O' was a reflection of Oprah's personality. The success of 'O' was primarily attributed to Oprah's popularity.

Commenting on the high revenues earned by the magazine in terms of advertising revenue Black said, "Advertisers have unanimously responded to the powerful presence of Oprah. The magazine is a new voice for a new time – a lifestyle magazine with heart and soul." However, Oprah's talk show continued to be her biggest success, generating revenues of over $ 300 million annually. The show was aired in over 107 countries in the world and was watched by 26 million people in the US itself. It remained the number one talk show in the daytime slot for 16 years, despite competition from over 50 rivals. According to Bob Iger (Iger), President, Walt Disney, the Oprah show contributed significantly to the company's profits (Walt Disney's ABC Network syndicated 'The Oprah Winfrey Show' in many major markets).

The show appealed primarily to women in the age group of 30 to 50 years. Since most of the audience was from the middle class, the show attracted huge advertising revenues from companies such as Wal-Mart, Procter & Gamble and Sears.

Oprah – The Entreprenuer

Despite the fact that she was the owner of a huge business empire, Orpah reportedly did not even know how to read a balance sheet and did not follow any corporate models. She had declined offers from many companies such as AT&T, Intel and Ralph Lauren to be on their boards, stating that 'she did not understand what she would do on their boards.' Oprah was once reported to have hoarded $50 million in cash, which she called her personal 'bag-lady fund,' as she was afraid of investing in the stock market, being totally ignorant about it. Interestingly, she did not like being referred to as a businesswoman.

Commenting on her 'ignorance' of doing business the 'usual' way, she said, "If I called a strategic-planning meeting, there would be dead silence, and then people would fall out of their chairs laughing." According to analysts, Oprah was not in the 'business of business,' she was in the 'business of soothing souls.' The kind of intimacy Oprah enjoyed with her audiences was something that reportedly no other talk show host had ever achieved.

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Case Details

Case Code : LDEN006
Themes: Corporate Social Responsibility/Woman Entrepreneurs
Case Length : 14 Pages
Period : 1957-2000
Organization : Infosys
Pub Date : 2002
Teaching Note : Not Available
Countries : Japan
Industry : Media and Entertainment

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