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Building an Empire: Oprah’s Formative Years
Oprah’s ambition did not diminish with the success of The Oprah Winfrey Show. After her successful acting debut in The Colour Purple (1985), Oprah’s desire to expand into the film and television industry was further fueled. In 1988, Oprah became the third woman in the American entertainment industry to own her own studio when she created Harpo Studios. Oprah’s name read backwards, Harpo is a television and film production, magazine publishing and online media company in one. “I did this to really expand into the areas I wanted to and take over the show to create more time for me to do features and TV specials,” she said.
Wanting to have relative complete control over the company, Oprah made herself CEO, giving only her long-time lawyer Jeff Jacobs 5% ownership (his share would rise to 10% when he became company president in 1989). After negotiating the successful syndication of The Oprah Winfrey Show, Jacobs had garnered Oprah’s trust and was thus brought in as a partner. Oprah believed she would need a manager as the company grew so as to allow her time to focus on the quality and delivery of her own show.
Immediately after closing the deal, Oprah bought a film production studio in Chicago, which was to be the new home for her own show as well as host to other projects. Covering 88,000 square feet and featuring three separate sound stages, Oprah spent $20 million in renovating the space.
Harpo slowly expanded its activities from the production of a TV movie, The Women of Brewster Place, in 1989, to signing a deal with ABC in 1995 for the production of six made-for-TV movies. ABC had been eager to attach its name to Oprah ever since her rising popularity from Chicago AM. The company later diversified its activities, producing films for theatre release such as Beloved, which was released in 1998 by the Walt Disney Company. Unpopular with the public, Harpo went back to producing made-for-TV movies.
In 1998, Harpo teamed up with ABC Internet Group to launch Oprah.com. That same year, Harpo joined with several partners to form Oxygen, a new cable channel dedicated to women’s issues. Harpo also entered the publishing business with Oprah’s own magazine, O, The Oprah Magazine. After just seven issues, O had two million subscribers, making it the most successful new magazine in American history. Oprah told Fortune that of all her accomplishments, she was most proud of her magazine, “because I didn't know what I was doing.”
Oprah has refused to follow in Martha Stewart’s footsteps by taking her company public. She says that selling her name or any part of her business is akin to selling herself. “If I lost control of the business,” she says, “I'd lose myself – or at least the ability to be myself.”
The company is not without its challenges. While Harpo is known for paying its employees well, they must sign a lifelong confidentiality agreement, barring them from talking or writing about Oprah’s personal or business affairs and those of her company for the rest of their lives. This has resulted in some disgruntled workers, but no legal challenge against Harpo to date has been successful. To bring a measure of corporate governance while still maintaining her personal touch, Oprah brought in television executive and one of her former bosses, Tim Bennett, as COO.
Today, Harpo has 263 full-time employees, modest turnover (10% to 15% a year) and earns $275 million in revenues. It is a media powerhouse that competes with giants like Lifetime and AOL Time Warner. And, Oprah remains as committed as ever: "I believe I'm just getting started.”
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