Harpo Entertainment Group

FOUNDED: 1986

Contact Information:

HEADQUARTERS: 110 N. Carpenter St.
Chicago, IL 60607
PHONE: (312)633-1000
FAX: (312)633-1111
URL: http://www.oprahshow.com

OVERVIEW

Harpo Entertainment is wholly and privately owned by Oprah Winfrey. The company has four divisions: Harpo Productions, Harpo Films, Oprah Winfrey Presents, and Oprah Online. The television talk show The Oprah Winfrey Show produces nearly 70 percent of the company's estimated $150 million in revenue. The show is seen in approximately 120 countries and enjoys the highest ratings of any talk show in the world.

Oprah Winfrey is a successful entertainer, known for her ability to connect with people. Although Harpo Entertainment doesn't release strategic plans, the feeling is Oprah wants to bring what she believes is good, wholesome entertainment to her fans. Many of her movies and television specials, for example, deal with strong, courageous women.

COMPANY FINANCES

Harpo is a privately held company; therefore, it doesn't release financial information to the public. Sales estimates for the company ran between $140 and $150 million in 1997, up 7.1 percent from the estimated $140 million the company earned in 1996. In 1986 when Harpo Entertainment gave King World Productions the right to distribute The Oprah Winfrey Show through the year 2000, it was said King World received 43 percent of the gross profits for the first two years of the deal. After that, Harpo's take increased from 57 percent to approximately 70 percent. As the show grosses over $180 million per year, Harpo received (after the second year of syndication) over $103 million. The Oprah Winfrey Show generates approximately 68 percent of Harpo's income.

ANALYSTS' OPINIONS

Oprah Winfrey is one of the most successful entertainers in history. Forbes magazine consistently ranks her among the top 10 highest-paid entertainers, ranking her third in 1997. Analysts say her influence is enormous, pointing to the success of her recently launched book club. Some point out that her integrity is practically unquestioned among her viewers; her "every woman" style of relating to her audience and people in general give her credibility. Other fans can relate to Oprah because she tells of personal experiences. In addition, she offers practical advice about how people can improve their lives.

Some critics don't care for what The Wall Street Journal called the "Oprahfication" of America. These critics feel talk shows, such as Oprah's, make it too easy for people to feel good about themselves.

HISTORY

Oprah Winfrey began her career as a news anchor in Nashville, Tennessee, at the age of 19. From there she traveled to Baltimore, Maryland, to anchor the evening news on a local station. Soon she switched to co-hosting a local morning talk show called People Are Talking. As the popularity of the show grew, ABC moved her from the affiliate station in Baltimore to the one in Chicago. Oprah began hosting AM Chicago, focusing on ordinary people and their concerns. The show soon became number one and was renamed The Oprah Winfrey Show.

Oprah wanted to assume more control of her show, so she obtained the syndication rights to it and formed Harpo (Oprah spelled backwards) Entertainment in 1986. After acting in several movies, Oprah decided her production company would also make movies and television specials, and Harpo Films was made a subsidiary. In 1990 Harpo bought a production studio in Chicago. This move made Oprah one of only three women (the others being Mary Pickford and Lucille Ball) in television and film history to own her own production studio.

STRATEGY

Oprah Winfrey's strategy seems to be to control her destiny. The Oprah Winfrey Show is extremely successful, with over 20 million viewers. Its success comes from Oprah's feel for so-called ordinary people. She comes across as an ordinary person, with ordinary concerns, and uses these as topics for her show. Her enthusiasm for a topic is evident, as no topic is covered without Oprah's approval.

Prior to the debut of The Oprah Winfrey Show, there were few talk shows on the air, but as Oprah's show gained popularity new ones were introduced. Soon there were hundreds to choose from and the hosts fought to distinguish themselves from one another. Some hosts used "tabloid shows" to generate high ratings; such programs focused on negative, the bizarre, and the sensational. Initially Oprah tried to compete with such shows, but eventually she was disgusted by it all. In 1994 Oprah pledged that her show would no longer cover sensational topics, but would focus instead on positive stories that could make a difference in her viewers' lives. Her ratings suffered, falling from the number-one spot. But Oprah fought back, and her show consistently falls in the number-one or number-two spot nationwide.

Through her film division, Oprah seeks to offer movies and programs she believes most people want to see. Keeping control of the company allows her to develop projects others might pass over.

CURRENT TRENDS

Oprah doesn't just follow trends, she creates them. An avid reader, Oprah decided to share some of her favorite books with her audience, and in September 1996 she created Oprah's Book Club. After one year, millions of people who hadn't picked up a book in a long time were avidly reading Oprah's selections. Every book selected, some of them obscure, averaged over a million copies sold, becoming instant best-sellers.

One episode of Oprah's show dealt with "mad cow" disease and the outbreaks occurring in Great Britain. After listening to a guest describe the disease, Oprah commented that she had eaten her last hamburger. That one remark caused beef prices to plunge, creating huge losses for cattle farmers. Texas cattle farmers sued Oprah under a food libel law, but she was found not guilty in a 1998 trial.

PRODUCTS

Harpo Entertainment produces 200 episodes of The Oprah Winfrey Show every year. The company also produces movies such as Beloved; television specials released under Oprah Winfrey Presents, such as Before Women Had Wings; and children's television specials. In the late 1990s Harpo had a five-year movie deal with Disney and a deal with Capital Cities/ABC to produce or star in six made-for-television movies. The company also maintains Oprah Online through the America Online Internet service.

CORPORATE CITIZENSHIP

Because of her background of poverty and abuse, Oprah contributes to charitable organizations that help women and children. In 1997 she attended the President's Summit in Philadelphia, joining the call to volunteerism—something she encourages on her show. Oprah has established educational scholarships at colleges nationwide. In late 1997 she formed the Oprah's Angel Network and encouraged her viewers to get involved. She asks that all share their good fortune with others. One of the features of the Angel Network is the World's Largest Piggy Bank; viewers are asked to contribute their change for college scholarships across the country. Another Angel Network program brings volunteers together to build a Habitat for Humanity home in every market where Oprah's show is carried.

GLOBAL PRESENCE

The Oprah Winfrey Show is seen by more than 20 million people a day on more than 200 televisions in the United States. Estimates indicate the show is seen in anywhere from 64 to 132 foreign countries and is heard and seen over Armed Forces Radio and TV Service.

EMPLOYMENT

Despite her outward openness, Oprah is a private person, and she expects her employees to value and protect her privacy. A demanding perfectionist, Oprah is nonetheless known for her good treatment of employees, who say she is humanistic in her business approach, unlike the typical corporate CEO. Oprah weighs the impact of her decisions on her employees. She is also known to be generous with gifts and even built the Harpo Cafe at the studio.

SOURCES OF INFORMATION

Bibliography

Dickerson, Debra. "A Woman's Woman." U.S. News and World Report, 29 September 1997.

"Harpo Entertainment Group." Hoover's Online, 25 April 1997. Available at http://www.hoovers.com.

"The Oprah Winfrey Show," 20 April 1998. Available at http://www.oprahshow.com.

Rebello, Stephen. "Brand Oprah." Success, May 1998.

Sorkins Directory of Business and Government, Vol. 4, Chicago Edition. St. Louis, MO: Sorkins Directory, Inc., 1998.

"Time 25 - Oprah Winfrey." Time, 17 June 1996.

For additional industry research:

Investigate companies by their Standard Industrial Classification Codes, also known as SICs. Harpo Entertainment's primary SIC is:

7812 Motion picture and Video Production