TV legend Oprah Winfrey launches her own channel

Oprah Winfrey, the queen of chat turned media mogul, is preparing to reinvent her empire by launching her own cable TV network.

At 56, Oprah Winfrey seemed to be heading into her "la-di-da years" (her term for semi-retirement). But in 2011 the queen of chat is preparing to reinvent her empire by launching her own cable TV network: a lifestyle channel called the Oprah Winfrey Network (OWN). It is "the scariest thing" she has ever done.

Given the risks (see below), Winfrey's jitters are understandable, says Fortune. Still, she seems to have negotiated a great deal. Neither Oprah currently worth around $2.7bn nor her private holding company, Harpo Inc, has contributed a cent to the joint venture with Discovery. Yet she owns 50% of the equity and retains full editorial control over the channel's output.

Having scooped one of the world's hottest media brands, Discovery isn't complaining. After all, there has never been anyone quite like Oprah. "Part Johnny Carson, part Rupert Murdoch, part Anna Wintour, she is a TV legend, media mogul and taste-maker all rolled into one" the force behind the most successful daytime programme in TV history. A mere mention on her show can catapult a book, hand cream or cupcake to best-seller status.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Yet what Fortune calls the "Oprah effect" extends way beyond that. Many maintain she "made" Barack Obama after telling him in 2004 that she believed he was "the one". Her influence over American culture is so all-pervasive that the FT recently named her as its "woman of the decade".

The story of Oprah Winfrey's rise from rural poverty is intrinsic to her brand and the fascination she holds for audiences, says the FT. In 1985, unlike most talk-show hosts, the young woman from Kosciusko, Mississippi, "was not male, skinny, perfectly groomed or white" and she made a point of "sharing" her struggles. Born on a farm in 1954, she spent her childhood flitting between relatives, suffering sexual abuse from the age of nine. At 12, she moved to Nashville to live with her father, who encouraged her academically and she won a scholarship to Tennessee State University. There she gained local fame after winning two beauty contests. By the time she was 19, Oprah had become an anchor on Nashville's evening news. A Baltimore talk show soon followed and in 1985 The Oprah Winfrey Show was born.

Despite wearing her heart on her sleeve battles with weight, the vicissitudes of her relationship with long-term boyfriend Stedman Graham, the loss of a baby at 15 the real Oprah remains an enigma, says The Guardian. Even "poison-pen writer" Kitty Kelley, who set out to "debunk the mystique", couldn't find an Achilles heel. "A tendency towards privacy" has developed into a "business philosophy". Oprah now has so many outlets through which to stream her story that she neither welcomes nor needs external coverage.

"If I lost control of the business I'd lose myself or at least the ability to be myself," she told Fortune in 2002. "Owning myself is a way to be myself."

Will the gamble pay off?

For all Winfrey's "gutsy moves", including her acting debut in Steven Spielberg's 1985 film The Color Purple, "none is as bold" as OWN, says Fortune. Indeed, many wonder why she is risking the "platinum asset" of her brand and reputation on such a gamble. Cable TV might deliver far greater profit margins than broadcast TV, but the record for start-ups is patchy. And it should surely give Winfrey pause for thought that when fellow lifestyle diva Martha Stewart moved her show to cable, she attracted just one-quarter of the viewers she had on broadcast TV.

Winfrey's not in it for the money or so she says, notes Reuters. But the line-up of shows on the new channel isn't without controversy. It includes a daytime chat show hosted by Rosie O'Donnell (who some in the US consider overly abrasive). Then there's the reality show Finding Sarah, fronted by the scandal-hit former Duchess of York. The theme is self-help, and the publicity blurb is decidedly gushing. The Duchess hopes the show will help her "find a peace I haven't felt in my whole life, free from my mind tormenting and judging and calling me names".

Some of the channel's output "for people who are interested in reaching their greatest potential" might not be to British tastes, but Winfrey knows her market, says the FT. OWN will be up against scores of lifestyle channels, "but no one competitor clearly combines the various elements of Oprah's optimistic message".

Discovery already reports that early bookings from blue-chip advertisers have been "extremely robust". The challenge for OWN will be to retain the place that The Oprah Winfrey Show earned its host nationally and internationally. The uplifting message this "disarmingly normal billionaire" sends to viewers is that they too can achieve their "true calling". To that extent, she personifies the American dream better than any of her rivals.