Oprah (Harpo Studios)

We close out Season 6 with the story of perhaps the single most successful media entrepreneur of all-time: Oprah Winfrey, and her juggernaut conglomerate Harpo Studios. Born to a poor single mother in the segregated 1950's deep south, Oprah's rise from terrible adversity to wealthiest Black woman in the world ranks among the very greatest American success stories. And oh yeah — along the way she single-handedly created the entire influencer economy, rewrote the blueprint of a modern power broker, and set the world record for most cars given away at one time (276). Sit back, listen and get ready to live your best life. Sponsors: Vanta: https://bit.ly/acquiredvantaServiceNow: https://bit.ly/acquiredservicenow26Legora: https://bit.ly/acquiredlegoraStatsig: https://bit.ly/acquiredstatsig26 More Acquired! Get email updates https://www.acquired.fm/email with hints on next episode and follow-ups from recent episodesJoin the Slack http://acquired.fm/slackSubscribe to ACQ2 https://pod.link/acquiredlpMerch Store https://www.acquired.fm/store! © Copyright 2015-2026 ACQ, LLC Survey link!: http://acquired.fm/survey Carveouts: David: The Dark Tower series by Stephen King https://www.amazon.com/gp/product/B07959YG1R? Ben: Reply All "Long Distance" https://gimletmedia.com/shows/reply-all/6nh3wkSources: http://blackeconomics.co.uk/wp/oprahs-empire/http://www.oprah.com/entertainment/the-oprah-winfrey-show-by-the-numbers-oprah-show-statistics/allhttp://www.oprah.com/oprahshow/The-Oprah-Shows-Most-Shocking-Moments_1https://diverseeducation.com/article/1205/https://en.wikipedia.org/wiki/Oprah_Winfreyhttps://en.wikipedia.org/wiki/Oprah_Winfrey_Networkhttps://en.wikipedia.org/wiki/WW_Internationalhttps://finance.yahoo.com/news/why-oprah-regrets-famous-wagon-233648610.htmlhttps://freakonomics.com/2008/08/06/so-much-for-one-person-one-vote/https://hbr.org/podcast/2018/01/black-business-leaders-series-oprahs-path-to-authentic-leadershiphttps://stmuhistorymedia.org/from-rags-to-riches-the-story-of-oprah-winfrey/https://www.amazon.com/Oprah-Biography-Kitty-Kelley/dp/0307394875https://www.amazon.com/Ride-Lifetime-Lessons-Learned-Company/dp/0399592091https://www.chicagotribune.com/news/ct-xpm-1998-09-25-9809260006-story.htmlhttps://www.cnn.com/ampstories/entertainment/how-oprah-winfrey-built-her-business-empirehttps://www.forbes.com/profile/oprah-winfrey/#c52ce3e5745fhttps://www.forbes.com/sites/jennifereum/2014/09/29/how-oprah-went-from-talk-show-host-to-first-african-american-woman-billionaire/#7f21cfb76163https://www.history.com/this-day-in-history/oprah-gives-away-nearly-300-new-carshttps://www.independent.co.uk/arts-entertainment/tv/news/you-get-a-car-oprah-winfrey-giveaway-studio-audience-gift-tax-members-guests-pay-show-a8208051.htmlhttps://www.independent.co.uk/news/media/tv-radio/an-anxious-america-gets-set-for-life-after-oprah-2285528.htmlhttps://www.latimes.com/archives/la-xpm-2001-feb-21-ca-27886-story.htmlhttps://www.npr.org/podcasts/500692140/making-beyonchttps://www.nytimes.com/1993/02/12/news/jackson-interview-high-in-ratings.htmlhttps://www.nytimes.com/2009/11/23/business/media/23carr.htmlhttps://www.nytimes.com/2012/06/11/business/media/end-of-oprahs-show-tightens-races-for-tv-ratings.htmlhttps://www.pbs.org/newshour/nation/the-oprah-phenomenon-by-the-numbershttps://www.robertfeder.com/2016/06/15/legendary-tv-exec-dennis-swanson-retires/https://www.telegraph.co.uk/tv/2017/05/13/oprah-winfrey-untold-story/https://www.thebalancesmb.com/oprah-winfrey-entrepreneur-1200951https://www.theguardian.com/tv-and-radio/2018/jan/12/oprah-winfrey-unlikely-to-run-for-us-president-but-could-win-if-she-didhttps://www.washingtonpost.com/lifestyle/style/oprahs-last-show-averaged-8957-million-fewer-viewers-than-mash-finale/2011/06/08/AGD5AUMH_story.htmlhttps://www.youtube.com/watch?v=cooRceBiE8E

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00David Rosenthal?

  Did you see the, I think this was a tweet, is it Tom Morello that has a-

• 0:06Ben Gilbert?

  You don't have to go to Harvard?

• 0:07David Rosenthal?

  Yeah, actually I did.

• 0:11Ben Gilbert?

  Really good.

• 0:12David Rosenthal?

  So good.

• 0:24Ben Gilbert?

  Welcome to season six, episode eight, the season finale of Acquired, the podcast about great technology companies and the stories behind them. I'm Ben Gilbert.

• 0:33David Rosenthal?

  I'm David Rosenthal.

• 0:34Ben Gilbert?

  And we are your hosts. Today, we are covering an incredible entrepreneur, Oprah Winfrey and her company, Harpo Studios. Oprah is a fixture of American life, entering the home of tens of millions of Americans through their television set every day at 4:00 PM for the 25-year run of her show.

• 0:53David Rosenthal?

  The Oprah Winfrey Show.

• 0:57David Rosenthal?

  So great.

• 0:58Ben Gilbert?

  It is, but it is the unique story of her business decisions, how she created her brand across her show, a magazine, a cable channel, and more, how she controlled every detail and grew from TV personality to business mogul that we're going to cover today. She is the first black female billionaire, and perhaps most relevant to the acquired audience, she really invented the idea of what we today call an influencer. If you watch a YouTuber, TikToker, have ever bought a product that an internet personality recommended, or even more abstractly, you like thinking about how social platforms are transforming the consumer economy, you really have Oprah to thank for paving the way.

• 1:40David Rosenthal?

  I don't know if you saw, I was watching the David Dobrik YouTube a little bit ago, where he and his crew drove around LA-

• 1:46Ben Gilbert?

  I didn't see it.

• 1:47David Rosenthal?

  And tossed out like, you know, gifts to, he was tossing out like PS4s and cellphones and Xboxes and then like tossing out like $10,000 checks and stuff, but it's like, yeah, I guess who did that first?

• 1:58Ben Gilbert?

  Oprah's done it all. Yeah.

• 1:59David Rosenthal?

  You get a car.

• 1:59Ben Gilbert?

  You get a car.

• 2:00David Rosenthal?

  You get a car.

• 2:02Ben Gilbert?

  Oh, we will get into it.

• 2:03David Rosenthal?

  Oh, yeah.

• 2:05Ben Gilbert?

  As always, if you love Acquired and you want more, you can become an Acquired Limited Partner. Our most recent episode was the first in a mini series that we are calling Venture Capital Fundamentals. We kicked off the six-part series with a deep dive on sourcing, how different firms do it, why it's important, and the different schools of thought around the topic. So if you want to join, you can get access by clicking the link in the show notes or going to glow.fm/acquired and all subscriptions come with a seven-day free trial.

• 2:35David Rosenthal?

  And we have a big announcement about the LP program coming later in the show. So we're going to, we put a little box on everybody's chair who's listening. Don't shake it. We're all going to open it at the same time. We do have an announcement in the middle of the show. Stay tuned.

• 2:50Ben Gilbert?

  The more you learn about Oprah, the more that you learn that as a media personality or a media, I guess that's the right way to phrase it, there's nothing you can do that Oprah hasn't already done.

• 3:01David Rosenthal?

  Literally nothing.

• 3:03Ben Gilbert?

  Yep. All right, listeners. Now is a great time to tell you about a longtime friend of the show, Vanta. AI has scrambled the whole security picture. It used to be that you proved that you were secure once a year on audit or a static PDF. Then everyone would nod and you're done. But in an AI-first world, that doesn't hold up anymore.

• 3:23David Rosenthal?

  Yep. Your risk surface changes every week now. A vendor turns on an AI feature or someone writes in a new model without telling IT and your posture is different than it was last week, let alone at your last audit. Vanta's own research found that around 70% of companies have this quote-unquote "shadow AI" running with no security review at all.

• 3:44Ben Gilbert?

  Right. And that's where Vanta comes in. They're the leading agentic trust platform, meaning they've built the thing that closes the gap. And the way that they close that gap is Vanta Agent. Think of it as a GRC engineer, that's Governance, Risk and Compliance, except that it's software and it doesn't sleep. It finds the issues, drafts the fixes, and cuts the time that you'd spend on vendor assessments in half.

• 4:06David Rosenthal?

  In half? Which is exactly why more than 16,000 companies today run on Vanta. Companies like Ramp, Cursor and Snowflake all stay audit ready and catch the risks that crop up between audits across every vendor, every AI tool, the whole environment.

• 4:24Ben Gilbert?

  And that's the real value. Trust has to be continuous now, which is why Vanta automates your security, your compliance and the work to earn and prove trust. We're huge fans of Vanta over here and literally hundreds of acquired listeners have become Vanta customers at their companies over the years. So you can get $1,000 off Vanta at vanta.com/acquired. That's V A N T A dot com slash acquired for $1,000 off and just tell them that Ben and David sent you. All right, David, now over to you to take us into the story of Oprah and the company that she founded that's behind it all, Harpo Studios.

• 4:59David Rosenthal?

  Well, one disclaimer before we get going is anytime you're talking about Oprah, there is way too much to cover in one podcast episode, let alone one podcast, let alone one show. I mean, we're talking about a woman who owns her own cable network, you know, gets presidents elected. So we can't cover it all here. We're going to be covering her origin story and the business behind her. But two fantastic sources, if you want more Oprah and who doesn't want more Oprah, that you should go check out. One is the local Chicago NPR affiliate WBZ did a great podcast a couple of years ago that Jen White did called Making Oprah. It's a three-part series with a few bonus episodes. Definitely go

• 5:43David Rosenthal?

  check that out. They interview Oprah, they interview Phil Donahue. It's great. And then the other one is a number of years ago, Kitty Kelly wrote a unauthorized biography of Oprah, which is extremely well researched, controversial in many ways, but also forms a lot of the facts and basis for this. So definitely go read that if you want a long, deep picture of Oprah Winfrey. Or should I say Orpa Gail Winfrey, because that is the child that was born on January 29th, 1954 in Cosiyesco, Mississippi.

• 6:18Ben Gilbert?

  Yeah, it wasn't something like people mispronounced her name and so she just said, ah, screw it and changed it when she was younger.

• 6:26David Rosenthal?

  Yeah, so Orpa is a biblical character in the Book of Ruth. That was Oprah's name. But yeah, people, it's not a common name, mispronounced it, you know, read it incorrectly and just started calling her Oprah or Opie when she was young and it stuck.

• 6:40Ben Gilbert?

  Wow.

• 6:41David Rosenthal?

  Yeah.

• 6:42Ben Gilbert?

  How history could have been different.

• 6:43David Rosenthal?

  Indeed, indeed. What would have happened otherwise?

• 6:47David Rosenthal?

  So, everybody knows Oprah, right? And some people may have a sense of her story that got her to become Oprah that we know her today, but I think a lot of people don't. I didn't before researching this and this is just like, you know, this is up there with Andy Grove's story of just such an incredible, incredible triumph over adversity to entrepreneurial success. So, when Oprah was born in 1954 in Mississippi in the deep south, she was born to a single teenage mother, Vernita Lee, who was a housemaid. Her mother and the family believed that Oprah's father, Orpa's father, was a man named Vernon Winfrey and he believed that too.

• 7:29David Rosenthal?

  It's actually extremely unlikely that biologically he was her father because he was on active military duty nine months before Oprah was born, but it is definitely true that he wasn't and is a father to her in every other sense of the word. So after giving birth, Vernita actually left Mississippi when Orpa was very, very young. Orpa, who already then had been started, people were starting to call her Oprah, was raised by her grandmother until she was six years old. Her grandmother taught her to read and started taking her to church. And even like at like two, three years old, Oprah was like already, you know, she loved the stage. People nicknamed her the preacher at church because she would recite Bible

• 8:13David Rosenthal?

  verses for the congregation, even as a tiny little child. That would, that would go on to become a big theme in her life a little later. But then at age six, her mother was living, Vernita was living in Milwaukee, Wisconsin at that point in time, had had another daughter. A half sister to Oprah named Patricia and she sent back home to Mississippi and said, you know, I'm ready to be a mother, send Oprah and I'm going to raise these two girls together. Patricia, very sadly, would die from a drug overdose at age 43. So Oprah goes to Milwaukee, lives with her mother for a while. While she's there, Vernita has another daughter who she puts up for adoption that Oprah wouldn't even know about until

• 8:54David Rosenthal?

  like only a couple of years ago, they were reunited and a son named Jeffrey, who would later die in the AIDS epidemic. So just terrible, terrible tragedy befalling this family. And we haven't even gotten started yet. Oprah shuttled kind of back and forth from Milwaukee to Nashville where Vernon had moved and Vernon had settled down there and he had married a woman named Zelma Myers and he was working at Vanderbilt University as a janitor. They had been trying to have their own children, but were not able to. So loved when Oprah would come to visit. And then at age nine, so between six and nine, she kind of shuffles back and forth between at age nine, though, she goes to

• 9:36David Rosenthal?

  live somewhat more permanently in Milwaukee. And that's where she talks about, one night, she was watching the Ed Sullivan Show and on the television in her mother's apartment and Diana Ross and the Supremes were on. And this was like, this was a huge moment. I mean, you know, the Beatles, of course, have been a bit on Ed Sullivan, but like to have a Motown group, an African American group, a black group, and a group of black women on the Ed Sullivan Show, Sunday night, prime time was, was a huge moment. So Oprah says, "I stopped wanting to be white when I was 10 years old and I saw Diana Ross and the Supremes perform on the Ed Sullivan Show." These are her words. "I was watching television

• 10:18David Rosenthal?

  on the linoleum floor in my mother's apartment. I'll never forget it. It was the first time I had seen, ever seen a colored person wearing diamonds that I knew were real. I wanted to be Diana Ross. I had to be Diana Ross."

• 10:31Ben Gilbert?

  Wow.

• 10:32David Rosenthal?

  Yeah.

• 10:33Ben Gilbert?

  It's, it's so interesting how in so many of these stories, you can sort of pinpoint a moment in someone's life where it started to click for them, where like a key piece of who they would become, you know, snapped into place and their motivation, you can sort of understand from there.

• 10:49David Rosenthal?

  Yeah.

• 10:51Ben Gilbert?

  Hey listeners, quick warning that the next segment contains a high level description of trauma and sexual assault that Oprah experienced. If you or someone within earshot wants to avoid that, you should skip ahead about seven minutes from now. Thanks.

• 11:05David Rosenthal?

  Unfortunately, though, so that was, that was, you know, a great, great moment that would become a driving force, you know, and Oprah, to this day. Unfortunately, though, right around that same time, there was a terrible moment that would also set her down a path that fortunately she steered back from, but she was, right around that same time when she was nine years old, she was raped in Milwaukee by a 19-year-old cousin. As you can imagine, completely shattering this nine-year-old to be raped and exposed to everything at that age. She started spiraling, she started drinking, she started running away, she started having sex regularly.

• 11:47Ben Gilbert?

  Also, she's nine. Like, what does spiraling even mean for a nine-year-old?

• 11:50David Rosenthal?

  Right, I mean, it's just-

• 11:52Ben Gilbert?

  It's heartbreaking.

• 11:55David Rosenthal?

  Totally, totally heartbreaking. The family doesn't understand, and, oh, it's terrible.

• 12:01Ben Gilbert?

  And I think a lot of the family didn't believe her, right? When she later would tell people about this, that, you know, it got swept under the rug.

• 12:09David Rosenthal?

  Yeah, she's spoken a lot about this and can't even imagine. When she's 14, she, this has been going on for five years, she's been molested, abused, raped by several members of the family at this point, and others. She runs away from home in Milwaukee, and Aretha Franklin was in town in Milwaukee giving a concert, and she sees her in a limo, and Oprah runs up to her in the limo and starts sweet-talking Aretha and says, you know, she's from, I think she says she's from Ohio, makes up some story, needs like bus fare to get home or something, and Aretha gives her a hundred dollar bill. And Oprah, of course, then goes and like rents a hotel room for the week.

• 12:52David Rosenthal?

  And supposedly, when Bernita finally finds her, she calls up Vernon and says, I can't, I can't deal with this, with this girl anymore. You need to take her and take her permanently. That's the last time she spends in Milwaukee. And this ends up being, you know, thanks to Aretha, and Aretha will come back later in the story, probably the, just the best thing that ever, ever happened to Oprah. She goes to live with Vernon and Zelma. They instill strict discipline and try and straighten her out. They require her to go, in addition to going to school, she's a sophomore in high school, require her to go to the library and write a book report for them every week. In addition to her schoolwork, Oprah, you know, kind of chafes under this and, you

• 13:35David Rosenthal?

  know, is not happy. And she's particularly not happy because she has a, she has a secret, which is that she is pregnant. And she tries to hide it from her family. She goes to East Nashville High, the first class to integrate the school. It had been an all white school before that class.

• 13:55Ben Gilbert?

  Oh, I didn't realize that.

• 13:56David Rosenthal?

  Yeah, crazy. She tries to hide it from everybody. She kind of, you know, sulks in the back of the classroom. And then a couple of months go by, and that winter, Zelma kind of figures out what's going on and Oprah's getting bigger, of course, and can no longer hide it. So Zelma takes her to the doctor, forces her to come to a doctor's appointment, of course, you know, confirms that she's pregnant. And Oprah says later, having to go home and tell my father was the hardest thing I ever did. I wanted to kill myself.

• 14:22Ben Gilbert?

  Oh.

• 14:23David Rosenthal?

  Can't imagine. So through all of this, Oprah ends up going into labor two months early. She has a son, a baby boy is born in February 1969. Oprah had just turned 15. And because the baby was born so early and then, you know, at that time, so it didn't have the care that preemies have today, the baby ended up dying a month later in the hospital. And

• 14:49Ben Gilbert?

  So sad.

• 14:50David Rosenthal?

  So sad.

• 14:51Ben Gilbert?

  And I mean, just looking at this six year span, we've covered a lot of people on this show who have overcome adversity.

• 15:00Ben Gilbert?

  Oprah's story is almost incomparable in the amount of trauma that she went through in those six years. You know, we've said a couple of times the phrase, you and I both said it, I think, I can't even imagine. It's so, it's so far outside the lived experience that I've had. And I'd imagine the same for many of our listeners, that it requires like a different set of words than I really have for this. And in doing the research for this episode, it is truly unbelievable and just an unbelievable story of character and willpower and who Oprah is as a human, that she was able to become who she became

• 15:42Ben Gilbert?

  after going through all of this terrible, terrible events.

• 15:46David Rosenthal?

  Yeah. And, you know, the only thing I can, the story that we've told on the show that I think can even come somewhat close is Andy Grove's story, you know, looking through the Holocaust. You know, the just heartbreaking thing about Oprah's story here is like, this still happens, you know? This happened for so many people and this still happens. And

• 16:09Ben Gilbert?

  Yeah, David, you touch on something important there. These are manifestations of systemic problems of racism, oppression, and also of violence against women. I mean, it's not just one story about getting a bad luck at the draw here.

• 16:22David Rosenthal?

  Yeah. So the pregnancy and the baby and the baby dying was a total family secret. Vernon and Zelma knew and Oprah, but nobody else knew. The family kept it completely hidden, didn't tell anybody until 1990. So many, many years later, well after

• 16:43Ben Gilbert?

  Eight, what, seven years into her show?

• 16:46David Rosenthal?

  Yeah. You know, when it came out and Oprah finally talked about it, well, this actually Vernon, you know, has a quote, this is in the Kitty Kelly book. He says that when it happened, he said to Oprah, quoting here, "This is your second chance. We were prepared, Zelma and I, to take this baby and to let you continue your schooling. But God has chosen to take this baby. And so I think God is giving you a second chance. And if I were you, I would use it." Whoa. Yeah. That's hardcore. That is hardcore, heavy stuff. But that is exactly what Oprah does. So she goes back to school. She takes like a week off. We're now in, you know, late winter of her sophomore year in high school. And she just completely, completely reinvents herself.

• 17:31David Rosenthal?

  She says, this is a quote from her, "I went back to school and not a soul knew, nobody. Otherwise, I never would have had this life that I've had." So she goes back and she's completely different. She tells everybody that she's going to be a movie star and she's going to be famous. And so she marches into her English teacher's class and tells her this. Their English teacher says, "Okay, great, I'll encourage you." And so she gives Oprah, introduces her to a book of poetry by James Weldon Johnson called God's Trombones, Eight Negro Sermons in Verse. Oprah loves these, this book, these poems. She starts doing kind of dramatic readings of them in the community and in churches around the city.

• 18:15David Rosenthal?

  And she kind of starts becoming a local celebrity, like her readings of these. And again, nobody knows her secrets, right? But like for a 15 year old, like just incredible oration. And she has this deep, you know, Oprah voice already that we all know now. And so she ends up kind of through doing this, she gets the chance to travel to Los Angeles and read for other black church groups in LA. And as she's doing this, she's 15 years old. She visits the Hollywood Walk of Fame and Vernon says, when she, when she came back, she told Vernon, "Daddy, I got down on my knees there and I ran my hand along all those stars on the street and I said to myself, one day, I'm going to put my own star among these stars."

• 18:59Ben Gilbert?

  One day I can buy any star I want.

• 19:01David Rosenthal?

  Yeah, can buy the whole walk. I get into the encouragement of her English teacher, I think. She joins what was then called the National Forensics League at school. It's now the National Speech and Debate Association. And she starts giving orations and speeches at educational contests locally and then around the state. She starts winning. These competitions, then she starts competing nationally. She's traveling all over the country, winning competitions. She goes to Philadelphia. She wins a major competition there. She ends up, I think the next year, maybe, I don't know if it was the, probably the next year, her junior year, she gets elected as vice president of the class. So the first black class officer, remember the high school just integrated the year before,

• 19:42David Rosenthal?

  and she gets elected most popular in the school. And then, her senior year, in 1971, she gets selected as the White House, this is kind of crazy, the Richard Nixon White House at the time, held this thing called the White House Conference on Children and Youth, and it took place in Colorado.

• 20:01Ben Gilbert?

  And like, they selected high schoolers to?

• 20:04David Rosenthal?

  Yeah. So Oprah, on the back of this, she gets back to Nashville, and she ends up participating in the March of Dimes, you know, March fundraiser, and she goes to one of the DJs at the local black radio station, guy named John Heidelberg, WVOL, and asks him to sponsor, because he's like, you know, hey, I mean, who's got a platform that's gonna get, you know, my name out to a lot of people, get sponsors here, you know, well, with a radio station DJ. So when he's talking to her, he's like, you know, you've got a really great voice.

• 20:39Ben Gilbert?

  You should do radio.

• 20:42David Rosenthal?

  Yeah, you should do radio. You should have a podcast. And so, he kind of, you know, tells a bunch of his colleagues, like, hey, this, this, this, this young girl's, like, you know, she's pretty impressive. So she comes back, she does the thing, you know, comes back to collect the sponsorship after, after the march, and he and a bunch of other folks at the radio station, like, hey, why don't you make a, why don't you make a demo tape? And so they like, have her make a tape, they cut a tape there, while she's there.

• 21:07Ben Gilbert?

  How old is she at this point? Because this is like, her first broadcast journalism foray, right?

• 21:13David Rosenthal?

  I think she's 17 at this point.

• 21:14Ben Gilbert?

  Okay. And does she, I mean, I'm asking you as if you're like, an Oprah scholar, but like, do you know if she had any inclination of what she wanted to do with her life at this point? Like, was, would she have seen this as like, this is my end, this is my opportunity?

• 21:29David Rosenthal?

  Yeah, totally. Like, she, she wanted to be, but she was like, you know, she was telling everybody at school, there was, this might have been as part of the, you know, voting for most popular, whatever, like, there was a survey in school of, you know, what do you want to be when you grow up? And, and her answer was famous.

• 21:45David Rosenthal?

  And you know, she'd seen the stars on the, on the Walk of Fame and you know, wanted to,

• 21:50David Rosenthal?

  so they first give her a job just working part-time in the studio and then they give her a show. So she gets a rate, like a real honest to God radio show as a senior in high school. She graduates, she enrolls locally in Nashville at Tennessee State University for college. It's a historically black university in Nashville. College is like, of course, she's, she's super smart. She loves reading, as we'll come up later, and education and you know, she cares about college and Vernon and Zelma really care about her getting a college degree. But really, she just wants to focus on the show. So she doesn't live on campus, she doesn't live at home, she's making money from the show. She moves out, she gets an apartment in town. She starts to keep up in her, up in her sights, selling them even higher. She decides she wants to get into TV.

• 22:33David Rosenthal?

  And legend has it that, so she must've been either freshman or probably sophomore in college at this point. Legend has it that she interviews Jesse Jackson on the radio show.

• 22:43Ben Gilbert?

  Whoa.

• 22:43David Rosenthal?

  Jesse Jackson must've been pretty young at this point, too.

• 22:46Ben Gilbert?

  Yeah.

• 22:46David Rosenthal?

  But already very famous. And, and apparently after, after the interview, Oprah says this later, he, he tells her, he says, "You have the gift."

• 22:57Ben Gilbert?

  Wow.

• 22:58David Rosenthal?

  Yeah.

• 22:59Ben Gilbert?

  And this is what, 1973? And she wouldn't have her own, she wouldn't start what we know as the Oprah Winfrey Show till 83-ish? So it's a whole decade before.

• 23:09David Rosenthal?

  This is, no, this, this would've been like 70 or 71.

• 23:12Ben Gilbert?

  Wow.

• 23:13David Rosenthal?

  So yeah, we're like way, way present. Apparently Jesse Jackson called it first. So kind of on the back of that, she's, she sets her sights on, on TV. And everybody at the radio station is, is super supportive. They know she's, she's going places, so.

• 23:27Ben Gilbert?

  Also, does, does cable exist yet? Like TV at this point is, is like, they're just the broadcast networks, right?

• 23:35David Rosenthal?

  Yeah, like cable's like starting to become a, but cable was started, I think we talked about this on the ESPN episode. It was really for rural areas that couldn't get broadcast reception at this point in time.

• 23:49Ben Gilbert?

  Right, that they would like relay the broadcast.

• 23:52David Rosenthal?

  Retransmit.

• 23:53Ben Gilbert?

  Signals over satellite. They'd bounce it off the satellites down to the ground tower and then use the cable to distribute just the. Yeah.

• 24:02David Rosenthal?

  Yeah. And I think, when did ESPN start? It was a few years later, but it was in the 70s.

• 24:06Ben Gilbert?

  Yeah.

• 24:07David Rosenthal?

  So, yeah, Ted Turner is starting to think about cable networks, but this is still like...

• 24:12Ben Gilbert?

  We're even still pre, like, in terms of the types of programming, like SNL wouldn't start until 75. So, we're, you know, we're in kind of the...

• 24:21David Rosenthal?

  We're closer to Ed Sullivan than we are to ESPN. And also, this is super important, because of all this, it's the local affiliates of the big national broadcast stations that that's the... That is what people think of when they think of TV, and specifically, they think of the evening news. Like, the evening TV news, that is the, you know, crown jewel. You know, you think the top of TV, that's what you think, and that's what Oprah's thinking. I don't know how much of this was a calculated plan, knowing Oprah a little bit vicariously now, I suspect it was. In 1972, she enters, she's a college student at TSU. She enters the Miss Black Nashville beauty pageant.

• 25:02David Rosenthal?

  It was beauty pageant, it's like, you know, Miss America style stuff, you know, with like talent and, you know, all this, all the stuff. She wins that, and then she enters Miss Black Tennessee. She wins that, she becomes Miss Black Tennessee. She goes to the Miss Black America overall thing, and she places like, like...

• 25:18Ben Gilbert?

  Also, how horrible is it that there's Miss Black Tennessee?

• 25:21David Rosenthal?

  Totally.

• 25:21Ben Gilbert?

  That's not just like...

• 25:21David Rosenthal?

  Totally.

• 25:22Ben Gilbert?

  I mean, yeah. I mean, how, like, let's pop up another level and generally condemn the beauty pageant industry, but then the racist part.

• 25:31David Rosenthal?

  Yes.

• 25:34Ben Gilbert?

  But good for Oprah for using that as a platform.

• 25:35David Rosenthal?

  Totally used it as a stepping stone. She, she ends up like, like, I don't know, like 43rd out of 50 in the US, in the national competition, but it doesn't matter. She gets back after that to Nashville, and her radio station colleague, at this point, so she's kind of proven that she's like, you know, she has some credentials of like looks in addition to voice and poise in front of, you know, people. So, her radio station colleagues call up the local CBS affiliate in Nashville, W L A C, and tell them like, like, you gotta hire this girl, like, you gotta, she's, she's... She's her calling is beyond radio.

• 26:14Ben Gilbert?

  Yeah. And, and, and one playbook theme that I'll pull forward here is like, the thing to keep in mind with every step of the way for Oprah is the default pick for whatever she was trying to achieve would not have been her. It would have been in all likelihood, a white male. And so she always had to do a non-traditional thing to give herself a platform and a credential for a reason why she would be the obvious choice over the default choice. And this is a great example of sort of her creativity and her drive to go and sort of acquire whatever credential or whatever leverage she needed to in order to go and, and become the person that gets that next spot.

• 26:55David Rosenthal?

  Yep. Yep. And her just continued, you know, at every step of her career, she's always thinking about the next step. And she does it in such a way like, you know, that's not like, you could be super view that as super cunning and conniving.

• 27:10Ben Gilbert?

  Right. It's not conniving. It's done with poise.

• 27:12David Rosenthal?

  Yeah. Like, everybody knows it. Like, she's, she's super upfront. She's like, I want the star on the Hall of Fame, on the Walkman. Like, I want to own it, you know? So WLAC brings her on. They hire her. She becomes the first black woman on television in Nashville. I think in all of Tennessee, but definitely in Nashville, all while she's still in college, by the way. And she comes on board as a, as a reporter for the, for the news. So not an anchor, but a, but a field reporter. Turns out, among Oprah's many, many great strengths, being a news reporter turns out is not one of them, which she will freely admit.

• 27:52David Rosenthal?

  So she's not a super great reporter, but people love her. Like, she's got, she's got the gift when she's on camera. Certainly nobody looks like her on television, but, um, you know, nobody sounds like her either. She just talks like she's, you think of TV news reporters. You think of like stiff, like, you know, here's.

• 28:10Ben Gilbert?

  Right. But she's, she's relatable. She's authentic. She's powerful.

• 28:14David Rosenthal?

  Exactly. She's one of the audience. And so she ends up, the station sees like, people love her. She gets promoted to, to be an anchor on the evening news.

• 28:25Ben Gilbert?

  You don't do it so good at being a reporter.

• 28:27David Rosenthal?

  Yeah.

• 28:27Ben Gilbert?

  You should come be the anchor.

• 28:28David Rosenthal?

  Just come be the anchor. Stop this, stop this reporting stuff. Very quickly after that, she gets recruited to move to Baltimore and take the co-anchor job on the evening news next to Jerry Turner, who was like a total legend at WJZ in Baltimore. The reason she does it, she makes the move is, A, Baltimore is a much bigger media market than Nashville, period. But also WJZ is the number one station, and this is the number one evening news. Remember, evening news, crown jewel of affiliate TV stations of TV in general.

• 28:57Ben Gilbert?

  I've seen Anchorman. I'm familiar.

• 28:59David Rosenthal?

  Exactly. Yeah, exactly. If you've seen Anchorman, you know exactly how this works. So Jerry is Will Ferrell, basically.

• 29:08David Rosenthal?

  So Oprah drops out of TSU and makes the move up to, up to Baltimore. So she gets there and probably predictably, she and Jerry don't get along or see eye to eye on, on the style. I mean, he's like, you know, super old school Edward Murrow style, like anchor of the news and she's Oprah. And that could work great, but in this case, it doesn't work super great. So a few months in, she gets demoted. She has a multi-year contract with the station, so they can't fire her. But she gets demoted from the co-anchor spot. She gets put in the slot as the weekend features reporter.

• 29:50Ben Gilbert?

  I don't know much about TV, but that doesn't sound good.

• 29:52David Rosenthal?

  Yeah. So the, the assignments, she gets her stuff, like she covers the Cockatoo's birthday party at the zoo. Like, yeah, pretty, pretty, pretty rough. And for somebody as ambitious as Oprah, overcome, overcome everything she's overcome. And then just had this like shooting star ascent from like high school junior to, you know, co-anchor next to Jerry in a huge media market on the number one station in just like a couple of years. This is a pretty big blow, but also like, you know, Oprah, Oprah is not deterred, especially after everything she's been through in life. Like this isn't going to stop her. She like.

• 30:35David Rosenthal?

  Rolls up her sleeves and gets to work and she's like, I'm gonna be the best damn, you know, weekend features reporter.

• 30:42Ben Gilbert?

  Cockatoo birthday party reporter there is.

• 30:43David Rosenthal?

  Exactly.

• 30:44Ben Gilbert?

  Yeah.

• 30:45David Rosenthal?

  Like, you know, this, and the seeds of the Oprah Winfrey show are sown right there.

• 30:51David Rosenthal?

  You know, we're joking, but, but kind of true. She does that for a couple of years and then gets the next big break when the station decides that they're gonna start doing a morning talk show after the news. They're inspired by Phil Donahue, who's been around for many years at this point, but is taking off. So Phil is from Ohio, he's from Cleveland, actually, originally is where he started. Then he had moved to Chicago to a big market doing his talk show in Chicago. It started getting national syndication and it becomes a major phenomenon, like this whole new category, you know, used to be.

• 31:28Ben Gilbert?

  The daytime talk show. That was not a thing until.

• 31:30David Rosenthal?

  It was not a thing. It was like, so what it used to be before Donahue was you had the morning news and then during the day you had just all, you know, syndicated like Wheel of Fortune, like game shows. Donahue has this great quote in, in the WBZ podcast with Jen White. I can't remember exactly what he says, but it's like, you know, he's kind of making fun of it. He's like, you know, it was all like, come on down and click, click, click. And, you know, whoop de doo. Like that was.

• 31:57Ben Gilbert?

  Give it a spin.

• 31:58David Rosenthal?

  Give it, yeah, exactly. That was, that was daytime TV. So he introduces this, this talk show format and people love it.

• 32:05Ben Gilbert?

  And we should say, these, these daytime TV syndicated game shows had massive audience. Like those things were cash cows when they got syndicated. And I think at this time it was Wheel of Fortune, but not yet Jeopardy, if I'm remembering right. And like, those were huge syndication deals.

• 32:23David Rosenthal?

  Totally. And I can't remember when the Price is Right started, but.

• 32:27Ben Gilbert?

  Right around that time.

• 32:27David Rosenthal?

  That kind of stuff. But I think it was, it wasn't that this stuff was like that compelling. It was just the like, a lot of people, particularly suburban housewives, watched TV during the day. They were gonna watch whatever was on. This was what was on. It wasn't that it was good. And so when Donahue shows up and they're like, oh, wow, this is like, actually speaking to us. This is, this is good. We'll watch this instead.

• 32:49Ben Gilbert?

  And a thing you just said there, David, I think is really important to drill home for everyone. Like, we live in a pretty male dominated work culture in society now. Then, you know, in the seventies, like. Basically dad went to work and mom stayed home and and like daytime TV was for mom to watch whatever mom was gonna watch. That's like a really important thing to understand about the sort of kindling that was there for this this fire that Oprah would create.

• 33:18David Rosenthal?

  Totally. Well, I think what's super interesting to pull forward a bit is that was true, but also there were a lot of jobs. There were a lot of places that were workplaces where there were men and women that had TVs on during the day. Like, think about like, you know, the auto mechanic shop or like, you know, anyway, you name it, a 7-Eleven. Like, I remember not too much after this time, you know, when I was growing up and I was a little kid, my parents were both lawyers. They had their own firm in Westchester, Pennsylvania. And during the summers, they'd just bring me along to the firm, stick me in the back office with a TV and be like, you know, entertain yourself. What would I do? I watched Oprah all day, like, and Phil.

• 34:02Ben Gilbert?

  No way, really?

• 34:04David Rosenthal?

  Well, yeah, I mean, like, the TV, you know, now we all have our cell phones and, you know.

• 34:09Ben Gilbert?

  That's what, like, the mid 90s?

• 34:11David Rosenthal?

  Yeah, this would have been, no, this would have been even earlier, like, late 80s, early 90s.

• 34:16Ben Gilbert?

  Dude, that's so funny. I was gonna say, aside from our story, but I was gonna say, I've never actually watched an episode of Oprah. Like, I've watched a bunch to prep for this episode, but before this, like, the things I knew about Oprah are like, through my grandma, because she was a huge, I think my grandma may have watched every episode, or through headlines and like, through the things you know about Oprah because they were major pop culture moments. But like, I feel like we have way more credibility now that you've actually grown up watching the show.

• 34:45David Rosenthal?

  I grew up watching a lot of Oprah in the summers and all these shows, Maury, you know, like, but I think that was the point was that, like, to again, pull forward to influencers and what would this would become with YouTube and the internet and TikTok and everything is like, everybody wants to watch something during the day, no matter what you're doing.

• 35:04Ben Gilbert?

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• 35:18David Rosenthal?

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• 35:32Ben Gilbert?

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• 35:42David Rosenthal?

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• 36:16David Rosenthal?

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• 36:33Ben Gilbert?

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• 36:42David Rosenthal?

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• 36:53Ben Gilbert?

  So what was Donahue doing? What was his shtick?

• 36:55David Rosenthal?

  So that's what, so what Donahue was doing was covering subjects in a talk show format, an interview talk show format, that were he and his producers, who are mostly women, thought would be appealing to suburban housewives. So unlike a game show or something like that, what they really tried to do Always think like, okay, well, like, what is on these folks' minds? And what would they like to hear about? What kind of questions would they ask if they were asking the guests these questions? And then they would put these folks in the audience. And then he would go around with a microphone. This is, he was the first one to do this in the audience and be like, you, you know, audience member asked the question. What do you think?

• 37:32Ben Gilbert?

  And he would have celebrity guests on, right?

• 37:34David Rosenthal?

  Yep, totally. Well, celebrity guests and I think he had the first, I believe this is right. I think he had the first openly gay person on TV to like, talk about being gay. You know, this is like, we're talking, this happened in the 60s. So this is the kind of stuff that he was doing, just like human interest type stories in addition to celebrities.

• 37:55Ben Gilbert?

  And this genre kind of evolved like out of morning news, right? Like Donahue, Donahue Show was an AM, like a 10 AM or 11 AM show, right?

• 38:04David Rosenthal?

  Yep, it was to follow the news.

• 38:06Ben Gilbert?

  Got it.

• 38:07David Rosenthal?

  So the idea was, you know, again, we're in 60s America, like dad goes to work. Kids go to school. Mom is now watching TV. That was the, that was the idea for Donahue. So anyway, it took off in Baltimore. They, the station decides, hey, we should, we should also, lots of local stations were saying, we need our own morning talk show. So they started, decided to start a show called People Are Talking.

• 38:31Ben Gilbert?

  Which is an amazing name for a talk show. Like I had somebody bring that back.

• 38:35David Rosenthal?

  Totally. That should be like, that should be like a YouTube TikTok channel, like People Are Talking. And so they tap Oprah to, like, they have the perfect host there. They tap Oprah to host it. Amazingly, Oprah initially doesn't want to do it because remember like the evening news slot, anchoring the evening news, that is like, that is being, that is what being a star means. That's the like, the definition of the top. And she's like, what is this? I don't know, daytime TV?

• 39:01Ben Gilbert?

  You guys already shoved me over to the covering zoos. Like, I don't know, what are you putting me on now?

• 39:05David Rosenthal?

  Trying to, you know, push me even lower on the totem pole. But they convince her to do it. So she does it. And like, she does the first show and she's like, oh. I was born to do this. This is great and people love it. And so within, you know, months, weeks, People Are Talking becomes bigger than Donahue in Baltimore. So it's only, it's only local. It's not syndicated yet. It's just in the Baltimore market, but it's competing same time slot as the Donahue Show and she's beating him. He's the king of, king of morning talk. And so eventually like, you know, this starts to get notice in, in the media world and eventually People Are Talking gets a deal for national syndication.

• 39:47David Rosenthal?

  And the idea is it's gonna go up and compete against Donahue, but it only gets into 17 markets and it kind of flops nationally. I don't know exactly why. I don't know if it was maybe like too parochial to Baltimore or just what, but it doesn't work and the syndication deal gets canceled.

• 40:03Ben Gilbert?

  So help us understand, like, what is a syndication deal? What does that mean? How do you, how do you get syndicated to other markets? What companies are involved? What economics look like?

• 40:14David Rosenthal?

  Yeah. The biggest syndicator at this point in time is a company called King World. And I don't know if People Are Talking was syndicated through King World or, or another company, but basically these groups of which King World is the largest are just media rights distribution companies. So they would go around, pick up shows, which all shows at this point in time were being produced locally by local TV stations in any given market around the country, pick up shows that they thought had potential and then do a licensing deal with them to then re-syndicate those shows out to other local TV stations around the country.

• 40:51Ben Gilbert?

  And that's even like the way it would have worked for like a game show. Like they would develop the game show at a local station for a local market and then a syndicator would come and say, hey, we think this has national appeal and they would go get it in all the other markets, even though you're still making it there in Baltimore or Chicago or wherever.

• 41:06David Rosenthal?

  Yep. And so King World had Wheel of Fortune, they had Jeopardy, you know, all these shows. Now, what's interesting is, is um, This seems so crazy today. I didn't even realize this growing up, but you think of your local TV station, like, you know, I don't know, in Philadelphia where I was growing up, it was, uh, the Channel 3 was the CBS affiliate. You think of it as like, oh, there's CBS, there's ABC, there's NBC, the big broadcast networks. Those stations are independent businesses. They affiliate with the big broadcast networks, but that's really essentially only for primetime TV, you know, kinda 7:00 PM to 10:00 PM.

• 41:46Ben Gilbert?

  20 hours a day. Yeah, they're, they're, they're producing all their own stuff.

• 41:50David Rosenthal?

  They're an independent business. And so to fill a lot of those hours, they'd work with these syndicators like King World to bring in syndicated shows. So all this is happening outside of ABC, NBC, CBS, you know, they don't really care what their affiliates are doing during the rest of the non-prime time hours. And all that business is separate.

• 42:09Ben Gilbert?

  Yeah. And the interesting thing about these syndicators too, that I didn't really realize is since they're, they're getting to participate in the upside of the success. So at least the way all their deals tend to start, or at least at this time tended to start, was either in a rev share or profit sharing deal. So they would come to you, they would say, um, right now you're only getting to address Baltimore. Do you want, we think you could play in these 17 markets. Um, we're going to take some cut. And I think the cuts very wildly. So I don't, I can't describe the prototypical deal, but we're going to take some cut of the ad dollars that come in from whatever those TV networks in Houston and Phoenix and Cleveland are able to sort of generate. And then we're going to give

• 42:52Ben Gilbert?

  the rest to you. And for a station who owns the rights to a show, you're like, great, it's all upside. Like anything additionally you can get is, is new marginal revenue, doesn't cost me anything. Take whatever percentage you feel you need. And of course, it's not that, that cordial, but you can see why there's these revenue share or profit share agreements that sort of get worked out to do that. So being a syndicator, if you get a hit, can be enormously lucrative.

• 43:18David Rosenthal?

  Yeah. I mean, I think it's, Ben, you may know the-

• 43:22David Rosenthal?

  Detailed economics of these types of arrangements is better than me, but I think it's kind of inspired by and very similar to like the book publishing industry, another industry we're going to bring up in a minute, where you know, author writes a book, that's a fixed cost investment on the part of the author. In this case, it's, you know, local TV station produces a show, produces the content, that's fixed cost investment. And then you work with a publisher to distribute that around the country or the world. And then you share some portion of the revenue from that.

• 43:52Ben Gilbert?

  Yep. And much like the book publishing industry, syndication sort of evolves into a guaranteed advance or guaranteed upfront, where they say, look, we think this thing is going to do so well, we're going to give you a big chunk of that upfront. And then when you're, you know, when the number sort of hits the part that we've already given you, when then you'll sort of get to participate in this percent of the revenue above that. And so it can start to look really lucrative for you as a creator, because the syndicator will fund the creation of your show on an ongoing basis. And so you can sort of see already the incentives of a syndicator are to lock in a deal as long as possible at

• 44:33Ben Gilbert?

  the most favorable economics. And the incentives of a creator are either to get as much upfront as possible in sort of an advance, or to make the deal as short as possible. So that if it, if you start to get leverage by being really popular, then you can go back to your syndicator and go, you need me more than I need you.

• 44:52David Rosenthal?

  Yeah.

• 44:52Ben Gilbert?

  And we'll see how that

• 44:53David Rosenthal?

  Well, and

• 44:54Ben Gilbert?

  sort of plays out.

• 44:55David Rosenthal?

  Specifically keep the rights to your content. So that'll come in one sec. So, okay, all this is going on, even though people are talking fails on national syndication, you know, Oprah's still a big star in Baltimore. Then in 1983 is when the big, big, big break comes. So, one of the producers on, at the station in Baltimore and on People Are Talking is a woman named, was a woman named Debbie DeMaio. And Debbie had moved to Chicago a little bit earlier and joined the local ABC affiliate in Chicago, WLS, which was owned by Capital City. Which will make all longtime acquired listeners and Capital Allocation fans smile.

• 45:36Ben Gilbert?

  Oh, yeah.

• 45:37David Rosenthal?

  And so Debbie's a producer now.

• 45:38Ben Gilbert?

  If you're digging these 70s TV references, go listen to ESPN episode because I think we probably did a much deeper dive on how the industry dynamics of that worked then.

• 45:46David Rosenthal?

  Yep. Debbie's now working at WLS in Chicago and they have their own morning talk show, AM Chicago. And one of the co-hosts, they have two co-hosts, one of the co-hosts leaves and Debbie goes to her boss and says, you gotta get Oprah out here. Like Oprah's ready for a bigger stage. Oprah's gonna be the perfect show. She's gonna be perfect for Chicago. We gotta lure her away from Baltimore. So at the time, the station had a new boss, who was Debbie's boss, a man named Dennis Swanson. He was there because WLS had been kinda in the dumps. It was like, I think it was lowest among all the local affiliates

• 46:29David Rosenthal?

  in ratings in Chicago. And he had been installed by Capital Cities, which owned the station, to fix it. And of course, Capital Cities is run by Tom Murphy and Dan Burke, master capital allocators. Warren Buffett calls them the greatest, greatest operating duo of all time, I think.

• 46:48Ben Gilbert?

  Yeah. And famously very decentralized. So install someone, let them run the TV station. We'll get out of their way.

• 46:55David Rosenthal?

  Yep. Okay. So Dennis is new. He's there to fix it. And he says, you know, he hears Debbie's pitch. He says, okay, great. Like, let's get her out here. Let's, let's do, let's, let's, we'll set up, we'll do a trial run. We'll bring her on the set of AM Chicago. I'll watch her, we'll watch her do a show and, and we'll see. So she flies out.

• 47:13Ben Gilbert?

  I think it's like on a Saturday, right? Like they're like, we're just gonna pretend that it's a real episode, but like it's, it's not going anywhere. It's, we're just gonna watch it inside the studio.

• 47:21David Rosenthal?

  Yeah, it's a mock, mock episode. Yep. So she flies out, she does it and Swanson's blown away. He's like, okay, this is, not only is Oprah an amazing talent, but he's like, this is the key. Now, remember, Donahue is, is the OG, you know, the king of morning talk. He's recording in Chicago at WGN is his, where he's producing Donahue and then being syndicated nationally. So he's, he's there across the street. And he's like, this is how we're gonna be Donahue. We're not gonna out Donahue, Donahue. We're gonna zig where he's zagging. We're gonna bring in Oprah. We're gonna bring in a black woman to host this. Immediately he takes, he takes Oprah upstairs to his office after the mock show and he says, He offers her the job on the spot, $200,000 salary, way more than she's making in Baltimore.

• 48:04David Rosenthal?

  Says, you gotta do it. I want you to, I want you to start now. And famously Oprah says, well, do you have any concerns? Dennis says, no. She says, you know, I'm black. And Dennis says, yeah, I can see that. And then she says, and you know, I'm overweight. And Dennis says, so am I, and so are many Americans. If we do this, I don't want you to change a thing. No makeover, no diet, no new hairdo. Like you are America. Like that's the, that's the whole point. So she's like, oh, okay. So she signs the deal. Dennis calls up the Capital Cities brass and they're like, you sure about this one? And he's like, no, no, no, trust me, this is gonna work.

• 48:44Ben Gilbert?

  You know, your job is on the line too, with these decisions you make.

• 48:47David Rosenthal?

  Yep, yep. Remember, he's like, he was there specifically to fix the station. And he says, no, no, no, trust me, this is gonna work. And of course it does. So Oprah makes the move out to Chicago and they debut the show in January 1984. It is instant success, like literally instant overnight.

• 49:07Ben Gilbert?

  This is AM Chicago is the show?

• 49:09David Rosenthal?

  AM Chicago is the show. The whole station on the back of this new revitalized AM Chicago with Oprah hosting it, goes from last in the market to first in the market. Half of Chicago, literally half of the residents of Chicago, start watching AM Chicago every day. So not just women, like, like half of the city. And remember, Donahue is recording in the same city. So she's completely destroying Donahue in his hometown.

• 49:34Ben Gilbert?

  Yeah, it was one thing to out Donahue, Donahue only in Baltimore. But I mean, to be scoped to one local market and be Donahue's market and out Donahue, Donahue, that's a big deal.

• 49:43David Rosenthal?

  Huge, huge deal. So a couple of things happen on the back of this. One, Tom and Dan in Capital Cities are like, Dennis, job well done. We are gonna promote you. Gets promoted up to ABC because Capital Cities had acquired ABC at this point. Minnow Swallows Whale was the headline that we talked about on the ESPN episode. We're gonna promote you up to, to ABC, to the national broadcasting part of the business. You're gonna run a big chunk of that. He ends up running ABC Sports where he inherits as a direct report. Bob Iger.

• 50:15Ben Gilbert?

  No way.

• 50:17David Rosenthal?

  Yup, yup.

• 50:18Ben Gilbert?

  Oh, that's awesome.

• 50:19David Rosenthal?

  Isn't that awesome? And Bob writes in Ride of a Lifetime that at first when Dennis came, so Dennis was like this outsider from like this local affiliate guy.

• 50:30Ben Gilbert?

  This is the same Dennis.

• 50:30David Rosenthal?

  Same Dennis. So he comes in, Bob had been working in ABC Sports under Ruud Nourlege. Dennis comes in and Bob's like super scared. Bob actually is about to leave. He gets a job offer to go join a talent agency. He's gonna leave, quit Capital Cities and ABC. And then he meets with Dennis and Dennis is like, don't do that. Like, I'm gonna promote you. And so Dennis then promotes Bob to take over all of ABC Entertainment. He moves out to Hollywood. Then he becomes COO of all of Cap Cities. And then, of course, the Disney merger and, you know, all of that Ride of a Lifetime.

• 51:05Ben Gilbert?

  Man, Dennis has the magic touch.

• 51:07David Rosenthal?

  Totally.

• 51:07Ben Gilbert?

  Or I suppose like the, he's a good picker. He's probably the better way to go.

• 51:11David Rosenthal?

  He's a good identifier of talent. That is for sure. Yeah, like literally Bob was about to quit Cap Cities and go have this whole different life until, until he met Dennis.

• 51:21Ben Gilbert?

  It's also, here's another good tech theme. Like, let's pivot away from Iger for a second and back to Oprah. Like, what a contrarian bet to bet on Oprah. It takes probably a lot of guts. He promoted a super underrepresented minority person to take a huge bet and put, I don't know how much of his career on the line, but some amount of his credibility, maybe all of his credibility on the line. And what he was doing there, like, nobody should applaud him for altruism. It was like a self-serving investment. It was a sort of non-consensus bet that he was making and saying, like, by doing something that other people aren't doing here that I think is awesome,

• 52:03Ben Gilbert?

  like, we're all gonna go be super successful. And he was right. And, and like, especially in this moment that we're in now, like, let that be the message that by doing something non-consensus and by zigging where others are zagging, you can be enormously profitable.

• 52:20David Rosenthal?

  Yeah. I mean, this was a, this was such a classic acquired, pull, car is driving towards the cliff, pull the e-brake, spin around. Because like, the station was in the dumps. One approach to fixing it could have been like, okay, well, we're gonna, you know, do operational efficiency, which, you know, Dennis did too. And we're gonna like, step by step, you know, go. But he was like, okay. What's something like a big splash we can make? Here is the king of daytime TV, Phil Donahue across the street. I'm gonna bring in, you know, this super knight. We're gonna be David against Goliath here and like, we're gonna throw-

• 52:52Ben Gilbert?

  Complete on a different playing field.

• 52:53David Rosenthal?

  Complete on a totally different playing field and like he, she and, and they dethroned Donahue in like a week. It's crazy. So the other thing that happens, so Debbie DeMeo becomes, gets promoted to be executive producer of the show. They expand the show from 30 minutes, AM Chicago, to 60 minutes, a full hour. They rename it to the Oprah Winfrey Show.

• 53:14Ben Gilbert?

  Boom.

• 53:15David Rosenthal?

  Let's be, let's be honest about what this is, what the draw is here. Kind of on the back of all this, Oprah says, you know what, I need a, I need a new agent. I need like a real, a real agent here. I forget who her agent was before.

• 53:29Ben Gilbert?

  Here's the story here, and this is from a great Forbes article. So WLS had been paying Oprah $230 a year. So she got $230 that first year and then it was gonna go up by $30,000 each year in her four-year contract. And this is from the Forbes story. As she tells it, "She was pleased at first, but then began having second thoughts. Three separate ABC people stopped me to tell me what a great guy my agent was." Winfrey recalls, "And that didn't make sense to me. Why were people going out of their way to praise the fellow? Winfrey's natural skepticism was aroused. She sacked the agent. She replaced him with a Chicago lawyer named Jeffrey Jacobs. I'd heard Jeff is a piranha," she says of her choice. "I like that. Piranha is good."

• 54:11David Rosenthal?

  Oh, boy. I didn't find that. That is amazing.

• 54:14Ben Gilbert?

  It's a great observation. Like, if people who you were just negotiating against are praising your agent, like, you got had.

• 54:23David Rosenthal?

  Yeah. You need a new agent. Oh, man. So great. Well, Jeff, Jeff and Oprah would be business partners for about 20 years. He both negotiates a much, much, much better deal for her and brings her into national syndication and everything. But two things happen in the, in the next year or so that- Completely.

• 54:43Ben Gilbert?

  And where are we? This is 1985?

• 54:45David Rosenthal?

  This is 1984. Here, 1984, 85. And that completely changed Oprah's mindset about what her goals are. So Jeff, when he comes on board, he, he says like, look, I'm, I want to get you a much better deal with, you know, much better salary with, with WLS and all that. And like, you know, great, we'll do, we'll do good. But.

• 55:06Ben Gilbert?

  And he, and he does. It was like a hundred times more. Like he was getting her first year salary in the like 30 million category.

• 55:14David Rosenthal?

  That was once, that was once national syndication started.

• 55:17Ben Gilbert?

  Okay, sorry.

• 55:18David Rosenthal?

  So I think, I don't know exactly what it was with, um, uh, when she was just, when it was just AM Chicago, but certainly more. So he convinces her like, you gotta think about your career, not just like, you don't want to just be talent. Like I can negotiate deals for you as talent, you know, all you want, but that's not interesting. What matters is not how much you make, it's how much you keep. Don't be, he says, this is a quote from him, "Don't be talent for hire. Own yourself. Don't take a salary. Take a piece of the action." So that's, you know, bumping around in Oprah's, Oprah's mind. Then the other big thing that happens in this time is Alice Walker's novel, The Color Purple,

• 55:56David Rosenthal?

  is being made into a huge film event with Steven Spielberg as the director. And he's going through casting and Quincy Jones has signed on to the project as a producer and is doing the music. And Quincy tells Steven, "Hey, you might want to look into this, uh, this rising star, this rising star TV personality in Chicago, who I think would be perfect to play Sophia, uh, in the movie." And so Spielberg meets Oprah, and of course, rest is history there. It's natural to Oprah. Oprah plays Sophia in The Color Purple, nominated for an Academy Award for Best Supporting Actress.

• 56:39David Rosenthal?

  But the thing that happens around all this is Quincy takes Oprah under his wing and introduces her, brings her out to Hollywood, introduces her to all the real power brokers in Hollywood. And she realizes through this, through his advice and seeing all this, that like, the way you get really powerful isn't to be a movie star, it's to own the production. It's to be an owner. And that's the same thing that Jacobs had been effectively telling her. Like, so don't, you know, the new star is like, yeah, yeah, okay, I'm gonna get my star on Hollywood Boulevard, but literally I'm gonna own the boulevard. Like, that's how you make the real money and get the real power.

• 57:14Ben Gilbert?

  And this permeates her thinking for the rest of her life. Like this, now we can sort of see everything set in motion, where everything for Oprah becomes about control, only doing things what she wants, doing things on her terms, doing things that feel authentic to her, never, I mean, we start to wade into a different category here of her obsession and not violating her relationship and her bond with the audience. But it's all sort of tied into this same thing, where now the important thing to her is that she's in the driver's seat, not that she can go make that next, you know, tranche of guaranteed money. You know, it's really about ownership. And it actually reminds me of another episode we did, David, with Recode, when we had Kara Swisher on. You know, Kara talked about how her deal with the Wall Street Journal was, hey, look, we're gonna do all things digital,

• 57:59Ben Gilbert?

  Walt and I, and he's an employee and that's all good, but I'm coming on contract. Walt and I own all things digital. You can contract with us for us to have that be a part of your publication for a period of time. But that's a thing that I own. I don't work for you. It's a, I think, an interesting parallel, because it allowed her then to go and do Recode, and sort of take the band with her and have that control.

• 58:22David Rosenthal?

  You know, this is, this is the path, this is the way you become an entrepreneur in the media world. And it certainly carries much more risk than like a guaranteed

• 58:30Ben Gilbert?

  Absolutely.

• 58:30David Rosenthal?

  salary payment from whatever big media company, but, you know, well, as we'll see with Oprah, I think she's very glad she took this path.

• 58:38Ben Gilbert?

  And not to mention, you need demonstrated success in order to pull this off in your negotiation, because you need the leverage to be able to say like, it's, look, it's frankly, it's worth it for your business to have me, and this is the way in which you get to have me as a part of your publication.

• 58:53David Rosenthal?

  Yeah. So while all this is happening. King World, who you'd remember, people are talking back in Baltimore failed on national syndication. Well, you know, they're, they're not blind to what's happening in Chicago now. So they come to WLS and to Oprah and they say, hey, we're, we're going to take this, we're going to take the Oprah Winfrey Show, national syndicated in a big way, not 17 markets, 138 markets.

• 59:20Ben Gilbert?

  And did she only do the Oprah Winfrey Show for one season in Chicago before King World was like, and time to go national?

• 59:28David Rosenthal?

  The first national show was September 1986. So I think it was two years, two seasons in, I don't know if it was AM Chicago, it was probably maybe one season AM Chicago, then the Oprah Winfrey Show, just in Chicago, and then, and then national. So she actually leaves filming for a week from The Color Purple, tells Spielberg, hey, I gotta go negotiate my national syndication deal. And he's like, oh, okay. And so then it all hits. Like, Color Purple comes out at Christmas 1985. It's huge. Gets 11 Academy Award nominations. Oprah's going on all the, she's going on The Tonight Show, she's getting magazine covers, she's promoting the film, but she's also promoting her, her show, which is about to become a national show. And she

• 1:00:12David Rosenthal?

  starts to realize like, hey, this is a virtuous cycle. So on September 8th, 1990, 1986, the first national show is, is broadcast. Or actually, well, before that, I can't remember if it was before or after, she does an interview with Bill Zeme, which was intended to be for Vanity Fair as part of this like publicity run. And Tina Brown, who was then the editor of Vanity Fair, in what would start a feud between her and Oprah that I think lasts to this day, killed it. The interview ended up appearing in Spy Magazine instead. And in this interview, she said, she said to Bill, she said, I intend to be the richest black woman in America. I

• 1:00:55David Rosenthal?

  intend to be a mogul. So like, she's, the mindset is, has, has taken.

• 1:00:59Ben Gilbert?

  Oh, and I used the word mogul in the intro. I was like, oh, is it fair to call, you know, would she like that? I didn't realize she actually used the word.

• 1:01:05David Rosenthal?

  That's her word. So she's pressing the advantage, September 8th, 1986, first national show, first national Oprah Winfrey show airs in 138 markets. And on the WBZ podcast, I think it's Debbie DeMeo tells the story of they tried to get Don Johnson from Miami Vice as the guest.

• 1:01:25Ben Gilbert?

  Couldn't get him.

• 1:01:26David Rosenthal?

  But couldn't get him was so amazing. If only they had.

• 1:01:30Ben Gilbert?

  Yeah, this is on that, that great podcast that David mentioned at the top of the show. There's a great discussion of sort of the culture of the Oprah Winfrey show at this point. Like, it's effectively four scrappy women in a room coming up with stories, making phone calls, hustling, and like, doing just heroic effort to put together an hour of TV every day. You know, you can imagine what the Oprah Winfrey show turned into, hundreds and hundreds of people and producers and just, you know, massive staff to be able to pull off these, these gambits that they did. And at this point, it was, you know, it was a startup. It was incredibly scrappy. And to be able to, on the one hand, you're like, they're in 138 markets. How can they possibly not get Don Johnson to come on the show? I

• 1:02:15Ben Gilbert?

  mean, they're just hustlers and they, they only have the track record of being a local show before this.

• 1:02:21David Rosenthal?

  Yep. Well, and so here's, this actually is the other piece to the magic that I think then, you know, Oprah had the gift, right? And that got her to this point. And she now has the aim for the mogul mindset. That's the second piece. I think the third piece of the magic that makes Oprah, Oprah and leads to all of this is she didn't get Don Johnson as the guest. Instead, her guest on that first show was an author named Margaret Kent, who'd written a book called How to Marry the Man of Your Choice. And I'm gonna read, or I'm gonna read in a sec, the verbatim Oprah's opening, cold opening to the first national show. But keep in mind, as I'm saying this, like, what Oprah is and like, who she is here and how she's coming across. So she's, this is the opening of the show. I'm Oprah

• 1:03:05David Rosenthal?

  Winfrey, and welcome to the, to the first national Oprah Winfrey show. And yes, screams it's like, you know, the classic Oprah. And she says, there has been, this is the next line, there's been so much hoopla about this premiere. Your show that it's enough to give a girl hives. I mean, I've got them right now under my armpits. One thing I've learned is that no matter how far down you go, and I tell you, I've been down on my knees with the best of you. No matter how low you feel, this show always allows people hopefully to understand the power they have to change their own lives. Now, I don't have a lot of problems in my life. I have to tell you, things are going pretty good for me right now. But two things have bugged me for years. The first, my thighs. The second, my love life.

• 1:03:46David Rosenthal?

  And then she introduces Margaret and like, okay, so just like, think about that, like the WBZ podcast talks about this. The target audience is Suzie. So they identify Suzie as like this mythical.

• 1:03:57Ben Gilbert?

  Also, is this the first persona? Like startups are obsessed with like personas, persona development now. Like they actually named a false audience member Suzie and like had that as a persona that they would like check against.

• 1:04:10David Rosenthal?

  It's like, it's like Amazon where like the empty seat in the room for the customer. It's like the empty seat in the producer's room for Suzie. Like, what does Suzie want to know? Suzie is a suburban mom. And so they're always asking themselves like, what is, who is Suzie? Who are Suzie's friends? What does Suzie relate to? What is Suzie? What are the questions Suzie wants to ask? And like, compare that opening from Oprah to, to Donahue, to the evening news, to anything that's to, you know, the Wheel of Fortune, anything that's on TV right now. Suzie's their friend, like.

• 1:04:40Ben Gilbert?

  It's just so unbelievably authentic. Like it's so different than what you're hearing on TV and that's wildly produced. And any other daytime slot at this point, especially any prime time slot, nobody's talking about hives under their arms or their thighs. Or like, this is like the very first time that the vast majority of viewers are seeing Oprah and they're having this really intimate relationship with her.

• 1:05:01David Rosenthal?

  Yeah. So two years later, in 1988, the highest rated, most watched Oprah show episode in the history of the Oprah Winfrey show happened in 1988. It was not Tom Cruise jumping on the couch. It was not, you've got a car. It was an episode called Diet Dreams where Oprah had lost 67 pounds on a diet. She did it with a. Called Optifast. She talks about it on the show.

• 1:05:30Ben Gilbert?

  Mostly the fasting and when she occasionally did eat, it was Optifast.

• 1:05:34David Rosenthal?

  Yeah, exactly. Super not healthy. We'll talk about all that in a sec. But it was crazy. Like literally 44 million people watched this show. And then the like, the, the big, um, you know, over the top moment in the show was halfway through. She brings out a wagon with 67 pounds of animal fat on it to say like, this is, I was carrying this around. Like, you know, it's, I mean, it's laughable and very problematic in a lot of ways, thinking about it now. But think back like this is this, she was a friend. She was like celebrating like, I just went on this diet. I lost all this weight like.

• 1:06:08Ben Gilbert?

  Right. Here I am in my size 10 jeans. I feel like feeling so good. And I want to celebrate with my friends.

• 1:06:15David Rosenthal?

  Yeah. And 44 million people watched it.

• 1:06:18Ben Gilbert?

  So crazy.

• 1:06:19David Rosenthal?

  So, so crazy. So she starts, you know, they, they start getting letters from people from all.

• 1:06:23Ben Gilbert?

  And by the way, that's a live number. Like, yeah, like let's not, there was no DVR. There was no YouTube. So like 44 million people tuned in during that hour to watch that concurrently.

• 1:06:36David Rosenthal?

  It's like nowadays, like, you know, probably the Tom Cruise jumping on the couch clip has over 44 million views. I would guess on YouTube these days, but like, that's over 15 years. This is 44 million people.

• 1:06:49Ben Gilbert?

  Think about America. What is, what does America have population wise at that point? Maybe like 320 million people.

• 1:06:54David Rosenthal?

  No, like less than 300 at that point.

• 1:06:57Ben Gilbert?

  Yeah. So what is that? Like, uh, one, probably fifth or sixth of the US tuned in to watch that episode simultaneously.

• 1:07:08David Rosenthal?

  Unbelievable.

• 1:07:11Ben Gilbert?

  And like, this isn't the Superbowl. This is a daytime talk show about a woman who lost weight. Like, but, and by 1988, it wasn't just a woman who lost weight. It was our Oprah. Like it was, it was our person and this, this, you know, personal quest that she's been on, that she's sharing with us.

• 1:07:31David Rosenthal?

  Yeah. And I think that's the thing. Like, obviously there's a lot that's problematic and like.

• 1:07:38David Rosenthal?

  Terrible and like gawkyish about that. It's super complicated, but it's real. Like, that's the thing. It's real. And, and that's who Oprah is.

• 1:07:48Ben Gilbert?

  Let's, let's touch on that now, because I think Oprah has some quotes, looking back on this, that are worth mentioning. And the, the top one is, "I actually thought at that time that being thin made me better." And she talks about that she really regrets that. She calls it a mistake. She calls it hard to watch. And she says, "You can see that my ego is on flamboyant display. I've had to pay the price for that moment over and over. And I literally handed the world on a fat wagon platter, the story. This, this, you know, I'm editorializing this really buzzy story of, is she fat? Is she thin? And of course, like, you know, she's a person, so she's gonna, I don't know if struggle with this is the right word, but fluctuate, or, you know, she gains weight, she loses weight.

• 1:08:31Ben Gilbert?

  But the fact that she introduced it in such a big, public way, it's, it's that story that people want to write about in the tabloids over and over and over again, every time her weight changes, you know, she gave them, as she says, on a platter. And it's a tough thing to, to tie sort of your self-worth in, in your physical appearance like that. And I think, you know, that this is young Oprah sort of flexing a little bit, like, "Look what I can do, look how awesome I am." And all power to her for doing something that is incredibly difficult, but like, I think the sort of older, wiser Oprah later looks back and is just clearly so bummed that, that she opened up in that particular way.

• 1:09:11David Rosenthal?

  Yeah.

• 1:09:13David Rosenthal?

  A hundred percent. Let's also be honest, too. I mean, Oprah, as I think we've hopefully described here, is like, an exceedingly, once-in-a-generation sharp media businesswoman. And she certainly knew that by doing this, she was gonna get these ratings. She was gonna get, you know, by handing the media this story. While certainly painful and all that, like she just guaranteed the next 20 years of headlines about Oprah's weight. Again, super terrible and problematic in lots of ways, but Oprah's in the headlines.

• 1:09:46Ben Gilbert?

  She Oprah knows what will play.

• 1:09:48David Rosenthal?

  Yeah. So on the back of that, well, actually it was a little before in 1987, I believe, was the last year of the original contract with King World. I think it was originally a two-year contract, or maybe it was a three-year and it went into 88, but they negotiated in 87. She earns $31 million in royalties and salary from the King World contract in 1987. And that's when she and Jacobs decide, all right, it's time to put the mogul plan into action.

• 1:10:20Ben Gilbert?

  Yeah. Cause I mean, think about when she was just employed by the station. She was making 200K. Then she got, I don't know how much more, but hundreds of thousands of dollars more with a better agent when it was still just the station. The syndication deal, obviously, that's when you get those one, maybe even two orders of magnitude, jump into this 31 million that year from being in 100 and however many markets. So what next?

• 1:10:45David Rosenthal?

  Yeah. So what next is, all right, it's time to own the production. It's time to start a company. It's time to build a studio. So they buy the show from WLS. They buy the Oprah Winfrey show, or at least the rights to it. They negotiate directly with King World. They invest $16 million of Oprah's own money to build a state of the art production studio in Chicago and they're going to produce and they're going to make not only the Oprah Winfrey show, but a lot more media content too. And they're going to sell it.

• 1:11:20Ben Gilbert?

  $16 million of her own money. And this isn't the Oprah we know today that has over $2.5 billion. This is Oprah that for the very first time last year made 30 million, but she just knows the trajectory that she's on. So she's like, you know what? Let's, let's put it all back in. Like let's, let's, let's buy this thing. Let's own this thing. Let's build this thing.

• 1:11:40David Rosenthal?

  So this is when they found Harpo Media. So Harpo, of course, is Oprah, both Oprah backwards and the husband of Sophia's character in, in The Color Purple.

• 1:11:52David Rosenthal?

  And so they found Harpo Media and Oprah owns 80% of it. Jacob's owns 10% and King World gets an equity stake of 10% as well as part of this negotiation. And in doing so, Oprah becomes the first black woman and only the third woman ever to own a production studio. So like, yeah, remember this is the power broker, you know, club of, of the media industry. So the first two before her, the first two women before her were Mary Pickford and Lucille Ball, but both of them, of course, owned their studios with their husbands, you know, Lucy and Ricky. Oprah is the first woman to solely independently doing this, first black woman, period. There's no board, Oprah controls everything. And again, they start pumping out other content.

• 1:12:34David Rosenthal?

  So the first other project besides the Oprah Winfrey Show, it's called The Women of Brewster Place, and it's a made for TV movie. They, they know their audience, right? And so, uh, kind of just like the, you know, Dennis and, um, you know, back in the day, the original like having inkling that this is going to work. They have an inkling that a made for TV movie targeted at women is going to work. They pitch it to the networks, the networks don't want it. They want to air this in prime time on the big broadcast networks. Uh, the networks don't want it. Oprah basically forces ABC, cause she has this relationship with ABC and Cap Cities. I think Bob Iger might've been running ABC Entertainment at this point. So basically forces Bob to, uh, if he was, to take it. They run it kind of like, all right, we're doing this to appease Oprah.

• 1:13:18David Rosenthal?

  It becomes the second highest rated TV movie ever. So like massive, turns out made for TV movie, like, uh, I don't know how many people watch, um, the Hallmark channel, like it's a good idea or the, or own Oprah Winfrey.

• 1:13:30Ben Gilbert?

  Or Lifetime.

• 1:13:31David Rosenthal?

  Or Lifetime, like, yeah, this is a good idea.

• 1:13:34Ben Gilbert?

  And this is, this is the, you know, of the things we're going to keep coming back to for, for Oprah. She's got an eye for what's going to work. Like she knows what will play. She knows her audience. She knows America as an audience and we're going to keep touching on control. We're going to keep touching on, um, her drive to be big, but there's this, she obviously has this gift of how to speak to people, but she has a real gift for just knowing what will land and how big it will be.

• 1:14:04David Rosenthal?

  Yep. So, okay. So this is the first one. So what did, what does she do then to build on that? What, what does she know is going to resonate? So Harpo trademarks the slogan, live your best life. They start selling like notebooks, candles, scented candles with live your best life and you know, sold by Harpo. Like they're getting, you know, it's like the Disney flywheel here, like all within Harpo. This is great. Uh, she writes an autobiography and by all accounts, she actually wrote this autobiography and she had a deal with Knopf, the publishing house to publish it. And then like Oprah's such a genius. She decides at the last minute, oh, she can't publish. It's going to be too painful to my family. And so like what that just generates more media for her than like if she had actually published it is like,

• 1:14:47David Rosenthal?

  it was the most anticipated book of like the century. And then she didn't publish it, which just made the myth even stronger. And so then as a consolation prize, she says to Knopf, okay, well, like I didn't do this, but I'll do a cookbook with you.

• 1:15:04David Rosenthal?

  And um, so she, they publish a book called in the kitchen with Rosie. Rosie was her personal chef. Um, and I'm pretty sure it becomes the fastest and biggest selling cookbook of all time.

• 1:15:16Ben Gilbert?

  Amazing. And it's especially amazing because Oprah's not even like her brand around that point isn't even like, I know food. Like there's no, like it, it just happens to be that.

• 1:15:26David Rosenthal?

  Well, there is the whole diet thing and like, you know, she's had the, I think she has the tie in with Weight Watchers at this point.

• 1:15:33Ben Gilbert?

  Right. Right. Right. But the whole like Rachael Ray relationship hadn't begun yet, right?

• 1:15:37David Rosenthal?

  That hadn't begun yet. Um, so then I think it was one of her producers, Alice McGee comes up with the idea in 1996, a few years later of, well, okay. So this cookbook thing works. And she's always had authors on the show and um, you know, she recommends their books. It leads to like a lot of sales and people used to joke that where Oprah held the book was an indication of what the sales were going to be. If it was in her lap, it was a dud. If it was like at her waist, it was like, okay. If she held it up by her face, that's.

• 1:16:07Ben Gilbert?

  What if she holds it up sort of like a Bible?

• 1:16:08David Rosenthal?

  Yeah, exactly. Well, God, let's not go there. Um, uh, you know, then it was going to be a bestseller. You had to. They had the idea on the show. Well, what if we launch a book club? So in September, 1996, they launched Oprah's Book Club with Toni Morrison's Song of Solomon as the first book. Uh, and the idea is they're going to announce a book, give the audience a month to read it. And then they do an episode with the author. So that year, they are directly responsible and they do special Oprah Book Club additions to the book for $130 million in book sales in literary fiction in 1996, which is many more times sales than the entire genre category had had like in the years before.

• 1:16:51David Rosenthal?

  Just like such a brilliant business idea. So pause. Announcement for the LP program. This is our big reveal. We're going to launch the acquired book club.

• 1:17:02Ben Gilbert?

  Woo.

• 1:17:03David Rosenthal?

  Woo. So it's going to be part of the LP program. The first book is going to be Hamilton Helmer's Seven Powers. Of course, we already have the episode with the author done. It's like doing this episode where you just realized why it's crazy that we haven't done this for acquired.

• 1:17:15Ben Gilbert?

  In fact, we already have a book club channel that we just haven't sort of like used in the Slack for an in an organized way, but you could run a way worse playbook than just copying Oprah over and over and over again in later decades in different modalities.

• 1:17:27David Rosenthal?

  Yeah. Well, we'll talk about that in playbook. But yeah, acquired book club. It's happening. So here is how it's going to work. Ben and I are going to choose a book. Time interval TBD could be every month, could be every six weeks. We're going to work that out as we go along. And then depending on the availability of the author, we are going to do either one or both of an LP episode with the author discussing the book and a LP Zoom discussion with all of you LPs, potentially with the author, if she or he is willing to join us. We are also going to give all LPs access to Ben and my notes on the book. Our notes on Seven Powers are already ready to go as soon as we figure

• 1:18:12David Rosenthal?

  out the right vehicle to get that out to everyone.

• 1:18:15Ben Gilbert?

  Some will be prettier than others.

• 1:18:17David Rosenthal?

  Exactly. Exactly. And then Ben mentioned the book club channel in Slack that has been sitting there for a while. We're going to repurpose that for use of ongoing discussion of our book club books.

• 1:18:31Ben Gilbert?

  Yes, we are very excited to dive in and we are going to borrow from Oprah in more ways than one. So at the beginning of this episode, David mentioned that you have a box underneath your seat. Pick that up and gaze inside. If you have been considering becoming an LP, but haven't yet, well, inside that box, should you sign up, is a copy of Seven Powers by Hamilton Helmer with a little note from David and I. And just want to send that out to new LPs as a thank you and welcome to the book club. And that will be going out to our next 100 LP subscribers. We also know that lots of you have been LPs for a long time. And so we are also going to go back through and pick 100 of our existing LPs to send copies

• 1:19:13Ben Gilbert?

  of the book to as a thank you. So keep an eye out for an email if you're an existing LP or a new LP joining. And if you live in the US, we'll be sending you an actual copy and outside the US, we'll send you a digital copy. So we're excited and we hope you'll join us.

• 1:19:28David Rosenthal?

  Yeah, we hope you will.

• 1:19:30Ben Gilbert?

  All right, listeners. Now is a great time to talk about a new partner of ours here on Acquired, Logora, the agentic operating system that is redefining how the world's best legal teams work.

• 1:19:43David Rosenthal?

  Yep. It's sort of obvious that AI is going to completely change the legal industry. I bet most of you listening have dropped a contract into some sort of AI chatbot out there. Logora took that insight and asked the question, what if you really built something with that power from the ground up for the legal industry?

• 1:20:00Ben Gilbert?

  So the founders did exactly what great founders do, operate with obsessive customer focus. They embedded inside a massive law firm for months. They sat with the lawyers just watching how the work really gets done.

• 1:20:15David Rosenthal?

  And that's how you get features that customers love, like tabular review, where you drop in a folder of hundreds of contracts and it pulls every key term into a grid a lawyer can actually work with. Logora's bet here is interesting. Since it lets each lawyer handle more complexity, any given person can increase the quality of their work and do higher value work. And this means that the pie can grow even as each individual task takes less time.

• 1:20:39Ben Gilbert?

  And they recently launched Logora Agent, offering greater intelligence and performance. The agent lets lawyers set an objective, then it can handle the planning and the execution and delivery of the final product. Legal teams get to maintain full control and transparency since they're still involved where judgment is required.

• 1:20:58David Rosenthal?

  And Legora works where you already work. You can use it within Microsoft Word while redlining or drafting. The early Legora numbers essentially speak for themselves. When they have a head-to-head pilot with their top competitor, they win 70% of the time. Legora now has over 100,000 lawyers on the platform from 1,200 legal teams in 50 countries. And crazily, they went from 1 million to 100 million in ARR in about 18 months.

• 1:21:28Ben Gilbert?

  Truly insane numbers. And that is the real test. Plenty of things demo well, but the question is whether a busy associate actually reaches for it during crunch time, or whether a partner trusts it before going into a conversation with a major client. If your legal team wants to check it out, whether you're a law firm or you're in-house at a company, you can learn more at legora.com/acquired and just tell them that Ben and David sent you.

• 1:21:53David Rosenthal?

  Okay. Back to the regularly scheduled show in progress. The other thing that they launched in 1996, maybe this is future acquired, maybe come Christmas time around Thanksgiving, we'll do this, is Oprah's Favorite Things. Oh my God. So I did not realize, did you know, Ben, that, remember Uggs boots, the furry?

• 1:22:12Ben Gilbert?

  I learned this in the research, that Oprah was the queen maker of that.

• 1:22:16David Rosenthal?

  Oprah made Uggs.

• 1:22:18Ben Gilbert?

  She, like, she had some Uggs, she loved them. And then that year, so by the way, the way that Oprah's Favorite Things work, I think it's the first episode of each season.

• 1:22:28David Rosenthal?

  Was it Oprah's Favorite Things? I think they switched around when they did it. Sometimes they did it around Thanksgiving, right before Christmas shopping. Sometimes it was September with the first episode of the season.

• 1:22:37Ben Gilbert?

  Like, the car thing, the car giveaway was not random. Like, it was part of a series of things that she started where it was like, when I have an idea of a thing that I love, that I want to give to my audience, like pajamas, for example, like, we will, we will just give them to the audience because I want them to enjoy it. And Uggs boots were one of those.

• 1:22:56David Rosenthal?

  Uggs boots, amazing. So we have Oprah to thank.

• 1:22:59Ben Gilbert?

  And for people to understand the impact of that, this got dubbed the Oprah effect, the combination of this and the book club. It's almost like the Steve Jobs reality distortion field. Like the Oprah effect is when Oprah sort of endorses something and then massive sales come out of that. The book club in particular, she did 70 books over the 15 years of, of doing this. So the 15 of the 25 years of the show. In total, there were 55 million copies sold after Oprah recommended it. So, you know, averaging close to a million purchases per book that she recommends. So obviously it would spike it to the top of the New York Times bestseller. Obviously it would make it basically the number one book that year.

• 1:23:43Ben Gilbert?

  You know, most people read a book a year and for a lot of people, like that was just the book that Oprah recommended every year. And so the way they, that a lot of sort of analysts have sort of worked it out is when Oprah decides to endorse something, that increases the number of people who will do that thing by a million.

• 1:24:03David Rosenthal?

  Yeah. The, well, going back to the cookbook with Knopf, they, I don't remember the exact numbers, but the story is they were like, yeah, we're going to print like 50,000 copies or something like, or 100,000 copies. And Oprah's like, that's not enough. That's crazy. And then they're like, well, we, we printed the Julia Talent cookbook and that's only ever sold 300,000 copies or something. You know, Oprah said, yeah, you're going to have to 10x your production on this.

• 1:24:29Ben Gilbert?

  This is as good a place as any to talk about, you know, not only the Oprah effect, but really, really what did her audience look like? And try and contextualize those numbers a little bit. So at this time that we're currently in, in the story, in the early 90s, Oprah would draw 12 to 13 million concurrent viewers every single day to her 4pm show.

• 1:24:51David Rosenthal?

  Astounding. That's like 5% of America at that point in time.

• 1:24:55Ben Gilbert?

  Yeah. And if you look at, over the course of a week, the number of unique viewers who would turn, tune into one of her show would be 40 to 50 million. So her audience, her weekly, effectively weekly active users, or weekly audience, was like 40 to 50 million people. Now, there were spikes where, and we'll talk about this in a moment, but like the, she interviewed Michael Jackson in a very famous interview, the first time he had been interviewed for 14 years. She did it onsite at Neverland Ranch. That actually got 90 million viewers. And at any given time during the broadcast, it was 62 million concurrent.

• 1:25:34David Rosenthal?

  Yeah, which was, I believe it was, it was either the largest or maybe the top-

• 1:25:40Ben Gilbert?

  It's the largest interview in television history.

• 1:25:43David Rosenthal?

  Yeah, but I think it was the largest, it may have been the largest non-Super Bowl television event in history, too.

• 1:25:50Ben Gilbert?

  It's freaking wild. So, the comparison that I want to make here, just to like, really drive this home is, so people talk a lot about like, the incredible amount of attention and users and watches and views on YouTube, or the incredible amount of people who watch esports or video games. Like, let's not even take that weekly viewer number of 40 to 50, and just look at the sort of like, concurrence on a single show on an average weekday at 4pm. So like, 13 million people. The largest concurrent number on Twitch ever has been when Drake and Ninja played Fortnite, and that was 700,000 concurrent.

• 1:26:35Ben Gilbert?

  So, there was like, this perfect moment in history where the internet wasn't a thing yet, so you didn't have the massive sort of fragmentation of all the different creators who would rise up that you could watch. So there was a very constrained set of who the creators were. Oprah had this really magical personality and this really magical ability to relate with the audience, and the way that, we were in this syndication era, so you actually could reach a national audience. It was like, she shot the gap, she had the right talent, and she shot the gap where there was a constrained set of creators, but you could reach a national audience and just had way more influence and way more sort of ability to gather people concurrently than, on a

• 1:27:20Ben Gilbert?

  regular basis than anyone would ever have ever again.

• 1:27:23David Rosenthal?

  It is, it's amazing today for influencers, media properties and everything. In many ways, it's so much better. There's so many more opportunities. There's Twitch, there's YouTube, there's TikTok, there's Twitter, there's podcasts, there's everything. There's blogs, there's email newsletters. Oprah only had appointment television, but because of that, there's also such a cacophony of content out there. Oprah had this moment where she had the stage, basically, all to herself. I mean, yeah, there was Jerry Springer, and there was Donahue, and all the, but like, you know- Okay, she had a handful of maybe competitors, many of which she ended up co-opting and you know, we'll get into in a sec. Dr. Phil, Rachel Ray, Dr. Oz, these all become-

• 1:28:05Ben Gilbert?

  Harpo Productions.

• 1:28:06David Rosenthal?

  Yeah.

• 1:28:08Ben Gilbert?

  There's no one thing that you can attribute it to, but certainly a driving factor in what helped was the fact that what she valued over anything else was authenticity and the trust with her audience. And so she would never do anything that she felt would violate her code, or what she felt like people would want to watch on an enduring basis. She would never wade too far into the waters of the sort of trashy TV. Even though it could bring immediate ratings, she felt like that wasn't the thing for the 25-year friendship that she wanted to have with frankly, the women of America. And that, that ability to constantly

• 1:28:49Ben Gilbert?

  say no, there's this wonderful David Carr article in the New York Times, you know, rest in peace, David Carr, "A Triumph of Avoiding the Traps." And it's really about how it's all the things that Oprah didn't do and the things she said no to and the way she stayed sort of true to herself and true to her audience that, that really let her keep that for so long.

• 1:29:10David Rosenthal?

  Yeah. So in 1999, a couple of things happened, 1999, 2000. Oprah renews, it's time, it's up for renegotiation renewal for Harpo and the, and the King World deal. They renew it for 130 million a year, or what works out to 130 million a year within the, in the revenue sharing. Plus now Harpo gets equity in King World. Remember, King World got equity in Harpo originally. Harpo gets equity in King World as part of this deal. That year, later that year, CBS acquires King World for $2.5 billion. Oprah and Harpo make $100 million on that deal in months. And that, I wonder if it was actually with

• 1:29:51David Rosenthal?

  that capital that she then started buying and bringing in other shows into the Harpo network. So Rachel Ray, Dr. Phil, Dr. Oz, many of which she had kind of made them originally as guests on Oprah's show. They bring and start producing- Those shows and owning them as part of Harpo. And then the next big thing is it launches in 2000. They partner with Hearst and they launch Oh Magazine, becomes the largest, most successful magazine launch in history. 2.5 million copy circulation right off the bat, brings in $140 million in circulation plus advertising revenue in the first year. The empire just keeps on growing. A couple of years later, she does deal with Sirius XM, getting back to the radio roots,

• 1:30:36David Rosenthal?

  does a three-year, $55 million contract to bring Oprah and Friends as a channel on Sirius XM. That was the next piece of the empire.

• 1:30:46Ben Gilbert?

  This is, in large part, this is harvesting. She can't build a bigger audience unless she goes global or unless, you know, she decides that we want to start bringing more, frankly, more men into the percentage of people who are watching my show all the time. Like, she already addresses the women and some of the men of America. And so, at this point, it's about harvesting that audience. And what you can basically do is see her for a long time say, nope, my show is the only way that I reach people. And then her realizing, oh, people will pay me for little pieces of all this stuff. And I can carve off, well, Oprah and Friends is a thing, but it's only audio and it's a different type of content. And, you know, you start to see this sort of like, what deals can I cut in what different ways

• 1:31:31Ben Gilbert?

  across what channel to reach what segments of my audience?

• 1:31:34David Rosenthal?

  And what different media rights can I own and monetize those? So the, we can't not talk about this too. The other thing in the mid 2000s that she just nails is like, she just reaches the apex of her powers as the like celebrity confessional. And we got to talk about 2005, Tom Cruise, Katie Holmes.

• 1:31:55Ben Gilbert?

  You seem really just overcome with love.

• 1:32:01Ben Gilbert?

  This is a whole new Tom. This is a different Tom.

• 1:32:03David Rosenthal?

  Yeah. Oh, man. Amazing. So fun to watch on YouTube. But that's actually, again, Oprah to kind of be in, I don't know how much this was intentional, but this kind of stuff that she starts doing on the show, it's perfect for the internet. The old shows were like, it was the whole show. It was the buildup to the wagon of fat, you know, all that kind of stuff. But now it's like, you get these moments, get these clips, and then they're gonna be posted and reshared and reposted on the internet.

• 1:32:28Ben Gilbert?

  The rise of Oprah and the dominance of Oprah couldn't have, and fortunately for her, didn't happen in the internet world. But she did adapt to the internet world very well, particularly with all these different sort of media rights and her later launching Oprah.com and some more stuff we'll talk about. But the way that she changed the content, I think, is exactly as you point out, David, just perfect for these shorter YouTube clips. And hasn't gotten as short as TikTok yet, but the, like the older episodes, it would be a whole, like, her most buzzy shows would be a whole hour-long narrative arc. So the fat wagon, or when she literally moved her show to that terrible racist county, where she actually relocated the whole show and did an hour-long show with an audience

• 1:33:13Ben Gilbert?

  of mostly white supremacists, who were like, explaining to her why they needed to be this all-white community. It's an hour of one single topic that's gut-wrenching. She would later have neo-Nazis on the show. I mean, she would have this hour-long block of television that makes you feel a certain way for an hour, that was perfect for then and is not perfect for now. And you're right, this, this Tom Cruise clip, like, I mean, you can even just pick three seconds, wind it back and forth over and over again, turn it into a GIF, and like, that's the content. And I think that, you're right. She's very adaptable.

• 1:33:47David Rosenthal?

  So kind of, you know, on this going out on top, so she decides that the 25th season of the show is gonna be the last, and then she's gonna fully transition into mogul status, and she's working on a big deal, which we'll talk about in a sec. In the second to last season of the show, I think this is best, most perfectly encapsulated with, to kick off the season premiere in the 24th season, they have the Black Eyed Peas come to Chicago, do a big outdoor event. And they do, this is when flash mobs, internet flash mobs were a thing. They do a flash mob dance. They do a special version of I Got a Feeling with new lyrics just for Oprah.

• 1:34:20Ben Gilbert?

  Yeah, like Will.i.am rewrote the lyrics to the song, at least the first verse.

• 1:34:24David Rosenthal?

  Yup. And they get, you know, 20, 30,000 people to come to Miracle Mile in Chicago. They close down the streets. They do this thing. And then everybody does a choreographed flash dance in the middle. And it's like the most perfect three minute YouTube thing you could ever imagine.

• 1:34:40Ben Gilbert?

  We'll link it in the show notes. Oprah doesn't know. It's incredible. She is somehow, they, they told 30,000 people something that in Chicago that Oprah didn't know. And they actually pulled off like shocking her. The most telling quote that she has is, you know, when they do close down the streets of Miracle Mile and everything, she asked one of her producers, are the black eyed peas really big enough to sort of close down, you know, close down the streets of Chicago? And her producers are like, looking back, yeah, I think they are. And it's just because she doesn't actually know what the real reason for closing it down. It's, it's, it's very cool.

• 1:35:19David Rosenthal?

  Well, the irony is, yeah, the black eyed peas maybe. Oprah is definitely big enough to close down the Miracle Mile.

• 1:35:26David Rosenthal?

  So the show ends and it's 25th season in 2010. They do a two-part finale. They have, you know, everybody, everybody who's anybody is part of it. Will Smith, Madonna, Michael Jordan, Tom Hanks, Tom Cruise, of course, is back. Sans, Katie Holmes, I think at this point. And as part of it, Aretha Franklin makes it back. All those years after the hundred dollar bill given out the windows, things amazing grace in the, I think it was, the last episode was just Oprah in the studio, but the second.

• 1:35:57Ben Gilbert?

  The second to last was in the United Center.

• 1:35:58David Rosenthal?

  Yeah. And pretty amazing. So that's the rap on Oprah, the media personality. But the deal she's working on is, so she had been an investor, Harpo had been an investor in the cable network Oxygen Media. That gets sold to NBC Universal in 2007. I assume with some of the proceeds from that, she then does a deal with Discovery in 2008, the Discovery Channel, to turn the Discovery Health Channel, which was struggling, into the Oprah Winfrey Network. And the idea is it's going to be a 50/50 JV. Oprah's, everything she had been, all the assets she'd been contributing to Oxygen, now going to move over, it's going to be her own channel, 50/50 JV with Discovery. And I believe in

• 1:36:40David Rosenthal?

  2017, I think Discovery bought out half of Oprah's stake, so they now own about like 73, 74%, and Harpo owns the rest. The plan is they're going to launch in January 2011 because the King World CBS distribution rights for the Oprah Winfrey Show ran through May 2011. So they're going to launch in January, and then by the second half of the year, they'll be able to be running reruns of the Oprah Winfrey Show, along with Dr. Phil and Rachael Ray and everything. The channel actually struggles for a couple of years after they launch it, but then, you know, again, like Oprah, Harpo, like they're tuned in.

• 1:37:11Ben Gilbert?

  Yeah. And let's talk about the channel struggling, because what that was is, again, pulling forward a playbook thing, but we've talked a lot about this notion of a direct relationship with your audience. Oprah may have been able to reach all those people, but she didn't actually, it's not like she had email addresses or phone numbers for them. They watched channels that she was on. And when she'd moved over to a new channel, like a Joe Rogan, or, you know, a lot of, like, we're seeing it unfold in podcasting now, like, she doesn't necessarily have an ability to reach out to all those people and say, hey, come on over. And so, the first year is very disappointing in the amount of people she can actually reach, because, and I think she has talked about this, she underestimated the power of habit. They were used to turning on ABC at 4:00 PM and just kind of see in her.

• 1:37:52David Rosenthal?

  Channel 6, whatever, yep.

• 1:37:54Ben Gilbert?

  Yeah.

• 1:37:54David Rosenthal?

  Yeah, that's such a good point. I hadn't thought about that. That's such a good point. The other problem is, is, yeah, they've got the Oprah reruns, but there's no new Oprah show, right? Like, there's no reason to tune in. But in 2012, they sign a production deal, Harpo does, with Tyler Perry to bring over some of his existing TV series that he's been working on, and also produce some new TV series for OWN. And

• 1:38:23Ben Gilbert?

  And OWN is the Oprah Winfrey Network.

• 1:38:25David Rosenthal?

  Oprah Winfrey Network, yep, with the rebranded Discovery Health. And that, I think, kind of saves the network. So the haves and the have nots, Tyler Perry's The Haves and the Have Nots, become a huge hit, along with other, other series that both were existing and come over, and new ones are Loving You Is Wrong, The Pains, For Better or Worse. His empire and that kind of content starts, you know, a whole new generation of, of folks watching, uh, watching OWN. This is still starting to play out, but the, uh, the final ultimate media mogul moment, which we're gonna smile and laugh about here, is Oprah makes it onstage at an Apple keynote event.

• 1:39:09David Rosenthal?

  Does

• 1:39:09Ben Gilbert?

  Possibly the worst Apple keynote of all time.

• 1:39:11David Rosenthal?

  Possibly the worst.

• 1:39:12Ben Gilbert?

  What's so, yeah, what's the deal with Apple look like?

• 1:39:15David Rosenthal?

  So it's still sort of playing out. I think it was more of a announcement vaporware than anything else in 2018. But she entered into a, Harper entered into a unique, quote, quote, unique multi-year content partnership with Apple that would consist of, the idea was they're gonna bring back Oprah's Book Club, uh, as part of iBooks.

• 1:39:34Ben Gilbert?

  And is an Oprah's Book Club on Oprah.com now? She has like a smaller version of it that's continued?

• 1:39:39David Rosenthal?

  Yeah, I don't know what ultimately has happened with that. But there are also gonna be Oprah interviews on, on Apple TV Plus. She was gonna conduct interviews, so, um, that has been part of it. I don't think that partnership has played out as, as intended with the

• 1:39:55Ben Gilbert?

  It's been two years, or a year and a half.

• 1:39:57David Rosenthal?

  Yeah.

• 1:39:57Ben Gilbert?

  The, the other thing is like, that, that would have to be a special carve out, because she is under exclusive on-screen, her, her on-screen appearance, I think, and maybe it's only for terrestrial, like

• 1:40:09David Rosenthal?

  Yeah, it must be not, not streaming.

• 1:40:12Ben Gilbert?

  But yeah, she's exclusively on-screen with the Oprah Winfrey Network as part of the Discovery relationship.

• 1:40:20David Rosenthal?

  Yeah.

• 1:40:20Ben Gilbert?

  These days.

• 1:40:21David Rosenthal?

  Yeah. To kind of wrap it up here in the history and facts, you know, Oprah, Oprah achieved her goal. So today Forbes ranks Oprah as the sixth wealthiest black person in the world, the wealthiest black woman, and the 10th wealthiest self-made woman in the world. And the crazy thing is, we'll get into this in a sec, but I, I think the way Forbes values her wealth is dramatically undervaluing her. So I suspect it's actually a lot higher than that.

• 1:40:50Ben Gilbert?

  So there's an interesting thing where in 2009, it was estimated that she was worth 2.3 billion. And it's sort of easy to, to understand how she got there, where she basically had this ramp from making 35 million in 1988, all the way up to making like 200 plus million dollars a year by 2008. And, you know, that was just, every time she got to renegotiate a deal, a little bit more in her favor, her audience continued to grow until it plateaued in the late 90s. But then she sort of got better and better terms each time, all the way until the show ended. And so we can sort of see like, well, it's, it's kind of easy to understand how she slash Harpo accumulated over $2 billion. What's not as clear is, in

• 1:41:30Ben Gilbert?

  all these deals that she's doing now, a lot, almost all of them are, are impossible to know the terms, other than the Discovery deal. And so in the last 10 years, like, you don't really know. And Forbes certainly doesn't know exactly how to estimate Harpo's enterprise value, Oprah's net worth. So we're still sort of in this same mid 2s number that everyone's guessing at.

• 1:41:55David Rosenthal?

  And I think the mid 2s, I think, I think we saw in the methodology for Forbes, they said they added up all the after-tax profit cash flow to Oprah that they suspect, that they estimate Oprah had gotten from Harpo over the last, you know, 20, 30 years. Well, that doesn't make any sense. You know, anybody who knows how to value businesses is you value them based on the street discounted stream of future cash flows. So all that to say, there are all these properties now that Harpo has their hands in, including a massive cable network of which they own 25%. Also, in 2015, Weight Watchers, the company, was struggling. Did you find this, Ben?

• 1:42:34Ben Gilbert?

  Yeah. She bought, didn't Oprah buy 10% when the, when it was really struggling at, at nice terms?

• 1:42:42David Rosenthal?

  Like 30 million dollars. Yep.

• 1:42:43Ben Gilbert?

  But then she was like, oh, I'm going to be a brand ambassador. And so then, in large part, due to her becoming a brand ambassador, like her leveraging herself, she like massively grew the value of that company.

• 1:42:54David Rosenthal?

  Massively. It's estimated to be worth about half a billion dollars now, that stake alone that she paid $30 million four or five years ago. We don't have the time to do the investment banking style, some of the parts, valuation analysis on Harpo and the Oprah empire, but there's no way that it's only two and a half billion dollars. It's way more than that. I mean, imagine if like, you know, let's just think back to our, I think this episode belongs in the whole broadly affiliated Disney saga because of all the ABC and Cap Cities connections here. But when we were talking about, you know, the Marvel deal, the Lucasfilm deal, the Pixar deal, all these companies that Disney bought, if Disney were to buy Harpo, and that is not a crazy idea that Disney should buy

• 1:43:37David Rosenthal?

  Harpo at some point, especially as Oprah, you know, becomes older, there's no way with all the assets, I mean, think about what they paid for, let's just take Lucasfilm, right? They bought Lucasfilm, which was essentially the Star Wars franchise, the Indiana Jones franchise and ILM for-

• 1:43:52Ben Gilbert?

  And no new films in development.

• 1:43:54David Rosenthal?

  Yeah, no new films in development.

• 1:43:55Ben Gilbert?

  Yeah.

• 1:43:56David Rosenthal?

  For three, was it like 3.6 that deal billion?

• 1:44:00Ben Gilbert?

  Something like that.

• 1:44:01David Rosenthal?

  Something like that. Now, look at Harpo, right? You've got all the library of these rights to all of these shows, right? Like, now imagine Disney Plus, like, how valuable is the entire library of the Oprah Winfrey-

• 1:44:13Ben Gilbert?

  Oh, I hadn't thought about that.

• 1:44:15David Rosenthal?

  Not to mention Dr. Phil, Dr. Oz, Rachel Ray, all this stuff.

• 1:44:18Ben Gilbert?

  Is it all on YouTube right now, like all the old Oprah shows?

• 1:44:21David Rosenthal?

  I don't know.

• 1:44:23Ben Gilbert?

  Would anybody watch, what's the back catalog of the Oprah Winfrey show worth? That's a good question.

• 1:44:28David Rosenthal?

  I mean, like, clearly, the back catalog of something like Friends is worth a lot these days. Now, that's a sitcom, not a talk show, but like, I think a lot of people would like to watch the back catalog.

• 1:44:38Ben Gilbert?

  There's at least 30 or 40 episodes that must still get a lot of views.

• 1:44:42David Rosenthal?

  Yeah. And then there's all the streaming rights and YouTube rights and everything associated with that. Then you've got like stuff like Oh, the Magazine and all that stuff. Then you've got all the new content that Harpo is producing, like Tyler Perry's content out there. Then you've got the stake in the cable network itself, which is extremely valuable. Yeah, like this is a, this is a many billions more than two and a half billion dollar deal if Disney or somebody else comes along and buys Harpo.

• 1:45:13Ben Gilbert?

  Yeah, some other interesting, as we tie up our sort of history and facts here, Oprah by the numbers stats here, the, over the 25 seasons, they, the show received over 20 million letters. So like lots of different ways to gauge fandom here, but like 20 million, and they're not, you know, this is like page views, not unique users, but like 20 million times people were strong enough fans to write a letter in. Like, an interesting way to think about this is like, if her reach was 50 million people, you sort of assume like, I don't know, 1% or 2% of your fans could be super fans. I think a lot more than 1% or 2% of her reach were super fans.

• 1:45:55David Rosenthal?

  Yeah. I mean, 20 million YouTube comments would be a lot. Imagine like the barrier to actually like writing a letter and mailing it. Like, yeah.

• 1:46:07Ben Gilbert?

  Yeah, it's crazy. I guess the point that I want to drive home here is, yeah, she had reach, but like, she had really intense, intense fandom at that point, and still today. The other place I want to take this that we didn't touch in history and facts, and I just want to plant a little seed with people. So Oprah, based on her ability to compel people, you know, not through strong, you know, I need you to go do this, but just by saying it's what she's doing. If she says, I'm reading this book and I think it's good, and a million people go read the book, or, you know, I'm wearing these pajamas and I think they're good, and a million people go buy the pajamas. Well, she at some point said, you know, this person Barack Obama is truly inspiring to me. There are many

• 1:46:52Ben Gilbert?

  Search analysts who say that he got a million votes in a very tight election that can be credited to Oprah. And there's a whole story that we don't have time to go into around Oprah, you know, not wanting to be political and not wanting to have either candidate on the show. From the, the 2008 election, but you know, her early friendship, long before he was running for president with Barack Obama, definitely led to a lot of people feeling strongly about him that otherwise wouldn't have.

• 1:47:20David Rosenthal?

  That, well, that is a whole nother podcast worth of content for another show than us to do, but, but just as an example, that a small one. Oprah had never had political guests on her show before the 2000 election and then she had both.

• 1:47:33Ben Gilbert?

  In which case she gave equal airtime. One episode did, Bush and Gore.

• 1:47:37David Rosenthal?

  One episode to Bush and Gore. Before those episodes, Gore was leading Bush by 10 points in the polls. And they came on, Gore did like, fine, was kind of stiff. Bush comes on and he like gives Oprah a big kiss. He gives Pralines to like the whole audience. Like he, he crushed it. Like he did great. 11 point swing. Bush goes from 10 points behind in the national polls to one point ahead. Just on the back of the Oprah appearance.

• 1:48:05Ben Gilbert?

  Pretty amazing.

• 1:48:05David Rosenthal?

  Yeah. All right. Let's move into analysis.

• 1:48:08Ben Gilbert?

  As, yeah, as we analyze here, the, the crux of the whole thing that we are going to, cause obviously like this isn't a classic acquired episode where Facebook buys Instagram and we value if that was a good use of capital. The transaction that we're going to analyze here is Oprah spending the 16 million of her own money to buy out the rights to produce her own show and, and own everything outright. Of course, with the 10% for King World and the 10% for Jeffrey Jacobs and what that ultimately turned into. And obviously we're going to be pretty favorable here, but that's how we're going to sort of think about dimensionalizing what we're analyzing.

• 1:48:42David Rosenthal?

  So we talked about kind of rather than doing narratives or acquisition category, since there's no acquisition, but what like category is actually a good one. And maybe specifically a tweak on category in honor of our book club and Hamilton Helmer and seven powers is a little, let's talk about what's, what's the power for Oprah and Harpo? Like what's the defensibility? Maybe especially in this new influencer world that we live in where she's not the only influencer out there.

• 1:49:09Ben Gilbert?

  The question is, would Harpo have the majority of its future economics if not for the relationship between tens of millions of Americans and Oprah that comes from the past? Like, I'm tempted to say that the biggest value driver for Harpo is continuing to monetize a relationship between Oprah the human and a third of America, or a quarter of America. We can talk about sort of what power that fits into, but you have these other properties that aren't Oprah-specific, like Dr. Oz and Dr. Phil and Rachel Ray.

• 1:49:48David Rosenthal?

  But there's still Oprah brand, kind of.

• 1:49:50Ben Gilbert?

  Right. I think the main value driver here is people trusting Oprah and wanting to continue that relationship.

• 1:49:56David Rosenthal?

  Here's an interesting question. Is that relationship with Oprah, because I totally agree with you, that trust, that relationship with the concept of Oprah that so many, not just Americans, but people all around the world have now, does Oprah need to be alive for that to be the case? Like, clearly Walt Disney doesn't need to be alive for, you know...

• 1:50:20Ben Gilbert?

  For me to want to fly to Disneyland several times a year.

• 1:50:23David Rosenthal?

  Right. Now, of course, that's different. Like, Mickey Mouse doesn't die, you know, like that can... So, it's different. It will be interesting, you know, hopefully Oprah will be with us for many, many, many years to come.

• 1:50:34Ben Gilbert?

  Well, let's take mortality out of the equation, and let's just say whether she's in the equation or not. So, like, could she sell Harpo for $5 to $10 billion? And you don't have the rights to me anymore.

• 1:50:47David Rosenthal?

  I'm just gonna be on Promised Land, my ranch in, by the way, Promised Land, I can't resist, in Montecito is one of, if not, probably like, top five or 10 highest valued real estate properties in the world.

• 1:51:03Ben Gilbert?

  Whoa.

• 1:51:04David Rosenthal?

  It has a five-mile-long driveway.

• 1:51:07David Rosenthal?

  It's, uh, yeah, amazing.

• 1:51:10Ben Gilbert?

  You know, who else has a place in Montecito is Jeff Jacobs. I think he has like a $16 million, more modest estate. Nearby.

• 1:51:18David Rosenthal?

  More modest estate. I mean, yeah, understatement of the century. So on that though, I think what's interesting and with what Harpo and Oprah and with OWN and this, the, the discovery deal have done in the last, since ending the show is I actually think it's a lot more viable that the value of Harpo continues without Oprah being actively involved now than that would have been 10 years ago, because let's just look at OWN, the network. You know, it's not really just Oprah's properties that are driving that anymore. It's Tyler Perry's properties that are driving it. Well, I guess that's probably the biggest one. I was going to say, oh, the magazine and there's more in that. I haven't spent enough time with, oh, the magazine to know how much of it is Oprah these days.

• 1:51:59Ben Gilbert?

  Unlike the Oprah Winfrey Show where you did. Yeah, it has good circulation for a magazine, but it's, you know, de minimis relative to like modern internet properties. So I guess what I'm going to say here is if I was to apply a Hamilton Helmer power, I guess it would be a cornered resource where Oprah is the cornered resource. And we'll get to this in grading, but like Harpo is worth a crap ton with Oprah. And I think a lot, lot, lot less without her.

• 1:52:24David Rosenthal?

  Yep. I think that's about you. Interestingly though, I was also going to say cornered resource. I think back pre this era, in the older era of the Oprah Winfrey Show and the early days of Harpo, it was two cornered resources. It was Oprah, but it was also the syndicated distribution deals that were a cornered resource. Cause it's not like, there could have been another Oprah out there. There probably were other people who were just as talented as Oprah. But unlike today where anybody can, you know, turn their selfie camera on. Back then it was such a barrier to entry to have those distribution deals in place that nobody could compete with.

• 1:53:01Ben Gilbert?

  Yeah. And you bring up this other concept too, David of like, and this exists within influencers today, there's a network effect within audience. So there really is a critical mass thing that happens where if you could watch Oprah, that was doing all the exact same things that Oprah was doing, or you could watch someone identical to Oprah that no one's ever heard of and your friends weren't talking about. And other people wouldn't be reading those books and other people wouldn't be buying those products, but still had the same charisma, amazing guests. You just would never watch that one because you want to be a part of the cultural zeitgeist that Oprah is creating. In some ways, it's an audience network effect.

• 1:53:38David Rosenthal?

  The obvious, modern day analogy to all this is the Kardashian empire, right? With the Kardashian West empire now combined. And actually, there's also this kind of federation and the way influencers work today is it's not just one person, it's this like, it's a crew, right? So you got Kim, you got Kanye, you got Kylie, you know, like Kylie's got her cosmetics brand and Kim's now doing a podcast with Spotify. All right, well, we'll talk more about this in playbook and to come. But yeah, I think there's really something to this audience network, but it's now like a federated network across influencers.

• 1:54:14Ben Gilbert?

  That's true. Yeah. Yeah. You have to imagine there's audience overlap between Dr. Phil, Dr. Oz, Rachael Ray, like in the, the different jobs to be done in a shared audience by each of those creators in the same way that, yeah, there's like influencer cadres that each serve a different job to be done for a same person in the audience. And if you can successfully build that, which, you know, you gotta think Oprah's on her way to, but if you can successfully build that, then that's how Oprah can sort of make her exit from it and it retain value on its own. Okay. Let's go to what would have happened otherwise. So like, what if Oprah didn't spend 16 million and kept working for WLS? Like, I mean, first of all, she just,

• 1:55:00Ben Gilbert?

  she might have stayed as important in the cultural zeitgeist, but I think it's telling, this is also in the podcast you referenced at the top of the show, that Oprah felt like she was doing wrong by other people at the station by being so successful. So when she would see people in the elevator and all their shows were fine, but not nationally syndicated, and she was queen of television, it created cultural problems at the station. So like, she talks about how she felt that she needed to bring the Oprah show into its own physical space just to detangle from, you know, all the existing incentives that existed for everyone else in the building. The easy thing to say is, you know, she never would have become the mogul

• 1:55:45Ben Gilbert?

  with the power that she has today. And that's really what she wanted. So she probably wouldn't have felt that she was doing right by herself. But it's also hard to guess what the unintended side effects were of staying in that, in that station.

• 1:56:01David Rosenthal?

  I have to imagine that if we were to ask Oprah this question, it would be like, well, they'll be like, everything is so much better and magnificent. Like, I can't imagine she regrets that decision one iota. But I think a lot of that, though, is just like her own, like you were saying, her own ambition. Like, the alternative universe is she looks like what most movie stars look like is talent, you know? Yeah, maybe they have their own production, quote unquote, production studios, but they're not really like doing the-

• 1:56:29Ben Gilbert?

  They get an executive producer credit for something.

• 1:56:31David Rosenthal?

  Yeah, right. Exactly. That's just like for getting some extra points on, on the deal. Really, they're just talent and not entrepreneurs. Oprah decided to become an entrepreneur.

• 1:56:43Ben Gilbert?

  Yep. That's a great, that's a great way to put it. Okay, playbook. So for folks who are new to the show, in this section, we basically say, look, if someone wanted to do something like this, what's the playbook that they should run? Not to say anybody could duplicate literally anything that we cover on this show, but like, what are the themes that we noticed that led to their ability to pull this off? And David, the first one that obviously comes to mind that we've mentioned three times now on the show is she really was the first influencer, invented a lot of these strategies. And there's a big one that we didn't touch on yet that, that I was shocked in when I did the research. And I shouldn't have been shocked, but I was. And that is the car giveaway, where she gave away, uh, how many of these things?

• 1:57:23David Rosenthal?

  Two hundred and seventy-four or something like that.

• 1:57:25Ben Gilbert?

  Two hundred and seventy-six cars totaling $8 million. And they were Pontiac G6s. I don't know in my head they were now, that's not what they were, but that is what she gave away. I thought this whole like Oprah's giveaways thing is she's so rich, she doesn't need to be rich, she doesn't care about being rich, she loves her audience, so she buys some things. That's not at all what happened.

• 1:57:47David Rosenthal?

  Yeah.

• 1:57:47Ben Gilbert?

  This $8 million that Pontiac, yeah, Pontiac spent all the money. And they were like, this is well worth it for our advertising. Are you kidding me? How many cars? And like, it took, it took us some effort to get them up from 25 cars all the way up to the 276 by their producers. But like, this was Oprah being like, wait a minute, I can give stuff away that other people pay for. And I think like, that is a thing that you see across the whole YouTube ecosystem now of, of sort of sponsored products and-

• 1:58:16David Rosenthal?

  Well, shoot, uh, Marquez just did, um, a sponsored video with Buick, right? Like, where he didn't give the Buick away, but like, he did an unboxing of a Buick, right? And like, uh- Yeah, that's the legacy of Oprah right there.

• 1:58:31Ben Gilbert?

  Right. So I just wanted listeners to know that Oprah didn't actually buy all those Pontiacs.

• 1:58:39Ben Gilbert?

  That Pontiac did it. And, you know, I have to imagine that was a, like, you can buy one Super Bowl ad slot for a million bucks, or you can buy eight and have us all still talking about you get a car, you get a car, you get a car. So legendary ad deal is the way to think about that.

• 1:58:55David Rosenthal?

  And at the end of the day, all those audience members got the cars, you know, like, they still had to pay because it was a gift they'd pay taxes on. It's complicated. But so they could get the net cash, or they could get the car and pay the taxes. Anyway, that's neither here nor there. Okay, for playbook, though, so I think I want to, let's spend a sec and talk about, okay, super clear analogy, as we've talked about all along, between Oprah being the first influencer now into modern influencers, like we just mentioned Marquez and MKBHD and all these YouTubers. And then you've got the Kardashian West empire out there. You've got George Clooney and Casamigos with his tequila brand. Like, well, let's talk about one of the things that are different now. It's different in that you don't need

• 1:59:36David Rosenthal?

  the distribution deals. There's no barrier to entry. You can just throw up a podcast feed. You can throw up a YouTube video. You can jump on TikTok.

• 1:59:45Ben Gilbert?

  You don't have to cut the deals, but you do still need to spend something to get distribution. And it might be spending on honing the content, but you do have, I mean, everybody, even though your stuff's freely available, you have to figure out a way to make it occur to people that they should.

• 2:00:00David Rosenthal?

  That's what I was getting to is like, you can, the gatekeepers are gone, but long live the gatekeepers, right? And the gatekeeper being like, you gotta rise above the noise and create something compelling that's going to get people's attention and be worth watching amongst the sea of all the content out there.

• 2:00:20Ben Gilbert?

  Yeah, the gatekeeper is a lack of scarcity. Like, now that there are no gatekeepers, there's millions of people, hundreds of millions of people creating content. The interesting thing to observe here is for the influencers who do rise above the fray, you see them cutting traditional distribution deals because they say, gosh, I have lots of money. Can I just pay you to distribute my content? And so that when you sort of see the influencers emerging from YouTube and going on to more classic mediums, the ability to sort of buy in bulk and have predictable economics is still, still beneficial.

• 2:00:52David Rosenthal?

  Okay, two, two quick things I want to say. One is what you talked about with cars. I just want to label that as a playbook theme, which is for this type of business, for an influencer business, like monetizing your product recommendations and average, like kind of native advertise. Like this is the first native advertising that happened. And like, that is a great business model for, for this type of business. The other thing about how this has all evolved with the internet is, you know, Ben Thompson has written about this ad nauseam, so we won't belabor the point, but is like Oprah worked and Oprah could be the best, like she was mainstream. She appealed to certainly just about every woman in America, but lots of men too, like,

• 2:01:33David Rosenthal?

  like massive, big, wide lanes. Now, you don't have to do that with the internet. You can aggregate a niche audience. So like, you can have influencers in business technology like them, like us, you know, like you can have influencers in, uh,

• 2:01:51Ben Gilbert?

  I was really hoping to get through this whole thing without you ever labeling us an influencer.

• 2:01:57David Rosenthal?

  Okay, we, this is, we got to stop talking about.

• 2:02:01Ben Gilbert?

  No, but you're right. Like, if you, if you think about the ways that influencers monetize, yeah, there's the sort of like native advertising paid placement type of thing. There's the notion that you're going to create really intense fandom within a niche, which she just had a fricking huge niche and there weren't a lot of other people competing. So like,

• 2:02:19David Rosenthal?

  The niche was women.

• 2:02:22Ben Gilbert?

  Yeah. And so, you know, she, she's able then to carve that up, audience up as more channels emerge into more niche down versions and then monetize them each in a different way through the magazine, through the website, through YouTube views, through whatever else. Yeah, those are good, good themes.

• 2:02:37David Rosenthal?

  Nobody was ever going to make a nationally syndicated television show about like the business of technology in 1986. Like, but now the internet.

• 2:02:49Ben Gilbert?

  The way that I labeled this theme is she had the perfect timing where you could reach a national audience, but everyone couldn't reach a national audience. And this could never happen again. Like you can never reach an audience this wide, rise up this quickly and have the intense type of fandom that she had ever again.

• 2:03:11David Rosenthal?

  All right.

• 2:03:12Ben Gilbert?

  The other one that I just really want to call out is the benefits of a zero marginal cost business. So from a Forbes profile that is linked in our show notes, we have the 1994 economics of the Oprah Winfrey Show, where, let's see, the show grossed $196 million. Harpo was paid 100 million of that. So we sort of know what the rev share looked like with King World. Oprah made 74 million of that 100 personally. And so already by 94, she was making $74 million a year. Let's pop back up to that gross revenue number, 196 million. Show only costs 30 million to produce.

• 2:03:52David Rosenthal?

  Wow. That's some good EBITDA margins right there.

• 2:03:56Ben Gilbert?

  So what is that? It's a 85%. Is that right? 85% EBITDA margin?

• 2:04:03Ben Gilbert?

  I guess it depends what you say production costs are, if that's a gross margin or if that's a net margin. But in either case, an 85% margin is amazing. And the takeaway here is if you run a business where your costs are fixed to the type of content or software or whatever you create, and then your audience scales completely independent of that. So for every additional person she added that watched the show, she got, you know, one person's worth of revenue, but it didn't cost an additional dollar to get that person. Like, holy crap, that's a good business. And so it's interesting that they were able to produce something with four people that then scaled up to, you know,

• 2:04:48Ben Gilbert?

  hundreds of people to produce it. But still, their audience was so big that it massively outran, the revenue massively outran the costs of the show.

• 2:04:56David Rosenthal?

  This was the whole thesis of technology and software and venture capital, up until people started realizing that, oh, you can also build tech-enabled businesses with lower gross margins in the real world, which of course you can, but it's a very different business than the, you know, this is why the media and technology businesses are so linked, is they are zero marginal cost businesses. And when they scale, they just create beautiful, beautiful businesses in economics.

• 2:05:23Ben Gilbert?

  Yeah. Also, let me revisit that and say, I think this is a gross margin because at the very least, Oprah has to pay herself out, and that's going to eat into the EBITDA margin.

• 2:05:32David Rosenthal?

  Got to pay the mortgage on the promised land.

• 2:05:34Ben Gilbert?

  That's right. So the amazing economics of a media business, if done correctly, where you have sort of, much like a software business, a pure software business capped fixed costs and potentially unlimited or zero marginal costs created unlimited upside.

• 2:05:49David Rosenthal?

  Heck, Tom Murphy and Dan Burke at Capital Cities were among the first to realize this.

• 2:05:54Ben Gilbert?

  Indeed. Well, I think a good time to move into value creation and value capture. So Oprah created a ton of value in the world, managed to capture a lot of it. Let's talk about if what she did was good for the world. And this is something we started doing after our Uber Lyft episodes. Oprah, I think pretty undeniably is good for the world. Like, it's hard to find an area where you're like, gosh, Oprah making all this money, it was actually bad for the world that she was in business. The interesting question that I'm sort of noodling on is, you know, she's got billions of dollars now and a lot of it's tied up in Harpo. It's not like she has kids. So what's she gonna do with all that money? She's donated a lot to charity.

• 2:06:38Ben Gilbert?

  She probably will continue to donate hundreds of millions, if not billions more. But it's actually an interesting question to say, what will be Oprah's legacy?

• 2:06:47David Rosenthal?

  Yeah. Well, it actually, it ties into, I hadn't thought about this until 15 minutes ago in the show, but it's directly tied into what happens to Harpo in the future. At some point, there needs to be a home for Harpo, especially because of this. Like, there's Oprah doesn't have any biological heirs right now. She could designate other heirs, but that's 80% of Harpo, the ownership. Like, it needs to go somewhere. So like, like Disney needs to buy, like, somebody needs to buy it or steward it or something. So I think this actually points to. At some point in time in the next, you know, years to decades, I think we're gonna see

• 2:07:30David Rosenthal?

  a Lucasfilm Marvel type deal for Harpo.

• 2:07:35Ben Gilbert?

  Type deal with Harpo.

• 2:07:35David Rosenthal?

  For sure, whether with Disney or somebody else, we almost have to.

• 2:07:39Ben Gilbert?

  Still doesn't answer the question, though, of like, what does Oprah do with all the money?

• 2:07:43David Rosenthal?

  So we know is she has not signed the Giving Pledge, I believe, but she did attend the first Giving Pledge dinner.

• 2:07:49Ben Gilbert?

  Yeah, she's involved.

• 2:07:49David Rosenthal?

  Certainly giving away most of the money, a lot of money over the past years.

• 2:07:55Ben Gilbert?

  And it's interesting because like, we don't take this angle with other companies. Like, when we did our Amazon episode, we didn't end on what will Jeff Bezos do with all this money, but like, no other company is so intrinsically tied to a person that we've ever covered. Like, it's hard to distinguish.

• 2:08:10David Rosenthal?

  Well, and the ownership structure, right? Like, Amazon, you know, Amazon's a public company. It is 80% not owned by Jeff Bezos.

• 2:08:15Ben Gilbert?

  Right.

• 2:08:17David Rosenthal?

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• 2:08:23Ben Gilbert?

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• 2:08:34David Rosenthal?

  Yep. In the crazy speed of today's AI world, shipping fast is just table stakes now. It's basically trivial to build and deploy your app constantly. The real advantage is how quickly you learn what changes actually created value for customers, and how fast you can use that signal to guide what you ship next.

• 2:08:54Ben Gilbert?

  This is where Statsig comes in. It brings experimentation, feature flags, and product analytics into one unified system so teams can ship safely, test rigorously, and directly link what they changed to how users actually behaved.

• 2:09:07David Rosenthal?

  So if you want to make learning your competitive advantage, whether you're building new AI experiences or just evolving your existing core product, go to statsig.com/acquired to get started.

• 2:09:18Ben Gilbert?

  All right, well, let's move on to grading. So for, again, folks who are newer to the show, we basically grade how good of a use of capital was it for Big Co. to buy a little Co. and compared to everything else they could have done with it. In this one, we're grading how good of a use of $16 million was it for Oprah to buy out the rights to her show? Like, I don't know if it's an A or an A+. What's the, like, on an absolute dollar return, it can't possibly be an A+, but on a multiple perspective, it might be up there.

• 2:09:45David Rosenthal?

  It's clearly either an A or an A plus. We can't decide which until a transaction like we just talked about happened. And then, once that happens, then we can say like, okay, $16 million back in 1988, I think it was, right? What's the IRR on that from that point in time to the 80% of the value that Oprah realizes from the sale of Harpo, if and when that should happen?

• 2:10:09Ben Gilbert?

  Yep. But the bottom line is, it's incredibly hard to find a better use of $16 million than she did in 1986.

• 2:10:17David Rosenthal?

  Totally. I mean, she created a compounding machine with Harpo. I mean, that is what you're trying to do when you're creating business, is a cash flow compounding machine. And she's done that. And it, you know, got her the promised land. Literally got her to the promised land.

• 2:10:31Ben Gilbert?

  For sure. All right, carve outs?

• 2:10:35David Rosenthal?

  Carve outs. So mine, I have been reading this, perhaps, we've been in just like 80s, 90s moments here. Like, this is so great. I'm loving it. I've been reading the Dark Tower series by Stephen King, which I always thought of Stephen King as like 90s horror author. Dark Tower series, it's like, it's amazing. It's basically intentionally, but unintentionally, you know, this is his attempt at like an American Lord of the Rings. It like, kind of fits the bill. Like, it's excellent. I'm about two thirds of the way through it. It's like, probably 8, 9,000 pages in total. But just like, so, so good. It's about Roland, the gunslinger, and many, many other characters along the way. But highly recommend.

• 2:11:19Ben Gilbert?

  Nice. Well, Stephen King's also a great follow on Twitter. He's got some fire takes. Mine's quick, and it's only going to be quick because if I say too much, it would spoil it. For people who listen to Reply All, I'm going back and listening to some of the most popular episodes that I've never heard. If you haven't listened to Reply All, and you like this show, I bet you'd really like that show. Episodes 102 and 103, Long Distance, Parts 1 and 2, starts with the host getting a phone call from a 1-800 number that he thinks is trying to scam him. And he picks it up and rolls with it. And it goes to like, an unbelievable place that you would never guess over the course of the two episodes. And

• 2:12:00Ben Gilbert?

  it is totally thrilling. So for those who have listened to it, I'm sure you're nodding along right now and enjoyed it. And for those who haven't, go check it out.

• 2:12:09David Rosenthal?

  Can't wait.

• 2:12:11Ben Gilbert?

  Awesome. Well, we are landing the plane. We are bringing it home. Audience, we hope that you live your best life. If you have some time, I think five to 10 minutes, we would deeply appreciate you filling out the Acquired survey. We do this about once a year to get a sense of how we should make the show better and really what you like about it, what you don't, what we can change, and who you are. And if you aren't subscribed and you like the show, we really think you should hit the subscribe button in your podcast player, or you can go to our website at acquired.fm and sign up to receive new episodes via email. You can also join the Slack or listen to any other episodes on there. So without any further ado, we'll see you next time. We'll see you next time.