Oprah Winfrey, perhaps the most famous one-person entertainment company in the world, has signed a deal with Apple Inc. (NASDAQ: AAPL) to create “original” shows. Apple is so far behind Netflix Inc. (NASDAQ: NFLX) and Amazon.com Inc. (NASDAQ: AMZN), the arrangement is Oprah versus the rest of the entertainment world.
Apple is a friend of a sort for some of the companies it hopes to compete with. Apple TV carries Netflix, Hulu, HBO Now, Showtime Anytime, Starz, and several sports networks. In the round-about world of new age networks, Netflix carries shows from other networks, as does Hulu. There has rarely been such a mash-up of “frenemies” in the business world.
However, Apple management knows that original programs are a major key to adding new subscriptions. Netflix in particular, has invested hundreds of millions of dollars of its own money in shows, and often stands toe-to-toe against major studios at award shows. Amazon has begun to hold a similar position. Netflix seems to release a new movie, TV show, or stand up comedy programs once a week. Its management says its current line up is just the beginning. Apple has to make a similar level of investment, if it wants to have a chance to be an even modest competitor.
As a sign of how much money Oprah may make from the Apple deal, famous producer Ryan Murphy, signed a deal with Netflix which industry experts say could be worth as much as $300 million. Netflix has recently created a programming partnership with Barack and Michelle Obama. It is hard to imagine that deal was for anything less than tens of millions of dollars.
The Oprah deal is impressive because of her fame. But Apple will need a small army of performers and producers to make a dent in the Netflix and Amazon leads. Amazon Prime, which includes its streaming media business, has over 100 million members. Netflix has 125 million worldwide. Many people think Oprah is a force of nature. She will need to be more that to really help Apple.
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