Issue 9: Oprah Winfrey and Tyler Perry: One lesson in Business
Last time I wrote about Tyra Banks and her lessons in business and personal branding.
This got me thinking. Who else’s story and business approach has inspired me and what lessons can I learn. The first person that came to mind was Tyler Perry, and by extension Oprah.
Their personal stories in Entertainment and Business, are incredibly similar and valuable.
Let’s get into it.
TYLER PERRY
Tyler Perry is an Actor, Writer, Director, Producer and Billionaire.
Born into a poor family, Tyler was abused as a child. Discovering journaling on an episode of ‘The Oprah Winfrey Show’, Tyler channelled his pain creating characters and stories that reflected his reality.
These inspired his first play ‘I know I have been Saved’. In 1990, he moved to Atlanta and invested his $12,000 in life savings in its production and it…flopped. Out of an expected audience of 1500, only 30 people showed up.
Living out of his car, he refined the production and redid the play each year over the next six years. “He designed the set, made the programs and hung the lights; he even sold snacks during intermission”. It still never worked out.
Eventually, he performed the play in 1998 at the House of Blues and it was a sold-out success. The seven years of persistence was worth it. He would go on to tour the US performing the play in new cities, developing a large devoted African American followership. In 2005, Forbes reported that he made "more than $100 million in tickets, $30 million in videos of his shows, and an estimated $20 million in merchandise".
MEETING OPRAH
Around this time Oprah became a fan and in 2001 she invited him to her talk show. Onstage they shared a moment on resilience, backstage, Oprah told him the secret to her success:
OWN EVERYTHING.
Oprah at the time owned her show and the company that produced it.
Oprah Winfrey
In 1983, Oprah began hosting what at the time was a low-rated morning talk show called AM Chicago. Within a few months after she took over, the show went from last place in the ratings to 1st place in Chicago. It was then renamed The Oprah Winfrey Show, making Oprah, Chicago’s most popular talk show personality.
At the time she was being paid $230,000/year by the WLS-TV(ABC) that produced her show and her agent had negotiated a four-year contract with an annual salary increase of $30,000.
As more ABC people congratulated her on the deal her agent had made, she began to have her doubts. She fired her agent and hired a Chicago lawyer named Jeffrey Jacobs.
That decision turned Oprah from employee to owner.
Her show aired on over 200 stations in U.S. and in 117 foreign countries, and she earned over $70 million a year.
Oprah owned the show, the studios which it was produced and a sizeable stake in King World Productions, the company that distributes the show. Ownership not only enabled Oprah to have control over her show, but led to opportunities to produce films, publish a magazine, and have her own media network: Oprah Winfrey Network (OWN)
By 2014, her net worth estimated by Forbes was over $340 million, today it is $2.7 billion.
HOLLYWOOD
Armed with Oprah’s advice, Tyler headed for Hollywood with the goal of his 1st movie.
His 1st movie: “Diary of a Mad Black Woman” was based on his most famous character, Mabel “Madea” Simmons. Despite his successes with theatre, no one knew of Tyler Perry in Hollywood or believed in his target market: the African American community.
One executive told him “Black audiences that go to church don’t go to movies.”
Eventually, Tyler made a proposition to the CEO of Lionsgate Films: He would contribute half of the cost, collect half of the profit, and keep control of the content. The studio could deduct the (minimal)marketing cost and 12.5% distribution cost from Tyler’s share of the profit, but Tyler would own it all outright. In exchange, Lionsgate wanted a return of $20 million.
Over the next 14yrs, Tyler released 11 more Madea movies. By the time the franchise was retired in 2019, it had earned over $670 million at the box office, netting Tyler over $290 million in profit. Now that full ownership and distribution has reverted to Tyler, he has begun to aggressively market the movies overseas and spun-out new TV episodes.
TYLER PERRY STUDIOS
In 2015, Tyler Perry acquired 330-acre of a former Confederate army base, Fort McPherson, located in Atlanta. He has since spent about $250 million building a studio. It has 12 sound stages named after famous African American movie stars and a custom set that includes a replica of the White House, a luxury hotel lobby, and a 1950s-style diner. ‘Black Panther’ was the first film to be filmed on one of the stages.
Tyler Perry studio is bigger than Disney, Warner Bros. and Paramount’s studios in California, combined.
Tyler Perry also signed a $150 million deal with Viacom CBS (owners of BET network) and took a stake in the streaming service, BET+. The deal would see Tyler produce a minimum of 90 episodes of new TV each year until 2025, after which the rights revert to him.
Owning his own studio and the stake in BET+, gives Tyler the opportunity to control his entire creative process (from production to streaming) and keep a significant share of the profit. So far Tyler has produced over 1200 episodes of TV, 22 feature films and 24 stage plays.
Lesson from Oprah and Tyler Perry: Own Everything
IN YOUR BUSINESS
As shown in Choose Yourself by James Altucher, the world is changing. Industries have been disrupted and are being remade. In every aspect of society, the ‘middlemen’ or gatekeepers are being removed.
New tools are now available to help individuals be creative, start a business, earn additional income, and change the world without ‘help’. The internet and social media have made it possible to: become an influencer (social media), start an online store(Shopify), find freelance jobs and freelancers(Upwork), and start your own YouTube channel and get paid (Stripe/PayPal).
The internet enables you to quickly show and test your work based on the responses and social impressions (likes, shares, reviews, and purchase) you receive.
For example: if you want to start a fashion line in the past you would spend a lot of capital to hire a team, design different pieces, invest in inventory, before launching it and getting feedback from customers. Which is expensive. Today you can design a few pieces, hire a model and a photographer, and show your designs on Instagram and get instant feedback.
Faster and Cheaper!!!
The key lesson I believe we can learn from Tyler Perry and Oprah is to own everything about your creative process. Don’t wait for permission, get creative, show your work, get feedback, and improve.
In my field of product management, software used to be developed using a waterfall methodology. This meant that the development process was linear, and each task/phase of the software had to be reviewed before moving to the next phase.
In contrast was the agile methodology, which breaks down development into smaller increments, completed in iterations, or short time frames. After several iterations, the product is released.
Faster and Cheaper!!!
IN YOUR CAREER
The popular convention to achieve success is the ‘10,000hrs rule’. Focusing on one skill for 10,000hrs/10yrs, this can be done but is difficult to achieve.
Thankfully, there is an alternative. In How To Fail At Almost Everything and Still Win Big by Scott Adams, he introduces ‘Talent Stacking’ or what others call ‘Skill Stacking’:
“Successwise, you’re better off being good at two complementary skills than being excellent at one.”
The more skills you have, the more value you can create, which means more opportunities. Combining these skills means more chances of success.
Personally, my skills besides Product Management include writing (this newsletter), presenting, math(data), problem solving, and business development. Together, these skills make me more competitive as a product and business manager.
CONCLUSION
In conclusion, aim to own everything about your creative process. Don’t wait for permission, get creative, show your work, get feedback, and improve.
It is easier to succeed by being good at two complementary skills than being excellent at one.
Goodluck!
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Reference, Links and Resources
Forbes: From “Poor as Hell” to Billionaire: How Tyler Perry Changed Show Business Forever
Variety: Man of Action: Tyler Perry on Producing During the Pandemic and Why He’s Weighing in on Politics
Forbes: How Oprah Went From Talk Show Host To First African-American Woman Billionaire
The New York Times: A Triumph of Avoiding the Traps
How To Fail At Almost Everything and Still Win Big by Scott Adams
Choose Yourself by James Altucher
Skill Stacking: A Practical Strategy To Achieve Career Success