Tech giant Apple has announced a deal with Oprah Winfrey to create original programming with an investment of approaching $1 billion expected in this area. What is described as a “multi-year deal” is a major coup for Apple as it looks to challenge the likes of Netflix and Amazon. In a world where content is King there is no doubt that Apple has signed up the Queen of content and a lady who has shown her Midas touch in recent times.
Revolutionising Weight Watchers
Those who follow the stock market will be well aware that back in October 2015 Oprah Winfrey acquired 6.4 million shares in Weight Watchers at a price of $6.79. She took an active role in the company and in March this year she sold 2 million shares at around $60 per share banking a $110 million profit in the process. She still holds 4.4 million shares with the price now approaching $100!
There is no doubt that this lady can pull the strings, she has the contacts but above all Oprah Winfrey is able to connect with their audience. This is a lady worth approaching $3 billion in her own right, someone prepared to put their money where their mouth is and she has a track record many can only dream of. As we await the details of the Apple deal it does not look as though an investment into Apple shares is currently part of the agreement but time will tell.
Moving in the right direction
Over the last few months there has been particular focus on the multibillion-dollar warchest which Apple had seemingly refused to utilise. While a $1 billion investment in content via the Oprah Winfrey deal will not even scratch the surface of the multibillion-dollar warchest, it is a move in the right direction. Over the last couple of years there were strong rumours Apple was looking to acquire Netflix but this never happened. Unfortunately for Apple shareholders, Netflix has gone on from strength to strength and Apple will now be in direct competition with Netflix.
As technology continues to advance, it is not difficult to see why companies such as Apple are willing to invest billions of dollars into original quality content. Oprah Winfrey has her own production company so it will simply be a case of utilising her existing assets for the benefit of both parties. It will be interesting to see how this deal progresses because we already know that Oprah Winfrey will be playing a major role both on-screen and off-screen.
Will investors follow suit?
There is no doubt that Apple has disappointed investors of late with production issues and a lack of news on future expansion. However, many investors will be raising their eyebrows at the Oprah Winfrey news just weeks after Warren Buffett increased his already sizeable stake in the company. Is this the new direction that Apple shareholders have been looking for? Is the company looking to diversify and reduce its dependence on the iPhone, iPad, etc product range?
Time will tell and while $1 billion is but a ripple on the ocean, it does show some movement with regards to future direction.