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Breathing Easier

Dec 4, 2006  •  Post A Comment

Seven years after it was launched with big names and high hopes, Oxygen Media is planning to throw itself a coming-out party.

Founded by former Nickelodeon chief Geraldine Laybourne and backed by A-listers including Oprah Winfrey and Paul Allen, Oxygen promised to serve women in what was then a new, revolutionary way, with original programming not only on cable, but online as well.

But traction came slowly and expensively for Oxygen. Cable operators were slow to add an independent channel and its programming didn’t click. Its multiplatform idea, devised during the Internet bubble, was ahead of its time, forcing it to retreat.

Now, after those fits and starts, the network’s executives believe they are tasting success, crossing the 70 million-subscriber mark and reaching $100 million in ad revenues. And they want the advertising community to know about it. Oxygen

will hold its first full-blown upfront presentation next month at Manhattan’s Cipriani restaurant.

“We have a lot to talk about,” said Oxygen president and COO Lisa Gersh. “We’re going to celebrate the 70 million milestone and we want to talk to the advertisers about our programming very early on.”

With the TV network going well, Oxygen also is going back into the Internet, Ms. Laybourne told TVWeek.

“That’s exciting,” she said. “We’re making tons of small bets.”

The network has posted the biggest gain in distribution of any network in the past 12 months, adding more than 13 million subscribers thanks to a deal with EchoStar Communications that came while the satellite carrier was feuding with Lifetime. With 70 million subs, “you’re in a completely different neighborhood” from the dozens of mid-sized networks with mostly digital carriage. “You don’t have to have the conversation about reach,” Ms. Gersh said. In prime time during the third quarter, Oxygen tied for 32nd place among cable networks in both adults 18 to 49 and in total viewers.

New networks often start with very low prices on a cost-per-thousand basis, and she said this year, the network was able to use its improved distribution and programming to convince advertisers to pay 12 percent higher CPMs.

“We’ve just had enormous growth in ad sales in a relatively flat marketplace,” she said. She said gross ad sales are up 80 percent in the past two years, and up 610 percent over the last four years.

“They’re all grown up. They’re sitting at the grown-up table,” said Laura Caraccioli-Davis, executive VP-director of Starcom Entertainment.

Ms. Davis said advertisers will buy a variety of networks to reach women.

On cable, Lifetime is the leader in the category, ranked third among all networks in delivery of women 18 to 49 with a 0.6 rating during the third quarter.

With some original programming clicking and a fresh batch of theatrical movies, Oxygen had a record 0.3 rating in the quarter, delivering 109,000 women 18 to 49, but was still well behind Lifetime.

Rainbow Media’s WE drew a 0.2 rating, with a delivery of 72,000 women 18 to 49. Advertisers can also reach women through other networks like E!, SoapNet or Lifetime Movie Channel.

“I don’t think Lifetime considers themselves part of that set,” Ms. Davis said. “They’re not in competition with Oxygen or WE. They’re more broad and they feel their competition is Turner or USA.”

Similarly Ms. Gersh doesn’t see SoapNet or LMN as competition because they don’t do much original programming.

Programming a women’s network is a tricky proposition.

“On the surface it looks like it would be so easy to program to women,” Ms. Davis said. “It’s hard because women make up half the population so it’s a pretty broad target and everybody targets women.”

Ms. Davis said the networks have done a good job of distinguishing themselves, with Lifetime on the serious end of the scale.

“I think Oxygen has tried to make a name for itself by being lighthearted, girls having fun,” she said. “The only show that recently has gotten a lot of buzz for them is that `Janice Dickenson Modeling Agency.”‘

Ahead of the Curve

When the network was formed, Ms. Laybourne was already talking about convergence.

“She was just so far ahead of the curve,” Ms. Davis said.

Despite growing pains, Ms. Laybourne was always sure Oxygen would succeed.

“We have a profitable business, profits are doubling every year,” she said.

Rather than a grown-up, she sees the network as being a pre-teenager with raging hormones.

“We’re going to have our most intense two months,” she said, with launches of new shows such as “Bad Girls Club” and “Tease, and new-season premieres of “Janice Dickenson” and “Campus Ladies.”

Early on, some people expected her channel to be more “PBS-y,” she said. But to reach a younger audience, “you’ve got to be funny, you’ve got to be sexy, you’ve got to speak in their language.”

Oxygen’s new Web programming is expected to roll out during the end of this month and next quarter. Executives declined to be specific about what their plans were.

“We’re excited about the ability to interact with our audience in a way that we can’t on television,” Ms. Gersh said. She remembers lessons learned from Oxygen’s first Internet push. “It needs to be a playful and purposeful spot for women online and that’s what we intend to do.”

Ms. Laybourne recalled that when Ms. Gersh joined Oxygen in the early days, she was a lawyer with no cable background.

“I said the biggest challenge was getting subs, and she said `what’s a sub?’ Now she knows, we’ve got 70 million subs,” Ms. Laybourne said.

Ms. Gersh said the secret was working closely with operators on projects, like a high-speed data campaign aimed at women and another campaign which features Oprah Winfrey when the network was rolled out on Comcast in Chicago.

“As an independent, you have one choice: Be charming,” she said.