NBCU's Gaspin on Oxygen
By Anne Becker -- Broadcasting & Cable, 10/14/2007 8:00:00 PM
Last week, NBC Universal ended weeks of speculation by buying female-targeting Oxygen Media, parent of the independent Oxygen cable network, which is in 74 million homes. On the heels of the $925 million sale, NBCU TV Group president Jeff Gaspin talked with B&C’s Anne Becker about how Oxygen beat out multiple cable contenders; why he wants to move all of NBCU’s cable group out of 30 Rock; and why women’s Web site iVillage, which NBC bought last year for some $600 million, has been a tough sell to TV viewers.
A lot has been made of Vulcan Capital’s Paul Allen being the impetus for this sale – can you speak to that?
I don’t honestly know what the issues were for them. They approached us midsummer, as did several other independent cable networks. And I don’t want to say who those were, but we did a quick look at some of the basics -- revenue projections and distribution deals -- and Oxygen was the one we felt had the most solid base and fit our stable of assets best. And so we decided to pursue conversations with them. I don’t know what motivated them, but I would say it was many factors.
There aren’t that many independent cable networks left. Four of them came to you during the summer. Was that just coincidental?
I don’t know what it is. Maybe you start your budget process in the summer for the following year. Maybe that predicated many to look at [selling]. The credit market started to fall apart one month later, so maybe the market just seemed healthy at time. Maybe people were afraid things would start to turn, but it was funny: We got four different phone calls at the same time -- independent networks or networks owned by bigger media companies, but the only ones those companies had and not part of big cable group.
It’s fairly amazing to me that Oxygen got the distribution it did, but the programming never hit it huge. How much will you up programming budget?
We did a few months of due diligence with the Oxygen team after they approached us midsummer and I was very pleasantly surprised with what I saw. They actually have healthy programming budgets. I wasn’t sure how much they spent on programming, but they spent a sizable amount -- within the range of what Bravo and E! [Entertainment Television] and some other networks like that spend. They had better distribution deals than I expected and realized. I was not familiar with their branding because I’m not the target demo. But when I looked at the research they did and what we pulled, with women 18-34, they were actually one of the most identifiable brands. [Bravo president] Lauren Zalaznick for the last year would say to me, ‘Oxygen is creeping up. We’re looking at them in our rear-view mirror. Their distribution is getting much closer to ours. They’re starting to copy our formula.’ Every of our networks does a competitive set and looks at those their audience overlaps with the most or has the likelihood of taking their audience share, and Oxygen became that for Bravo within the last year.
A lot of people think Lauren is a shoo-in to lead Oxygen. Comments?
Clearly, we have to find a new head. We’ll look at internal candidates, we’ll look at external candidates. I don’t want to say anyone’s a front-runner. We have 30-45 days to close, and I hope and expect that by that time, we’ll know who it’s going to be.
NBCU president Jeff Zucker talked about Oxygen completing a ‘virtual network’ of women viewers for NBC and downplayed the idea that you’d link it to iVillage. Did you buy the channel just to aggregate female eyeballs or to try and find a linear TV companion for iVillage?
I don’t think there’s any plan to do the latter. This is more the former, where we will look at the unduplicated audience at Bravo, The Today Show, iVillage and Oxygen. For argument’s sake, that’s 50 million we reach. The idea is to go to market to sell women 18-24, 18-34, 19-49 and 25-54 -- upscale, middle-scale, A county, B county -- and to be able to carve that in many places and ways, so that if you’re in one particular market and want to reach women in a certain demo, we can say, ‘Buy this.’
But, surely there are some corporate synergies you’ll want to maximize with iVillage and Oxygen?
It’s interesting: We thought that when we bough iVillage initially -- that with Today and Bravo and some of our properties, we could drive viewers to iVillage just by promoting it on our properties. That was more difficult than we thought. So I wouldn’t say that’s a guaranteed assumption. There is a play -- I do think there is something to do with all these assets. I think we still have some brainstorming to do to figure out the best way make that work.
Why hasn’t that sort of cross-promotion worked so far between your TV assets and iVillage?
I don’t know the reason -- if it’s just a disconnect between the audience on-air and the audience at iVillage, or if we didn’t make enough of an effort. I’m not 100% on top of that because it’s not the area I manage. We’ve had great success driving Bravo viewers to Bravotv.com, NBC viewers to NBC.com. My guess is that that’s the fan and the fan really gets the connection, but it’s a little more difficult to, say, be on Bravo and now go watch something on iVillage. It’s not as easy a connection.
So you won’t rebrand Oxygen as iVillage TV or something?
That’s not in our plans right now, and I’d be surprised if it were in our 100-day plans.
Is the viewer going to notice any difference right now?
What we can do almost immediately is really get the NBCU promotion machine behind them. When they launch a series, the consumer will have a much better sense of what’s on and when it’s on. We’ll work with all of our networks on repurposing when it fits a brand, and we certainly have the opportunity to take some NBC content and repurpose it on Oxygen. In terms of actual changes to on-air, my taste might be a lit bit different than Gerry’s [Oxygen chairman and CEO Gerry Laybourne] taste, so I’m sure the content could evolve over time, but don’t you’ll think notice it immediately.
And how might your taste differ from Gerry’s?
It’s too early for me to say.
You and Jeff Zucker went over to Oxygen Wednesday. What did you tell them?
It was mostly a Q&A. Gerry introduced us as “the two Jeffs,” and I would say it was a very upbeat meeting. Everybody was very deferential to each other, actually. But I’d say at least 90% of the staff was there, and I saw a lot of smiling faces -- people seemed happy about things.
Some of them are pretty unsure about their jobs, though. Do you know when and from where you’ll make cuts?
We have a very formalized integration process. [NBC Digital Distribution chief] J.B. Perrette is leading it. He did the cable part of the NBC/Universal merger, and he did Bravo with me when we acquired it. It usually takes 30 days on the low end. NBC/Universal took eight months. It’s really about learning their business inside and out so that we know what to do on day one. It’s learning everything we possibly learn by having conversations departmentally -- the IT guys with the IT guys, the programming guys with the programming guys -- so we can see how they operate.
You’re not moving Oxygen to 30 Rock, but would you move, say, Bravo out to Oxygen headquarters in the Chelsea Market building?
I have no issue with them staying where they are. I would consider moving all of cable out of 30 Rock if I could. Sci Fi [Channel], USA [Network], Bravo are all busting at the seams at 30 Rock, and it’s certainly been discussed internally. Why don’t we try to go somewhere else with cable group, and we’ve all been supportive of that, but unfortunately, the Oxygen headquarters aren’t big enough for the other networks.
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