Cover Story: Breathing New Life Into OxygenNetwork takes on Lifetime and Oprah's new net with attitude (drinking and swearing welcome) 4/11/2009 02:00:00 AM Eastern
Working at Oxygen—the home of “badtastic” reality spectacles like Bad Girls Club and Tori & Dean—requires a level of fervor and devotion bordering on zealotry. “I feel like a televangelist sometimes,” says Jason Klarman, who was appointed general manager of Oxygen Media in January 2008, shortly after NBC Universal's nearly $925 million acquisition of the network. “The whole team,” he adds, “takes on the role of evangelists spreading the word.”
And that word has shifted since the NBCU acquisition. A network re-branding last summer jettisoned the pink O logo, and any pretense of feminine decorum. At the new Oxygen, where DFW (down for whatever) rules, there seems to be even more on-air drinking, swearing and cat-fighting, and no one apologizes for any of it. It's part and parcel of what the network calls “Generation O.”
This passion is accompanied by rolled-up sleeves, starting with Lauren Zalaznick, president of NBCU Women and LifestyleEntertainment Networks, who oversees Oxygen and Bravo. Zalaznick is credited with turning Bravo into a Top 20 basic cable destination with one of the most well-defined brands in television. As her new team heads into its first upfront presentation with its own programming to introduce, the question is: Can the crew do for Oxygen what it did for Bravo?
It's a vital query for the network. Granted, Oxygen says its year-to-year profit grew 283% in 2008. Total revenue was estimated at $218 million last year, according to data supplied by SNL Kagan. But for all of Oxygen's post-NBCU growth, it remains small, with an average primetime rating of 0.4. It can claim an average viewer about a decade younger than Lifetime's average of 47, but Lifetime is still the largest ad-supported female-targeted network, with revenue approaching $1 billion.
“Oxygen has not been as big a challenge for Lifetime as many had predicted,” Derek Baine, senior analyst at SNL Kagan, wrote in an e-mail. “It has slowed growth, but [Lifetime] is still a significant player.” And the network faces a tough fight from, among others, original co-founder Oprah Winfrey's coming OWN.
In the ratings/revenue battle, Oxygen is pinning its hopes for continued growth—and a bigger stake of the demo—on tapping into a kind of engagement its team is creating.
“It's not the size of the audience,” Klarman says. “It's the kind of viewer we deliver. Nobody watches Oxygen casually.”
A Pattern of Growth
Oxygen's growth has continued: In the first quarter of 2009, the network posted a 25.5% increase in ad revenue. It grew primetime ratings among its target demographic of 18-34-year-old women by 57%, more than any other network in ad-supported cable's top 30, putting Oxygen at No. 20.
The network pulled in $130 million in total ad revenue in 2008. And last year, Oxygen booked 100 new advertisers during the upfront, according to Klarman. This year, Klarman and his sales team put on another full-court press, criss-crossing the country for 108 meetings in four weeks.
Being part of the NBCU suite of networks is certainly a plus in a down market. “It puts them in a stronger position than their competitors that may not have the leverage of the No. 1 cable network [USA],” says one buyer. “This year, [advertisers] are trying to figure out how to make their money work harder. If there are other networks in the portfolio, that's a strength for Oxygen.”
But challenges abound in a crowded women's lifestyle field. OWN, the Oprah Winfrey/Discovery venture that is now expected to launch in early 2010, remains an abstraction, but an early glimpse of the network's programming strategy indicates that it will likely be a general-interest lifestyle network that will attract an older viewer than the twenty-something watcher Oxygen is pursuing. And while Lifetime, which recently prevailed in its lawsuit to air Project Runway (poached from Bravo), is down double-digits in key demos, it still out-rates Oxygen among Oxygen's target demo of 18-34-year-old women. Lifetime averaged 168,000 viewers to Oxygen's 105,000 in primetime for the first quarter of 2009. Even male-targeted Spike, a Top 10 basic cable network, has more female viewers than Oxygen.
“The 18-34-year-old women who are watching Spike are being dragged along by someone in their family or they're watching a particular show,” counters Jeff Gaspin, president and COO of Universal Television Group. “They're not Spike viewers.”
If Oxygen's recent ratings growth is an indication, it has reached its target viewers. The growth was powered by the strategic addition of off-net reruns of America's Next Top Model (still very much relevant to the Oxygen viewer if the recent stampede at a casting call in Manhattan is any indication). The network also expanded its reality franchises, including Bad Girls Club and Tori & Dean, from half-hour to hour-long episodes.
Last month Oxygen debuted Pretty Wicked, the first original from its new development team. It was the network's highest-rated premiere among total viewers (and also its youngest, with a mean age of 24).
But in the niche-ified world of cable, “highest rated” is relative—Pretty Wicked averaged just over 600,000 total viewers and 466,000 in the 18-49 demo. It also benefited from a Bad Girls Club season-three reunion special lead-in that ranks as the most-watched telecast in the network's history, with 1.4 million total viewers.
This summer, Oxygen will bow Dance Your Ass Off, a cross between Biggest Loser and Dancing With the Stars. Addicted to Beauty, a docu-soap set at a La Jolla, Calif., spa and beauty enhancement center, and Naughty Kitchen, which follows potty-mouthed, plus-sized Southern chef Blythe Beck, will premiere later this year. The Janice Dickinson Modeling Agency will not return, according to sources.
The network's brand of girls-behaving-badly reality can be off-putting to some advertisers. And Dance Your Ass Off has a more immediate problem. According to Klarman, there were internal discussions about the word “ass” in the show's title. But ultimately, he says, “There has been very little pushback” from the network's advertisers or NBCU brass.
Trender, Spender, Recommender
At Oxygen, the psychographic Zalaznick hopes to reach is a “trender, spender and recommender.” The Oxygen viewer, according to the network's research, is the first to try new products or download the latest apps and then recommend them to her friends. If it all sounds like a morass of marketing-speak, it is by design.
Says Klarman: “We created Oxygen with the advertisers in mind. For us, women aren't a niche. It's a very specific type of woman.”
That woman shops—a lot. She is young, so she has yet to develop recalcitrant loyalties to particular consumer brands. And perhaps best of all, she has kept up her spending during the recession. According to Tony Cardinale, senior VP of research at Oxygen and Bravo, “She is still likely to spring for the salon haircut.”
Research is key at Oxygen. “Psychographic DNA,” says Cardinale, “is what our business is all about.”
There are signs that advertisers are warming up to Oxygen's pitch. “There is a buzz at the ad agencies about Bad Girls Club,” Michael DuPont, VP of ad sales, said during a direct-reports meeting with Klarman and the rest of the Oxygen staff. “I overheard a group head at a major agency yesterday saying the he 'couldn't believe the turn BGC has taken this season.'”
The network offers a dizzying array of extras on its Website—surveys, games, bonus acts and widgets, including the HormoneOscope, sort of a PMS tracker. It's all part of Oxygen's strategy to forge a connection with the viewer that extends to the products she buys. (Yes, Playtex is an advertiser.) It's the engagement metric that marketers crave and network executives boast about. For instance, the just-concluded third season of Bad Girls Club drove views on the BGC Web page to more than 70 million, an increase of 499% over season two.
“I see no reason why Oxygen shouldn't follow the trajectory of Bravo,” Gaspin says. “I actually think Oxygen has a better sense of who they are than Bravo did in its first couple of years under our ownership.”
It is a network for the post-empowerment generation that came this close to seeing a woman win the White House and probably finds the whole feminist agenda utterly anachronistic.
“It really is a modern look at women,” Klarman explains, “and not in any sort of preachy, contrived way. We are not a cause. We are an entertainment channel.”
But a little fervor and zealotry won't hurt.