NBC Universal (NBCU) will purchase Oxygen Media, the operator of a cable channel aimed at women, for US$925 million, a move that dovetails with media and entertainment company’s 2006 purchase of the iVillage online network for $600 million.
The acquisition gives NBC a cable channel that reaches 74 million homes and offers advertisers a focused demographic, with more than 40 percent of the channel’s audience made up of women between 18 and 49.
Perhaps just as key is the fit with the iVillage family of Web sites. With Oxygen, the networks offer NBC vast opportunities for highly focused marketing that reaches across the two media platforms.
‘The Crown Jewel’
“In just seven short years, Oxygen has become the crown jewel of independent networks,” said NBC Universal CEO Jeff Zucker. “It’s a terrific property with a clear mission, strong brand and desirable audience.”
Major television networks have increasingly sought to create specialty media channels. For instance, Viacom has focused heavily on the youth audience, rolling up properties such as Nickelodeon and MTV and their online counterparts into bundles of media outlets that enable advertisers to reach consumers whether they are watching television, surfing the Web or, increasingly, on the move and connected via mobile devices.
“This acquisition increases our foothold in the advertiser-coveted young, upscale, female demographic, and perfectly complements our current roster of cable channels and plays to our strength of running and operating cable networks,” Zucker added.
Room to Grow
Oxygen’s founders include Oprah Winfrey and its early investors included Microsoft cofounder Paul Allen, whose Vulcan invested $100 million in the startup, which launched in 2000.
“This deal with NBCU is the best way for Oxygen to grow,” said cofounder Geraldine Laybourne. “Now together with NBCU, Oxygen can become an even bigger brand.”
Oxygen adds to NBC Universal’s stable of cable networks, which also includes USA Network and Bravo. NBC’s cable networks, which also include MSNBC and CNBC, now account for half of the company’s total profits and have been seeing double-digit revenue growth, the company said.
NBC plans to fund the purchase with the sale of some other assets, including two Spanish-language stations.
Oxygen will benefit from promotional exposure on NBC’s flagship daytime program, “The Today Show,” Zucker noted, as well as across the iVillage network, which includes both content and social networking elements.
The result will be “a virtual women’s network” that advertisers will pay a premium to reach, he added.
Hulu and Hullabaloo
NBC did not specify how it would integrate iVillage and Oxygen.com, the Web site of the cable network, which is used to promote the cable channel’s lineup but also carries exclusive and original content.
The media giant purchased iVillage amid a wave of similar moves by traditional media companies to expand their reach further onto the Web in order to take advantage of the skyrocketing growth of online advertising.
NBC has already begun asking producers who bring shows to it to consider how the property can be placed across multiple platforms, JupiterResearch analyst David Card noted.
“Networks have come a long way in figuring out ways to repurpose content,” Card told the E-Commerce Times. Some NBC shows are reshown on Bravo, for instance. NBC has already indicated it wants to extend that practice to the Internet as one of the two main media companies behind the soon-to-launch Hulu.com.
The sites may fit together well, since iVillage focuses largely on building community through blogs, message boards and service-style journalism, and Oxygen.com on promoting the network.
One big question will be whether the sites become alternative distribution vehicles for video content, Forrester Research analyst James McQuivey told the E-Commerce Times.
“The promise of the Internet is the extension of the specialization, focus and targeting that cable TV offers,” he added. With its demographics, the Oxygen network is already familiar to the advertisers who would follow the audience online. “NBC has been showing some leadership among the networks in terms of seeking ways to follow its audiences onto the Web.”