As it turns out, Oxygen has floundered with a variety of start-up hassles since it debuted in February 2000, and the much-ballyhooed network for women is still laboring to achieve national distribution.
But Lifetime isn't looking back. It has poured on the marketing heat over the last year, cementing its dominance in women's cable TV programming and surging to new heights in ad revenue and ratings.
The cable network, owned by Hearst Corp. and Walt Disney Co., is even providing some of the cross-platform frills Oxygen promised: enriched Internet offerings and books published under its brand name (Lifetime's first imprint, "Love Letters of a Lifetime," appeared in February).
Last year, Lifetime racked up $569.8 million in advertising, 3.8% above 1999, according to Taylor Nelson Sofres' CMR. Lifetime also ranked first among all cable networks in prime time in the first quarter of 2001, with a 2.0 Nielsen rating, an 18% jump from a year ago. Lifetime tops 80.3 million subscribers based on the latest numbers from Nielsen Media Research.
Oxygen had 14 million subscribers in March but on April 3 announced a strategic partnership with AOL Time Warner in which Oxygen will add another 10 million viewers by this summer, and Oxygen says it has commitments to reach a total of 42 million subscribers by the end of 2002.
Another five of the top eight multiple system operators-Adelphia Communications Corp., AT&T Corp., Charter Communications, Cox Communications and Insight Communications-offer Oxygen and are in the process of rolling it out in many markets. However, the network still isn't carried by Cablevision Systems or Comcast Corp., and there's no indication when that might change.
AOL Time Warner was one of the original investors in privately held Oxygen. Other major investors include LVMH, Carsey-Werner-Mandabach, Vulcan Ventures and Oprah Winfrey's Harpo Entertainment Group.
MUST PICK UP PACE
Oxygen needs to pick up the pace because more competition has materialized. In January, AMC Networks renamed its Romance Classics network WE, creating a significant new network targeting women cable viewers.
Initially relying on AMC's vault of classic romantic movies, WE will begin offering a range of original programming. It plans a number of new original series, including "Cool Women," which profiles remarkable women, and "Great Romances," a documentary series on fascinating couples.
When WE was launched, the network also announced it had signed carriage agreements with Adelphia and Charter, which will roll out WE to subscribers. There are now 40 million basic subscribers and 25 million viewing subscribers, according to AMC President Kate McEnroe.
Lifetime isn't resting on its laurels. The network is ramping up its first-ever nationwide mobile marketing effort (see story below) and last week announced a new reality-based channel called Lifetime Real Women debuting this summer.
Exec VP-Sales Lynn Picard attributes Lifetime's advertising success to three things: strong ratings, its role as an advocate for women and multiplatform opportunities.
Lifetime's ratings coup is the result of several years of investment in original series, original movies, specials, documentaries, and sports and fitness programs. The network is strongest on Sunday nights, when three of its top original dramas-"Any Day Now," "The Division" and "Strong Medicine"-fill its prime-time menu.
SHOWS REAL STORY
Cherri Prince, VP-planning director at Bcom3 Group's Leo Burnett USA, Chicago, conducted a 2000 study of women's issues for LeoShe, an agency consulting group, and found six values important to women, including authenticity. "Lifetime has nailed that," she says. "Their original programming and intimate portraits show the real story."
The cable network also is working to shape itself as an advocate for women by covering the key issues that affect their lives. "We are a brand that stands for something ... not just entertainment but issues like breast cancer, violence against women, childcare and getting out the vote," Ms. Picard says.
Lifetime has made major strides in the last year in harnessing its Web site (lifetimetv.com) to cross-promote its programming and to sell additional advertising and sponsorships. General Motors Corp.'s Chevrolet is a major sponsor of Lifetime's online offerings, Ms. Picard says.
Lifetime has seen the categories of advertisers involved in its on-air programming expand. Traditional advertisers like packaged goods and pharmaceuticals have been joined by cars, insurance and financial services. "We're attracting them because women use the products," says Ms. Picard.
Lifetime sold ad time in the TV upfront market for the first time last year and is confident about another strong upfront season in 2001, despite industry talk of a soft market.
"We're confident because of our numbers and brand, and there's more stuff down the road," says Rick Haskins, exec VP of the Lifetime brand. He says the network will keep the shows it has and add new ones, including a reality show, "Women Docs," that will head a Saturday "reality night" lineup that also includes a movie and "Beyond Chance," a popular show introduced last year that's hosted by rock star Melissa Etheridge. The network introduced its new lineup at last week's cable upfront.
Lifetime is also selling advertising for its sister digital channel, Lifetime Movie Network, on the upfront market for the first time this year.
AMC's Romance Classics carried no advertising and the rechristened WE doesn't either, though in late March it signed an agreement with Johnson & Johnson, making the marketer WE's exclusive sponsor. Ms. McEnroe calls it "the first exclusive sponsorship in cable history. Normally, you have a full load of commercials or you're commercial free. This is the first time you have two brands coming together."
J&J will run spots before and after shows but not during them. This month, WE will begin running short-form vignettes that will carry J&J promotional messages.
In a promotion beginning this fall, J&J products will carry WE messages on packaging, such as promotions for individual shows, Ms. McEnroe says. J&J's customer base "matches perfectly with our female demographic," she says.
Andrea Alstrup, corporate VP-advertising at J&J, says Interpublic Group of Cos. media agency Universal McCann, New York, brought the deal to the company. "We have so many brands we are addressing to the female audience ... this is a good way to reach that audience," Ms. Alstrup explains.
J&J advertises on Lifetime, Oxygen and network TV as well, calling the deal with WE "an extension for us to reach women no matter what."
The J&J deal extends through the third quarter of 2002, because beginning in the fourth quarter WE plans to begin accepting advertising in a more traditional format and J&J will get a charter position.
WE EYES 2002 UPFRONT
WE will market its offerings to advertisers in the upfront marketplace for the first time in 2002, Ms. McEnroe says. Advertising will be limited to 8 minutes per hour. "In a cluttered environment, recall of advertising is less and less," she says.
At Oxygen, after its high-profile launch in 2000, the network has generally failed to meet expectations.
Headed by former Nickelodeon doyenne Geraldine Laybourne and backed by "Cosby Show" producers Carsey-Werner-Mandabach and Microsoft Corp. co-founder Paul Allen, Oxygen has struggled with everything from getting its format right to getting distribution on cable systems.
Despite the distribution tangle, C.J. Kettler, Oxygen's president of sales and marketing, says "we had a good upfront last year," racking up $20 million in sales. She says the network has 80 advertisers and signed special deals with J&J, Hewlett-Packard Co. and Procter & Gamble Co. that involve on-air and online convergence packages.
The dot-com fever that helped Oxygen promote its vision of uniquely integrated Internet and TV programming last year has cooled, but Oxygen still pushes a strong convergence theme in its on-air programming. This is supported by its use in all its ads of a red stripe appearing near the
bottom of the screen, with a segment below the stripe for variable text messages that urge viewers to go online (oxygen.com) for more
information and to participate in promotions. Agency is Interpublic Group of Cos.' Mullen, Wenham, Mass.
Oxygen now boasts 200 Web site advertisers, where it generates more ad revenue than through its TV programming so far, says Ms. Kettler. America Online sells online ads for the network.
The Oxygen online operation faces its own problems, however; late last month it laid off 35 staffers, after letting go 10% of its Web staff in December.
GOOD EXAMPLES OF SPECIALTIES
Media buyers speak highly of the women's networks. "All three are good examples of the increasing trend in cable TV toward specialized programming," says John Rash, senior VP-broadcast negotiations at Interpublic Group of Cos.' Campbell Mithun, Minneapolis.
"Lifetime's biggest success isn't individual programming but a strategy and tonality," he says. "On any given night, a loyal viewer expects the same kind of female-focused original program or movie."
Although WE is strategically and directionally sound, the network "faces significant challenges getting noticed because it's an imitator," Mr. Rash says, repeating a common theme that any new women's TV programming risks imitating Lifetime.
Oxygen "has taken an innovative approach," he says, "but still faces significant distribution challenges." This worries advertisers, say media insiders.
Bruce Cohen, senior VP-group director of national broadcast for Bcom3 Group's MediaVest Worldwide, New York, sums it up this way: "Lifetime has such a large lead from a distribution and brand recognition standpoint. It will be very difficult for the other two until distribution reaches a certain level."
Timing may turn out to be everything in targeting women in cable. Unless Oxygen mounts a major challenge, Lifetime will remain the undisputed leader in the field for the foreseeable future, and Lifetime's early investment in the category was a winning strategy.
"Women don't just buy groceries and household goods," says Lifetime's Mr. Haskins. "They're affluent and influential; they represent 52% of the population and control $3 trillion in disposable income. It makes sense to go after women."