NBC Universal Pursuing Cabler Oxygen

Sale to Peacock Would Boost Network's Standing With Advertisers

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NEW YORK (AdAge.com) -- NBC Universal is examining the possibility of buying stand-alone women's cable channel Oxygen in the hopes of broadening its own cable portfolio, according to a person familiar with the situation. For advertisers, the move would give Oxygen new momentum in the marketplace, where it is often considered a second-tier media outlet at best.
Though Oxygen is in 69 million homes, its independence makes it less palatable to Madison Avenue.
Though Oxygen is in 69 million homes, its independence makes it less palatable to Madison Avenue.

The talks are still considered preliminary, according to the person. An Oxygen spokeswoman said the company is always evaluating options to maximize potential for its shareholders. The discussions were reported earlier by The Hollywood Reporter.

NBC's heft in the ad market
The independent cable outlet, originally launched in February 2000, currently reaches 69 million homes. But NBC Universal's cable properties, which include USA, Bravo and Sci-Fi, among others, has considerably more heft in the ad market. Bravo alone reaches more than 86 million homes, while USA reaches 91 million. What's more, while NBC lacks a TV property aimed solely at women, it does own iVillage.com, a web property that includes sites centered on topics such as health, astrology and gardening.

Though Oxygen is led by Geraldine Laybourne, a respected cable executive who first gained notice for her leadership of Nickelodeon, its independence makes it less palatable to Madison Avenue.

"They are selling it in a vacuum," said Ira Berger, director-national broadcast at Richards Group, a Dallas agency. "It's going to be easier to sell if they can pack it with other elements."

Star clout
Oxygen has long had star clout because of Ms. Laybourne and programming featuring Oprah Winfrey, Mr. Berger said, but "it's a very concentrated womens' network and its not very big numbers. It's easy to leave off a buy if you want to."

Oxygen took in about $49.1 million for the first half of 2007, and about $102.1 million in 2006, according to TNS Media Intelligence. Its biggest advertisers, however, aren't the cream of the crop. In both 2006 and the first half of 2007, its top source of ad revenue came from paid-program commercials, TNS said. Dating site eHarmony.com, FreeCreditReport.com, Bowflex exercise equipment and Valtrex herpes medication were among the channel's other top sponsors in 2006.
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