SECURITY

Thinking Inside the Box

Geraldine Laybourne of the Oxygen channel has finally discovered what women want -- perhaps to her chagrin, definitely to her profit.
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Geraldine Laybourne sweeps into a small conference room at the headquarters of Oxygen Media to watch a focus group getting under way one floor below. Most of Laybourne's employees at Oxygen, the four-and-a-half-year-old cable TV channel for women, have left for the day, and the usually bustling office -- located on three stories of a converted Nabisco factory in Manhattan's Chelsea district -- is quiet. Laybourne has been looking forward to this focus group, which she commissioned to gauge the interest of women in some kind of election-season special, an idea that is dear to her heart. Leading the discussion is Karen Ramspacher, a head of research at Oxygen, who sets the group at ease with friendly introductions and banter about everyone's favorite television shows.

Laybourne sits upstairs, watching the roundtable group via closed-circuit television. She happily munches popcorn while Ramspacher breaks the ice, offering soda to the seven participants and reminding them that pizza's on the way. She starts off by asking them to describe their jobs and name their favorite TV shows. "The OC," says Whitney, a 22-year-old college student. "Yeah," the other women agree enthusiastically. "American Idol," says Anna, a stay-at-home mother. "Reality TV...every one of them," says Trisha, a fifth-grade teacher from New Jersey, adding that she has two televisions right next to each other so she doesn't miss anything.

After the introductions, Ramspacher wades into more serious subject matter. "Where do you guys get your news from?" she asks. The women, all between the ages of 19 and 28, are here because, during a screening process, they expressed apathy toward politics. They fidget nervously in their seats. The schoolteacher reads the Bergen Record, the New York Post, and the New York Daily News. "I don't read them for politics," she says. "I read them for Page Six [the Post's gossip section], that's about it." Her students receive copies of The New York Times every day, she mentions later -- but she doesn't encourage them to read it; she uses it to cover the tables when they paint.

Switching gears, Ramspacher asks the group how political content could be presented in a more interesting way. "CliffsNotes," jokes the student. Before long, two pizzas arrive, and Ramspacher asks the women to write down ways they could make their opinions known to politicians. Nobody mentions voting.

Laybourne -- who three years ago spearheaded a media campaign encouraging women to run for political office -- is determined to pique the women's interest. She scribbles a note to Ramspacher, telling her to ask the women how they would react if politicians started talking about drafting young women, along with young men, for military service. As the women dig into their pizza, Laybourne checks her watch. She's late for another event. She slips out of the room and heads downstairs, handing Ramspacher the note before walking past the front desk to the elevator.

As they say at the network: Oh! These are good days, at last, for Oxygen. Viewership is way up, and nearly five years after launching its TV channel, the company recently reported its first quarterly profit. But that certainly isn't the result of trying to make better citizens of young women. It's more a matter of ceasing to do so -- via a business plan succinctly expressed by the show, and maybe just the title, Girls Behaving Badly. Is Laybourne, a schoolteacher turned TV exec turned TV entrepreneur, still struggling against that? For all her successes as a builder of hit shows and profitable cable channels, she has shown a persistent inclination toward wishful thinking about her audiences. Her high-mindedness (in TV terms, at least) is sometimes out of sync with the taste of her target audience -- which at Oxygen is women between 18 and 49 years of age -- and it's sometimes tripped her up. Laybourne is one entrepreneur who sometimes needs to be reminded to think inside the box.

When Laybourne formed Oxygen Media in 1998, the Lifetime Network had already been around for more than a decade and was the established leader in the women's category. But Laybourne wanted to challenge female viewers with a funnier, more sophisticated alternative to tearjerkers and stalker movies -- she was interested in what she often calls "smart fun." On an early program called Pure Oxygen, for example, she served up Maya Angelou reading poetry. On Exhale, Candace Bergen interviewed distinguished guests like Hillary Rodham Clinton and architect Frank Gehry in what Bergen once described as "mini courses." Laybourne was also determined to succeed at another first by linking the Oxygen television channel to the Internet, creating a kind of interactive megaportal chock-full of great information for women.

After launching its TV channel in early 2000, Oxygen had a hard time getting picked up by cable providers in major cities, and during that year its ambitious Web operation nearly collapsed. Laybourne is not the kind of person who refuses to acknowledge mistakes. "I was totally wrong about how we would get to smart fun," she says. "I thought it would be through the Internet." She blames the website debacle partly on the bankers who advised her. "They said, 'Build it and they will come," she recalls. Anyway, she observes, she never would have gotten so much seed money without the Internet component. "Like everything in life," she says, "it's been a blessing and a curse."

Laybourne describes the past few years as messy but instructive. "You learn a hell of a lot more from a mistake than an early success," she maintains. True, but, as she is starting to find out, success is a lot more fun. Last year, things finally started looking up. In December, the channel reached its original goal of being offered in 50 million of America's 80 million cable-watching homes by 2004. The network finally has a big presence in its hometown. Advertisers are taking notice. Now the trick is getting viewers to tune in.

By the time she founded Oxygen in the late 1990s, Laybourne was a superstar, best known for transforming the Nickelodeon network into must-see TV for kids. In that position, too, it took her a while to come down to the level of her audience. She offered up serious fare like a show about kids' dreams (think Pure Oxygen for eight-year-olds). After seven years of struggle, she came up with a hit. Through extensive research, including focus groups with children, Laybourne and her team discovered that kids loved game shows, from Wheel of Fortune to The Newlywed Game. So they created a game show for kids and by kids. Double Dare, which premiered in 1986, starred armor-clad children racing through obstacle courses and getting covered in green slime. It was brilliant, a vivid contrast to typical product-driven cartoons like My Little Pony and Gummi Bears. It was different, it was new, and it was what kids wanted. Laybourne soon solidified her standing with the launch of Nick at Nite and other hits like Rugrats, a cartoon about a ragtag group of kids out to unravel the mysteries of life, like where the light goes when the refrigerator door is closed.

Her early missteps all but forgotten, she was a hot commodity, and in 1995 she left Nickelodeon (then owned by Viacom) to work for archrival Disney, where she oversaw operations of a group of cable networks, including Lifetime. But halfway through her five-year agreement with Disney, Laybourne left. She had spent two decades creating brands and franchises, and now she wanted to strike out on her own.

The money came easily -- a reported $300 million in financing. "It was going to be an opportunity to be part of something great," Laybourne recalls. She touted a grand vision of the convergence of television and the information superhighway. This wouldn't be a regular old women's channel like Lifetime. This would be interactive, whatever that actually meant. The idea attracted big backers like Oprah Winfrey, Paul Allen, and co-founders Marcy Carsey, Tom Werner, and Caryn Mandabach, the team that created hits like The Cosby Show and Roseanne. (Laybourne won't say exactly how much of the company she or her various backers now own; she does say that her stake is less than 25%.) The Internet component of the business launched first, in 1998, and both that year and the next Laybourne was named the 20th most powerful woman in American business by Fortune magazine.

The business, however, was a wreck. "We were trying a million different things," she remembers. "It was a lot of mess." By the time Paul Allen threw in an additional $100 million in December 2000, less than a year after the launch of the Oxygen TV channel, the situation was dire, and it was understood that Oxygen was going to have to undergo a major restructuring. Almost immediately, Laybourne laid off 65 employees, about 10% of her work force, most of whom worked on Oxygen's Internet operations. Today, Oxygen's website is much like every other cable network's, offering basic information like show schedules and sweepstakes information.

The bottom might have been when Oprah, Laybourne's ace in the hole, seemed to be backing off. In exchange for a 25% founder's stake (she currently has a smaller stake, according to Oxygen), Winfrey had invested $20 million in Oxygen and agreed to allow the network to air reruns of The Oprah Winfrey Show. But in an April 2002 profile that appeared in Fortune, Winfrey seemed less than pleased with Oxygen. "It is an investment," she said, when asked if she was happy with it. She went on to express regret about handing over the rights to her show. That wasn't great news for Laybourne, whose celebrity backers were important to her network's cachet. She couldn't afford to alienate a key ally with an ugly contract dispute. So she quickly struck a compromise with Winfrey, who took back the rights to her reruns but agreed to provide footage from the half hour after her show, when she kicks off her heels and relaxes with her guests. She called it, simply, Oprah After the Show.

These days, any time you turn on Oxygen you'll see the target audience getting what it wants. On Snapped, for example, horny, homicidal twins plot to kill one twin's husband.

With Laybourne's reputation, and her network's future, hanging in the balance, she turned over significant creative control to Debby Beece, her head of programming and marketing. Beece, who had worked for Laybourne at Nickelodeon, overhauled the channel's lineup, which was clogged with two-hour blocks of bland informational shows. "I knew right away we needed to focus on entertainment," she says. She shortened Pure Oxygen and other information-based shows on her way to eventually phasing out most of them. Since the network couldn't afford to invest in original programming at that point, Beece searched for an affordable acquisition that would hint at Oxygen's new direction. "For her, it was getting in and figuring out what, if anything, was salvageable," Laybourne says. "It was getting out there, listening to focus groups, asking questions, listening to your consumers." After all that research, Beece finally decided to buy the rights to reruns of Universal Studios' Xena: Warrior Princess, a tongue-in-cheek show about a scantily clad, musclebound woman who slays evildoers. Laybourne liked the idea. "It was a good buy," she says. "It was available, and it was going to shake people up about what they thought we were."

Laybourne says the name Oxygen came to her in a dream. She woke up thinking that, as consumers and creative people, women were being shouted at. They needed a breath of fresh air. Today, Beece talks of "oxygenating" the network's programming. To oxygenate something, she explains, is to make it "bold, a little bit risque, with moments of funniness." To that end, Oxygen is plowing tens of millions into saucy new original programming in 2004. (Industry monitor

Kagan Research puts the figure for all programming at Oxygen at $113 million.) That's a sizeable investment for the network, which hasn't scored any outside financial help since late 2002, but it's still small potatoes compared with Lifetime, which is now co-owned by Disney and the Hearst Corp. and has committed $800 million to a rollout of original programming that began last year. Laybourne has a lot riding on her network's new lineup, which includes its first original sitcom, Good Girls Don't, about two roommates -- a tramp and a prude -- and Nice Package, a home makeover program starring two beefcake handymen with penchants for whiskey sours and tight T-shirts. Add to those a stable of popular Oxygen standbys like Girls Behaving Badly, a naughty hidden camera show, Absolutely Fabulous, an English comedy about an over-the-hill trollop and her best friend, and Talk Sex With Sue Johanson, in which Johanson, a Canadian grandmother, talks about such things as lesbian foreplay and genital piercing (while also giving lots of sensible advice about sex and relationships), and Laybourne has one libidinous lineup in the works.

If Laybourne is troubled by the occasionally lowbrow turn her once-brainy network has taken, she's not showing it. For the most part, she seems comfortable with the new spin. It's still smart fun, she maintains; it's just more entertaining. But she has moments of uncertainty. Last winter, for instance, Oxygen was preparing a show with the title My Best Friend Is a Big Fat Slut. In January, New York Post television critic Linda Stasi wrote about it in an article that featured a picture of Laybourne under the headline "A Big, Fat Slut by Any Other Name." Laybourne was obviously uncomfortable. The next month, in one of her bimonthly town hall meetings with her 220 employees, Laybourne announced she was switching the name to the much more innocuous Good Girls Don't. Not because of the Post article, she insisted, but because the name was "more Oxygen."

The new Oxygen is clearly stronger than the old: The channel's average number of daily viewers jumped 69% during the first quarter of 2004, compared with the same period last year. But that translated into just 56,000 viewers among the crucial 18- to 49-year-old women, compared with the 388,000 who tuned in to Lifetime. (That's still better than WE, which drew 34,000 viewers in the same category.) Laybourne needs to jump-start ratings, and to do that she is relying on Beece. So far, research confirms that women like jokes, especially jokes that have to do with sex. "Younger women are completely comfortable with humor about sex," says Laybourne, citing a survey of 1,849 women that the network commissioned and released last spring. The study reveals that women between 18 and 49 are just as likely as their male peers to think that sex and body parts can be funny. Focus groups give the same message. At a focus group about women and high-speed Internet access, for example, a stylish, young New York musician gave high marks to a commercial for Cox Communications because she thought the word Cox was funny.

These days, any time you turn on Oxygen you'll see the target audience getting what it wants. In an early episode of Good Girls Don't, for instance, Jane, the promiscuous roommate, pretends to be pregnant in order to seduce a prenatal male nurse she meets in the grocery store. And during the premiere episode of Snapped -- Oxygen's new true-crime documentary series about women on the edge of insanity -- horny, homicidal twins named Peggy and Betty plot to kill one twin's husband.

Viewership is way up, but that certainly isn't the result of trying to make better citizens of young women. It's more a matter of ceasing to do so.

Laybourne, on the other hand, is finally coming back from the edge. Chief operating officer Lisa Gersh Hall expects 2004 to be Oxygen's first profitable year, with revenue of $125 million, a 25% increase from last year. "It's only done positive things," says Andrew Donchin, director of national broadcasting at Carat USA, who buys $2 billion in ads (including some on Oxygen) for his clients each year. "It's in a decent amount of homes, and it's really trying to be a point of destination for women."

Donchin suggests, though, that Laybourne tread lightly when it comes to racy programming. Sexy storylines help set Oxygen apart from other women's channels and also make a mark on popular culture: It was a watershed moment for the channel when Saturday Night Live parodied Sue Johanson. But too much bawdiness could also scare off advertisers. "It's okay to push the envelope and be a little risque, but there's that line you can't go over," notes Donchin. "They've walked that tightrope pretty well." Recently, of course, programmers have been looking over their shoulders at the Federal Communications Commission, which has been on high alert ever since the Janet Jackson exposure episode. Laybourne says she isn't worried about the FCC. "Our motivation is not for pure shock value," she says. "It comes from what's right for our audience, so I don't think we're going to be a target on this."

Laybourne was briefed on the conclusion of her focus group on politics. On the tape, her note about the draft doesn't provoke much reaction. Things get a little livelier when Karen Ramspacher hands out pictures of an Urban Outfitters T-shirt emblazoned with the slogan, "Voting Is for Old People." She asks the participants to write down what they think about the shirt, and a few minutes later checks on their responses. "Basically, it's a true statement...I could be wrong, but that's kind of how I feel about it personally," says the fifth-grade teacher. Ramspacher asks the other women what they think. "The slogan shows that voting is just not popular," says the stay-at-home mom. "It's just not the thing to do. And like everyone else is saying... we're just very much into reality, and reality TV."

That inspires the college student. She might follow presidential politics, she says, if the campaign could include a reality show -- maybe George Bush and John Kerry sharing a loft for a week, with like five guys and five girls.

Is Laybourne going to try to defy that kind of sentiment? Sort of. Not through extended programming on politics, but she'll probably commission a series of quick, fun one-minute public service announcements about the importance of voting. "We must leave women better off than we found them," she says. Then she catches herself. "That doesn't mean we have to serve green vegetables and political forums. The problem with me is that when I talk about my mission, I sound deadly serious because I'm a former schoolmarm. I always have to interrupt myself and remind myself that I'm the woman who brought green slime to TV."

Nadine Heintz is a staff writer.

Last updated: Jul 1, 2004




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