When it was announced recently that the Oxygen Network had finally reached a deal to gain coverage in the New York market through Time Warner's cable system, the struggling women’s network had every reason to rejoice.
    But the fact that the deal comes a year after the network was launched, amid much fanfare, is a problematic one, as they say.
    In that year, Oxygen's presumed competitor, Lifetime, cranked up its efforts, and it has done so with such success that it now seems there's little chance that Oxygen will ever represent a significant challenge.
    At the least, it appears Oxygen will have a far harder time of it.
     “From a market perspective, they’re picking up a lot of homes. Finally the community that buys and sells media can see what the network is all about,” says Stacey Lynn Koerner, vice president of broadcast research at TN Media.
     The deal with Time Warner and similar deals will allow Oxygen to be in 42 million homes by the end of 2002, well beyond the 10 million homes it launched with and just a few million homes shy of the 50 million benchmark considered necessary for being a major cable network.
     But the year-long delay after Oxygen’s hyped debut in February 2000 cost the network much more than just the media-industry-heavy Gotham audience.
     For one thing, the delay squandered the good buzz generated at Oxygen’s launch by its numerous high-profile backers, Oprah Winfrey, Paul Allen, Geraldine Laybourne and Marcy Carsey, to name a few.
     Also, since the cable network has only been available in 10 to 15 million homes during the past year, most people interested in Oxygen had to settle for the web site. 
    And Oxygen’s online division has been plagued by negative press over the past year, as budgets were slashed, sites shut down, workers laid off, and offices closed.
     Not even an additional $100 million investment by Paul Allen’s Vulcan Ventures in December could keep Oxygen from closing its Seattle office, cutting 65 jobs and restructuring its web site to include only four of its original sites.
     That restructuring was in the wake of some high-profile staff departures in the fall, including the editor in chief Sarah Bartlett and executive producers Martha McCully, Marc Perton and Amy Critchett.
      But perhaps most devastatingly, Oxygen’s woes during the past year gave rival women’s network Lifetime a chance to strengthen its own position. While Oxygen foundered with its distribution and programming, Lifetime aggressively developed and promoted its own original series and movies.
      The strategy paid off for Lifetime, and not just relative to Oxygen. Lifetime finished first in primetime households during the first quarter of this year, reaching an average of nearly 1.6 million homes.
      That was up 21 percent from the first quarter of 2000, when Oxygen was launched and Lifetime averaged only 1.3 million homes. 
   Year to year, Lifetime’s average primetime rating was 18 percent higher in first quarter 2001 than first quarter 2000.
      So now that Oxygen has settled some of its distribution issues, it has even more to accomplish than it did a year ago before it can seriously pose a threat to Lifetime.
     Lifetime isn’t just the top women’s network anymore, it’s the top primetime network in all of basic cable.
     Illustrating just how far Oxygen has to go before it can compete with Lifetime is each network’s distribution. While Oxygen is currently in 14 million homes, which will become 24 million with the Time Warner deal and 42 million by the end of 2002, Lifetime already reaches 80 million homes, covering 79 percent of the country.
     That means it will be almost two years before Oxygen is the size that smaller cable networks like The Travel Channel or CMT are now.
     “As Lifetime becomes bigger and stronger, it’s going to make it that much harder,” says Shari Anne Brill, director of programming services at Carat. “What helped Lifetime is that they were able to invest in series that have done really well for them. If [Oxygen] has good competitive programming, at some point it could be a cheaper place to go for women.”
     To plan for that day, Oxygen has shifted its focus to include more entertainment programs during primetime. The network already has an animated series, a music program, and a documentary program. In the works for next year is a show hosted by former fashion designer Issac Mizrahi and a behind-the-scenes look at female police officers and firefighters.

April 11, 2001 © 2001 Media Life

-Elizabeth White is a staff writer for Media Life

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