NBC Universal’s plans to buy Oxygen Media for $975 million is part of an ongoing trend of large content owners acquiring successful and demographically-focused independent channels to strengthen their offerings and quickly add to their bottom lines.
Seven-year-old Oxygen Media has become a big hit with the female demographic, which opens the door for NBC Universal to cash in – and expand – the independent’s advertising base, as content owners focus on the distribution they know (wireline) ahead of the net and wireless.
This mega-deal is the latest for service providers paying big bucks for stakes on companies owning premium content and pulling in equally impressive ad revenue. Sports and entertainment content assets have been among the most highly coveted.
Comcast Corp. said in late April it will buy Cablevision subsidiary Rainbow Media’s 60 percent interest in FSN Bay Area and its 50 percent stake in FSN New England for an estimated $570 million in cash. The deal will give Comcast 100 percent control of FSN New England and 60 percent of FSN Bay Area. Comcast will operate both networks.
Nearly a year ago, Comcast acquired, for $1.23 billion, Disney's 39.5 percent ownership stake in E! Networks. E! Networks, which includes E! Entertainment Television and Style Network, became a wholly owned Comcast entity.
Another likely target is Big Ten Network, an independent whose content covers all major sports contests that include colleges from the Big Ten conference. AT&T, Verizon and others have quickly signed carriage deals with the fledgling net.
“The likely reason is that the networks are finding that the multiplicity of channel choices is diluting their main network offerings, and so they’re moving out into other cable channels that would expand their reach in key demographics,” Tom Nolle, president of CIMI Corp., said of the latest deal.
The female audience is a large one. “Certainly, the female can create ad symbiosis between Oxygen and their main network, as well as benefit directly from ad sales on Oxygen,” added Nolle.
Oxygen is currently available in over 74 million homes. The network was launched in 2000 to fill a void in the television landscape – creating a network targeted to younger women. Oxygen is rewriting the rulebook for women's television, with vast array of unconventional and original programming including “The Janice Dickinson Modeling Agency,” “The Bad Girls Club,” “Tori & Dean: Inn Love” and “Campus Ladies.”
Through programs like “The Mentor's Walk,” Oxygen's national program for bringing along the next generation, and "Who Cares About Girls," Oxygen's new documentary series – Oxygen said it is creating The New Girls Network.
NBC Universal is one of the world's largest media and entertainment companies in the development, production, and marketing of entertainment, news, and information to a global audience. Formed in May 2004 through the combining of NBC and Vivendi Universal Entertainment, NBC Universal owns and operates news and entertainment networks, a motion picture company, significant television production operations and a television stations unit. NBC Universal is 80 percent owned by General Electric and 20 percent owned by Vivendi.
NBC Universal www.nbcuni.com
Oxygen Media www.oxygen.com
