What can we learn from NBC’s $925 million ($875 million net of cash) purchase of Oxygen? Online/offline synergy remains overrated.
Oxygen was launched in 2000 amid hype about “convergence.” In Oxygen’s case, this meant that the network wouldn’t just be a cable channel for women, but an online/TV hybrid, with a big web site that would feature its own television shows, among other attractions.
Those ambitions contracted along with the rest of Bubble 1.0, of course (with Oxygen far from the only victim). But while the notion of women-centric websites has worked out quite well for a host of players, Oxygen’s site, Oxygen.com, barely qualifies as an also-ran: In August it logged a mere 419,000 uniques, according to ComScore.
No wonder NBC doesn’t even bother to mention the site in its press release — or argue that there is much synergy potential between its iVillage site/network (a $600 million acquisition) and Oxygen. Instead, NBC takes great pains to point out what it is getting for its money: A fully distributed cable network with 74 million subs — meaning it paid a little less than $12 per sub.
Still, synergy or no, hats off to Geraldine Laybourne and the rest of the Oxygen team for building an $875 million network — in 7 years, and without the guidance and protection of a big media parent.