Q&A: Gerry Laybourne

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Cable-industry insiders are wondering if lightning will strike twice for Geraldine
Laybourne: In other words, can she create a cable network that is as successful with women
as Nickelodeon is with kids?


Laybourne and her talented partners -- Oprah Winfrey and hit-TV producers Marcy
Carsey, Tom Werner and Caryn Mandabach -- are busy gearing up for next February's
Groundhog's Day launch of Oxygen, a women's network.


Laybourne, who built Nick into a children's juggernaut, left in late 1995 to become
president of Disney/ABC Cable Networks. But she found her desire to start up a new cable
venture couldn't be fulfilled at that media giant, and left in May 1998.
Laybourne
recruited her high-profile partners and financial backers such as Paul Allen, and now
Oxygen is ready to launch and continues to look for distribution.


Laybourne claims the network will meet the benchmarks
-- deals with other MSOs --
that AT&T Broadband & Internet Services set as a condition of its major carriage
agreement with the startup.


Oxygen's initial rollouts will be in markets such as Chicago, Denver, Dallas, Detroit,
Atlanta, San Francisco, Seattle and Pittsburgh.



Multichannel News editor in chief Marianne Paskowski and programming editor Linda Moss
recently interviewed Laybourne at Oxygen Media's bustling headquarters
-- where
a live show was underway
--in the trendy Chelsea section of New York, shortly
after Laybourne finished one of Oxygen's nationwide "Tank Tours." During the
interview, she discussed, among other things, the channel's program plans and its upcoming
Super Bowl ad. An edited transcript follows:

MCN: I've never seen a network launch that's had so
much press attention, and some would say, hype. It's a lot to live up to. What are you
thinking in terms of that? Again, the amount of coverage the network has received so far
is unprecedented.

GL: There's a good side to that and an uncomfortable
side. The good side is, it's enabled us to get just extraordinary people working with us.
And frankly, I wouldn't have tackled doing a cable network, another cable network, if I
hadn't had some pretty amazingly talented partners like Caryn Mandabach and Marcy Carsey
and Tom Werner and Oprah Winfrey, because what we are doing is unprecedented.

I mean, there have been all-original channels launched, but
they were largely news channels. And we're dealing with so many different program formats
-- anything from sports to animation to sketch comedy to magazine formats to teenage
programming -- so we're launching a lot of different kinds of things all at once.

And if it weren't for all of the exposure that we've had, I
don't think we would have gotten the kind of talent that we need. For animation, we got 40
proposals in a two-week period of time, and we selected 10 of them. In the early days of
Nickelodeon, we would spend two years trying to find anybody who would work with us.

MCN: So what's the downside, then?

GL: The downside is that people will turn it on Feb.
2 and say, 'Well, this isn't the Second Coming.' And we don't expect it to be the Second
Coming. We expect it to be a step in the right direction, and we think that we have all of
the right ingredients going in our favor: that women feel differently about themselves;
that technology is enabling us to be a brand that has two feet on the ground; and that we
get a chance to be a pioneer in a brand-new field.

That's the one thing that keeps amazing me in the press,
that they're not really understanding what it is we're trying to do. We're not trying to
be a television channel and we're not trying to be an online business. We're trying to get
ready for having a brand that really is the first completely converged plan.

MCN: What will be the exact percentage of original
programming you'll have going on the air now that 'Ka-Ching,' the finance block, has moved
from daytime? You have said that you would acquire some documentary series for that time
period. So most of Oxygen's programming will be original, but not all of it?

GL: We never, ever should have said it was 100
percent. We should have said it was going to be 98 percent original. And the documentaries
will be really fresh programming, because there has been no place for a collection of
women-made documentaries.

MCN: Have they aired before? Are they short films?

GL: Some of them will have aired before, and some of
them never. So, that is still in the works.

MCN: Is your programming budget now $400 million
over three years, or four years?

GL: Four years.

MCN: That sounds like a lot of money. But when you
come down to it, as you know better than anyone else, programming is very expensive to
produce. In a lump sum, it sounds like a lot, but to get a full-blown network off the
ground it doesn't sound so big.

GL: We couldn't have started Oxygen with this amount
of original programming five years ago. With the advent of digital technology, we're able
to produce things for much less than television companies that had to build an
infrastructure of elaborate production.

If I took you upstairs to see the animation studio, right
on site, we have people working with desktop animation that looks really cool, but costs a
fraction of what we used to pay when we first started Nickelodeon. There are just some
production economies that we're able to take advantage of.

Then, there's also the fact that we have the Internet sites
as marketing, casting, story idea vehicles. So it's hard to say, 'OK, they're spending
$400 million on television programming, how are they going to make a go of it?' Well,
we're spending another $100 million on our Web site.

MCN: So the $400 million does not include the Web
site?

GL: No. So we're also building content there. Having
been inside a bunch of different entertainment companies, what's normally has happened
with the Web and TV is that TV is the established medium, and the Web business is put in a
different building, or a different state, and it's either seen as a marketing vehicle or
it's a guerilla band that's trying to do their own creative content and it's kind of
competitive.

The model that we have here is that the Web-site folks and
the TV folks sit together in franchise management, so they are working in the same space,
sitting side by side and figuring out, 'What are you getting in your side that I can use
over here, and how can you connect people?' It's very collaborative.

MCN: This, then, is the converged model?

GL: Even though the TV set isn't converged yet,
we're trying to structure our company like a converged company. So [Oxygen president of
production] Geoffrey Darby is in charge of production and convergence, and Sarah Bartlett
is the editor in chief of both TV and Web.

MCN: You were talking about one medium pointing
viewers toward the other, and trying to integrate those things in a much tighter way than
we've really seen.

GL: That's exactly right, including just the way
that the television screen is designed. We're just trying to push in every way [including]
the way that the Web sites will be designed.

MCN: Everyone wants to know where you're going to be
in terms of distribution at launch. That's now the mantra for cable networks.

GL: The best guess is that we'll be at 8 million.

MCN: Have you met your AT&T benchmark?

GL: Virtually.

MCN: So that's not going to be a problem at launch?
Do you yet have a sense --from either Charter or AT&T or Media One -- what
markets you will be launching in come Feb. 2?

GL: We do. We have more detail on the AT&T
markets, and they are slightly over what they said would be. So that's great.

MCN: How many of the roughly 8 million homes will be
AT&T customers?

GL: Three point something.

MCN: Are they large markets, are they small markets?

GL: They're a mixture. But honestly this is not the
kind of thing that I really have at my fingertips. I know we're in Chicago [laughter].

MCN: You'd better be. Leo Hindery at AT&T was
one of your biggest fans and supporters, forever, and I saw in a story that you recently
had dinner with [AT&T chairman] Michael Armstrong and updated him on the channel's
progress. How supportive is he?

GL: I've known Mike for a long time.

MCN: Have you?

GL: I knew him from DirecTV [Corp.]. We have a very
nice relationship. But Leo, there will never be another Leo Hindery. He was a leader in
the industry and he recognized the value of this to the industry and Washington. He was a
big booster, and we will miss him.

MCN: You mentioned Direct TV. Are you working on
direct-broadcast satellite deals?

GL: Yes.

MCN: Do you expect to have more distribution deals
prior to launch?

GL: Yes.

MCN: So does the 8-million figure include those
additional deals, or is that 8 million…

GL: The 8 million is a conservative of where I think
we'll be.

MCN: Including DBS?

GL: Yeah.

MCN: Will you be getting distribution in New York or
Los Angeles? Those are such important markets in terms of advertisers and the media.

GL: Obviously they're important to us, and we're
trying to figure out how we can crack New York. You know, the biggest problem that we have
is that we have an economic proposition that is a realistic economic proposition for the
kind of caliber of service that we're providing, but isn't what the marketplace is used
to. Basically, ever since [News Corp. chairman] Rupert [Murdoch] came in with his $13 [per
subscriber] offer, there hasn't been any original content to speak of that's really been
of value. So what we have going for us is that the cable operator recognizes that they
don't have --

[Interruption as Laybourne's assistant pokes in and says,
"I just wanted to let you know that Jennifer Holliday is singing and they're about to
record, if you want to go over there."]

GL: Thank you. I'm sorry, where were we?

MCN: Your deals with operators.

GL: Right. Our deal with operators is not a
post-Murdoch deal.

MCN: Your license fee is roughly 20 cents or so,
right?

GL: Nineteen.

MCN: That's a little more expensive than Lifetime.
Operators have said, 'Well, that's pretty pricey for a new service.' What's your argument
when they say that to you?

GL: They know that they need better content for
women, more content for women.

MCN: Do they? A lot of those system executives are
men. Are they in tune with what you're trying to do? Some say they don't need another
women's network.

GL: The truth is that women -- ever since I've
been in this space, and talking about it -- I feel that there's much more dialogue
about the power of women in the economy. It's not just what we're saying, but everywhere.
If you look at what the 'dot-com' companies have brought to the party, they've done real
research on women. And now you hear men quoting all the time, 'Oh my God, 65 percent of
all automobiles are bought by women.'

So I get a lot of head nodding when we talk about the
economic power of women, and the cable-operator bills are being paid by women. So whether
they'll say it to our faces or a to reporter, they know. They live in the world. They
cannot miss it. It's a different world than when cable began, 20, how many years ago?
Twenty-five years ago.

MCN: At one point in your career you were looking at
Lifetime. Did you think Lifetime was serving the women's market?

GL: I thought Lifetime was serving a segment of the
women's market.

MCN: And which one was that?

GL: Serving a segment of women who want
entertainment that is drama-based. And to me, they get great ratings. They do really well,
but it isn't because they've created a lot of original programming. They've created some
original programming. And hopefully they'll create more.

But to me, the debate about whether or not there's room for
two women's services -- when women watch more television than men, but less cable
television than men -- when there are so many channels that really are programmed for
men, it's just ridiculous.

MCN: Some would argue that broadcasters already
serve that need and that advertisers are already reaching those female eyeballs.

GL: That's a big concern to cable. They should
really care whether or not women are loyal to cable, because if broadcasters are serving
them and that's where they're getting the majority of their viewing, cable operators
should pay big attention to that.

MCN: Broadly speaking, women make up more than 50
percent of the population. What's a thumbnail description of what Oxygen is going to be?
Is it going to be empowering, inspirational? Is it going to be a cable version of the Oprah
Winfrey Show
? Self-improvement?

GL: At the end of the day, if we get women saying,
'Boy, they understand me,' that will be what we want. But there's a certain amount of
Oxygen that is comedy-based, as you would expect, from Carsey-Werner-Mandabach, and me,
and a certain amount of it is heartfelt, as you would expect, because those are the
dimensions of a woman. A certain amount of it is really pragmatic.

I think of Pure Oxygen, our live daily show, and
it'll actually air twice. It will air once as a live show, and its primary airing will be
in primetime. It's like the model of the multi-tasking woman. You think about all the hats
you wear, and all the things you integrate into your life. That's what Pure Oxygen
is.

MCN: So that will include…

GL: It's health. It's parenting. It's style. It's
politics.

MCN: It's information-based?

GL: It's information-based, but we've got music
going on right here. So there's a music base. It's fun. It's lively. What's missing for me
in a lot of communications with women is the community aspect. Give me stuff that I can
really relate to. Give me stuff that's from real women who are passionate about something.
Don't just have anchors sitting there interviewing experts. Apply it to my world.

MCN: Is Oxygen a niche channel? It's such a broad
audience, and a diverse audience.

GL: We're going to have plenty of people watching.
And we'll have men watching. They're going to be fascinated to see what a bunch of rowdy
women put on. (Laughter.) I don't think it's a niche audience. It is going to skew for
women who are leaning into their lives, and it will skew for women who…

MCN: What does that mean, 'leaning into your lives'?

GL: That means that they're taking charge, like,
'Hey, I'm hungry for information. I'm hungry for connection.' When you go into a focus
group for women who are online users, it's really amazing. You'll go into a group of
mothers with small children at home and they don't talk the way I did when my kids were
small and I was at home. I was so hungry to be a part of the world.

These women are on their way someplace. They're connected.
They may be pursuing their hobbies. They're learning about art history, or they're
figuring out what their next job is going to be, but they don't feel so isolated. And
that's the kind of energy we're trying to tap into.

MCN: You say the Oxygen partners get to do what they
always wanted to do? So what are you getting to do?

GL: I really want to build a business that is
respectful of women, that really helps them, that really connects with them and that
really is a successful business so that it can never be taken away. And I want to be able
to have a work environment where people are passionate about making a difference for the
audience.

Because we come out of big entertainment, people don't
quite know what to make of us. We are The Little Engine that Could. We are not a
big entertainment company that is wanting another channel. We're building something from
scratch, so for me the real joy is, 'Can we get enough people who really want to make a
difference, joined together, moving in the same direction, and build a great business?'

MCN: Realistically speaking, are you looking to
build franchises. Are you looking for a 'hit?' When you start from scratch with 8 millions
subscribers, can you have a hit with that small level of distribution, even if you have
the most unbelievable show in the world?

GL: I've always been of the school that I do not
want to create hits, which is an idiot thing to say. It's not about that. If your
orientation is you have to have hits, then you're so ruthless that you're not building.
You're not moving with your audience. You're not trying new things.

I actually did have a consultant once say that to me: 'The
thing that's wrong with Nickelodeon is that you don't try to produce hits.' And I said if
we had set out to do that, we would have bought the Hanna-Barbera library, we would have
taken sure-fire steps. We never would have tried to change the face of children's
television. And it's much more important to us that at the end of the day, women say,
'They really understand me. I am loyal to them, and they are loyal to me.' But what do I
really believe? That's what leads to hits.

And that's certainly the philosophy that Geoffrey Darby and
I lived with at Nickelodeon. We never had the undisciplined 'Let's just have a million
pilots and then see what works,' and just cross our fingers. Double Dare we did
seven times before we got it right.

MCN: Where you surprised when Time Warner announced
it was going to create a women's network and so quickly backed down?

GL: My mother called me the day that they backed
down and she said, 'Oh, how are your investors doing?' I said, 'Fine, Mom, what are you
talking about?' And she said, 'Well, that's just such bad news.' [Laughter.]

I said, 'What are you talking about?' She said, 'They said
it wasn't a big business proposition.' I thought that was great. I said, 'Mom, believe me,
you can sleep tonight.'

I'm not surprised. I think it would be very hard to do what
we're doing inside an entertainment company, which is why we're not. Because we have
investors who believe in the future. We're not reporting on quarterly earnings to an
anxious stock market. And the big media companies have a harder time launching something
that's as expensive as this. I don't think they [Time Warner] had a complete business plan
when they went out. And I think once we'd committed to so much original production, they
sort of had to. I completely understand it. It doesn't make sense, if you're an existing
media company, to launch this kind of enterprise.

MCN: You referred to this company as 'the littlest
engine that could.'

GL: Not 'the littlest,' but 'the little.'
[Laughter.]

MCN: I was going to say, this is interesting because
you had come from two conglomerates -- Viacom, Disney. You could not do this in
Disney? Is that what you're saying?

GL: I couldn't do this at Disney for a couple of
reasons. One was the one I just mentioned. Economically, it doesn't make sense for these
big entertainment companies to start things from scratch with these kinds of business
plans. I wrote at least seven business plans while I was at Disney. And even I didn't
approve my own business plans. [Laughter.]

But that's because it had to fit in the context of the ABC
performance inside that unit, and at a time when networks were having a very big decrease
in their profitability, it was hard to imagine how a company would step up to this kind of
investment.

MCN: Are you going to do an initial public offering?

GL: There will be some type of liquidity event, just
because all of our staff are working at much less pay than they would have if they were
staying in traditional media companies.

MCN: Your ads are very funny and I've had people
comment to me about them. Is that, though, just the beginning of a teaser campaign?

GL: Yes.

MCN: Because I've had people say, 'You know, they're
really great, but what the hell is Oxygen?' Is that the whole point of the campaign, for
people to be asking, 'What is Oxygen?'

GL: The whole point with something like that is to
see if we can create something that is participatory. We have people who are coming on the
site and adding their reasons [why it's great to be a woman]. We -- I -- confess
to low-hanging fruit: 'First in the lifeboats.'; 'No back hair.' It was a way to just get
people to smile. And we hoped that it would be a way to say to men, 'We like you. We're
not hostile.' But the Super Bowl spot is going to be amazing.

MCN: Thirty seconds?

GL: Uh huh. The process of that was really
fascinating. Because we could be arrested for cruelty … maybe I should do this off
the record. [Laughter]. But I wanted Oprah and Marcy and Caryn and Tom to all hear the
Super Bowl pitch simultaneously with me and our creative team in New York. So we had our
agency come down and pitch three concepts for the Super Bowl. And this just eliminated all
the second-guessing: 'What will Oprah like? What will Marcy like? What will Gerry like?'
We all heard it at the same time.

There were three ideas. I've never had a bigger migraine
headache. And it was fabulous because the first spot they laid out -- I knew, thank
God, we could do this spot. This spot is do-able, this spot was funny, and that would be a
fine Super Bowl spot. So then I just melted. But then the second one was cooler than the
first one, and by the third one -- we had a rule that nobody was allowed to comment on
them by the third one they were hooting and howling.

MCN: Can you tell us anything about them?

GL: It would be wrong. It would be wrong.

MCN: How far along are you in terms of finalizing
the programming lineup? To what extent is it still in flux?

GL: It's probably 82 percent locked. And that we'll
have 18 percent of it at the last minute we'll decide, 'You know what, we should really
delay the launch of X.' We are very disciplined at this point. We have hundreds of people
writing us, sending us pictures. They track me down in restaurants. They have somehow
gotten my home address. I get packages of things, flowers, you know, anything.

MCN: What can you say about the merger of the
personal finance block, 'Ka-Ching,' into primetime.

GL: This is a very personal thing for me, because I
had it in my head that you could run a noon-time finance show, and that you could get
people at lunchtime. There is absolutely no precedent for that and there's no indication
that that would ever happen.

MCN: In other words, people would tune in from their
jobs?

GL: Right. And the truth is, we should be
programming 'Ka-Ching' the Web site, better to get the people at their desks. But when we
started to see how much money we were spending on that versus something we were going to
be sure that we had an available audience for, it was, wait a second. Let's continue to
produce Ka-Ching the segments, but let's put it inside Pure Oxygen so that there's
a chance that somebody's going to see it.

The interesting thing to me is that that's even a story.
Any new network this far out -- and we made the decision about Ka-Ching two months ago
-- and that's to me what you should be doing. You should be trying things, seeing what
surfaces in the way of the program ideas, and then evaluate. It is a large amount of money
that we're spending, but we're really careful about how we're spending it.

MCN: Your daytime lineup, how could you describe it?
You'll have some of these documentary series that you mentioned before, in the afternoon
it will be teens, right? And in the morning, you'll have a morning show?

GL: Morning will have Inhale, which is a yoga
show. Yoga to modern music, not sitar music. And it's a very pragmatic, good way to start
the day.

MCN: Not boxing?

GL: Well, there are many sides to all of
us…[laughter] I do yoga and I box. We will have boxing, I'm sure, with Lydia
Stephans
and We Sweat.

The premise is that we need … to create some important
franchises that are going to put us on the map. So Trackers is one, with teenage
girls. Because our feeling is that there is no place where teenage girls can get smart,
reality-oriented programming.

MCN: That will be in which time period?

GL: It will be 4 to 6.

MCN: Could you describe it?

GL: It's named Trackers, and the notion is
that they're all tracking each other and popular culture, and they're tracking boys. They
have a guy-spy camera, where they actually get to hear boys talk to each other, which I
think would be fascinating.

MCN: What are the most likely franchises that you
see…

GL:Trackers, Pure Oxygen, Oxygen.comedy.
I think we might have changed the name of Oxygen.comedy to the Oxygen Tent,
but I'm not sure about that change, so don't hold me to that.

MCN: Your comedy block is running from 6 p.m. to 8
p.m. In terms of programming decisions, there are a lot of off-network sitcoms on at that
time. Why do you think there's an opening there?

GL: Carsey-Werner-Mandabach had always eyed the
6-to-8 time period as, 'Boy, we would love to get our hands on that,' because there are
either game shows, news or reruns, and we would love to have the ability to have original
content that's funny. They just have always wanted to do that. One of the rules we have is
that if the partners have always wanted to do something…

MCN: They get to do it?

GL: They get to do it. Like Oprah's show on Sunday
night. It's called Oprah &, and she's been on for 13 years in a show that has a
pretty fixed requirement in terms of time and format. She makes changes over that period
of time, but even so, she is living within the rules. So the rule for the show called Oprah& is that she can do whatever she wants.

MCN: Do you think Oprah will be a franchise,
also?

GL: I think it will be. She's already shot Oprah
Goes Online
, which philosophically is a hugely important franchise for us.

MCN: Is that 10-, 15- or 20-minute segments?

GL: She's doing half-hours. I just saw the first
rushes of it, you saw where she's typing. She and her friend Gail tackle the Internet.
Young, brilliant. And they had two teachers, and they are just on an adventure. And now
Oprah e-mails, and she's really a Web lover.

MCN: Will that be weekly?

GL: Initially we will run Oprah Goes Online
on the Oprah & slot on Sunday nights. We will air Oprah & later in
the year.

MCN: What about the Candice Bergen show?

GL: That is 10 every night, called Exhale.
Scott Carter, from Politically Incorrect, is producing it. I'm on my way to
California tomorrow morning to catch up on all our L.A.-based productions. We've got two
game shows in production out there, sketch comedy and a sketch show; and I'm going to see
actually the first taping of Pajama Party, which is Katie Puckrik's late-night
show. Carsey-Werner-Mandabach are in charge of programming. We couldn't be doing this if
they weren't in charge of programming.

MCN: What does Exhale do for Oxygen?

GL: It's called Exhale for a reason. At 10 at
night, we have this spectacular woman who's curious about so many different subjects. And
she gets to kick back and talk to really interesting people. I hope that we bring
conversation back to women.

MCN: But then it's such a tough time period. The
marquee broadcast shows -- ER, Law & Order -- air at 10. Go down the
list.

GL: We're not setting out to beat ER. That's
not what we think is going to happen. We're an alternative. And that's what we do in the
programming industry: What can we offer at 10 that would appeal to an audience that isn't
going to want to watch ER?

MCN: Speaking of hits, what kind of hits are you
getting on your Web site with the relaunch?

GL: You should get the latest from Dan [Orum, senior
vice president of operations], because yesterday we hit an all-time high. But in the first
week we had like gotten four times as many hits as we had ever gotten. So it's working.
We're getting the attention we had hoped for.

MCN: What part does electronic commerce play,
between the programming and the Web site?

GL: We want it to play an important role. But we're
sort of looking at it from an end-to-end situation, although we do have some projects like
Women's Hands, which is a terrific Web site where we have product that's made by artisans
all over the world. It's the perfect converged idea. Because we do documentaries of these
women at work, telling their stories about their lives, and then we offer their products
on the web site.

MCN: On your Web site?

GL: On the Women's Hands web site. So it's part of
trying to create an economic base for people that are making great stuff. We believe we
can make a great economic difference for these women. So we are doing some things like
that.

But the big picture is, 'How do we help women in their most
important job, which is chief purchasing agent?' That's what their biggest job is, it just
is. Some of it is 'have to buy' and some of it is 'want to buy.'

Oprah Goes Online will deal with e-commerce somewhat
and will give women the comfort about going online. We will have a part of the Web site
that actually gives a tutorial, so you can take a tutorial of how to go online, when
you're online. There are lots of things that some women just don't do.

Then on the weekend, we have this e-commerce slot that will
be the integration of how do we get information on the Web about product, whether it's
from users or from personalities that we've cast who represent different types of women
who go out on the Web and shop and find cool things to do.

MCN: When will you wind up being metered by Nielsen?
Are potential advertisers saying, 'What are you going to do in terms of ratings, or what
are you offering them as a yardstick as to how the channel is going to performs'?'

GL: They understand that as you're building your
subscribership, you don't have the same kinds of metering, but we do have to do
coincidentals. We do have to have some ways of measuring what's going on. But we're kind
of interesting to advertisers, because we are trying to figure out a different
relationship with them. So we're trying to figure out how to get them on the web side
learning how to provide services to our audience that they get credit for so they're
building a relationship with our users, and we're trying to carry that over to television,
as well.

MCN: Is there anything that you'd like to bring up?

GL: There is an amazing amount of good will on the
part of women for what we're trying to do, which is really gratifying to me. It's part of
why we can do a woman's network today, whereas I think it would have been harder to do it
20 years ago, or even 10 years ago.

MCN: Why would have been harder, since it was the
height of the feminist movement 10 years ago?

GL: It was like a lightning rod. And what I find now
is that, man, if you get to fulfillment out of being at home with your kids, God bless
you. If you get fulfillment working out of your home, God bless you. And so that's why I
think we're going to tack the right cord.

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