Interview With Geraldine Laybourne

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L.G.: Well, according to the Microsoft investment, Facebook is worth $15 billion. I don't know what Ford Motor Co. is worth. Google, of course, its market cap is what-$200 billion or some crazy thing like that?

G.L.: So, you know, we did the right thing. We became the last analog channel. In fact, when we started, we joked that we'd be the last analog channel. We are the last analog channel. Ask any cable operator. There will be no more channels that get to 74 million homes. That's it. The door is shut. None of the big entertainment companies during the last nine years has built anything that's gotten to 74 million homes. Nothing. So I feel really good about it.

L.G.: What would be some of the lessons that you've learned from this journey?

G.L.: That focus is important. And for us to build a brand in a new medium—when we didn't have a brand in another medium—was too hard. And even when we were doing it, it was like, Man, if we had already built the television brand, this would not be so hard. But we were trying to build in two media simultaneously, and the two cultures were completely different. Now it's not so much. Now everybody's facile on the computer. Everybody communicates by email. But in those days, if you can remember back to those ancient days-

L.G.: I do remember the dialup. And I remember the mid-'90s is when I started using email, I think.

G.L.: I remember making a speech in a 1992, or a '93 budget presentation, about how my husband had discovered email, and it was the next best thing to sex. At which point it got misquoted as my husband saying it was better than sex—just to clear that up. But in any case, the technology folks on the internet side lived a different way from the television folks. They wanted to only communicate by email. They did not want any face-to-face communications. They put the most contentious things in emails, which is horrifying to me. It's like, Can't you pick up the phone and call somebody instead of copying 55 people? And I would have to institute rules like, "You may not put contentious things in email" and "We're going to be a civil company." And compensation was very different. The internet folks wanted stock, and the television people wanted salary. There were just so many different cultural things that we had to balance at once. So I would say that's the main lesson from it all. You know, my years in this business have been very consistent—about how you build a brand, how you listen to your consumers, how you bring them into the process. And there are so many more parallels behind what I learned at Nickelodeon and what I learned at Oxygen then dissimilarities.

L.G.: At the end of your tenure there, you had 270,000 prime-time weekday viewers, pretty much? You were in 74 million homes, and it was still analog, right?

G.L.: It's largely analog.... We built slower than other people because we wanted to get to the largest number of people. Many people who were starting cable networks in the late '90s took digital carriage. So those networks will never get to full distribution. We were very careful to not do deals where we were just offering digital. So we hung out there. We knew that if we just took digital, we'd never get to people.

L.G.: What happened with that model where you were asking the cable systems to pay you for them to carry you?

G.L.: Everybody gets paid. In the very beginning, because the cable operators wanted to wire America, they agreed to pay license fees to networks like Nickelodeon and MTV. And so those networks would have dual revenue streams-which meant that you could really afford to put some original programming on. So we started out with a model that we would get paid a license fee. Yes, cable operators were balking, because they saw their programming expenses going way up because of a few networks that were charging enormous amounts of money, like ESPN. But it's common practice that you get paid a fee in the cable universe. And we again hung out there to get the fee when I was at Disney—I went from Nickelodeon to Disney.

L.G.: Two unhappy years at Disney.

G.L.: Two spectacular years at Disney, where I learned a tremendous amount. And I have a tremendous amount of friends that I met there. But it was not for me. It was a mismatch. I had no idea what kind of an entrepreneur I was. I'd only had one real job, Nickelodeon. And the way that Viacom operated was a very sink-or-swim kind of philosophy. If you did well, Hey, be my guest! Keep on building! The number of questions I got asked when I was at Viacom, I think, was four questions the whole time I was there—because we always overdelivered. We had a 40 percent profit margin with 36 percent growth every year. So what question would you ask? Disney was the opposite. Disney had an army of strategic planners who had no real operational experience. And they felt like you could really determine a business through analysis and that numbers would really tell you what you should do. And that's how you should run your business. To me, strategic planning should be owned by the business head and not by a separate department that's a penal institution. There's a wonderful book by Malcolm Gladwell called Blink. I think it's a wonderful book because he validates things that I've thought for a long time.

L.G.: You don't need a lot of strategic planning to make a decision.

G.L.: Your gut is often better without a lot of analysis than it is with. You can prove anything through analysis.

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