Trash TV Is Going Global

Telefónica-Endemol will give Big Brother worldwide exposure

Quel scandal! On May 12, police needed tear gas to beat back a mob trying to break into a television studio north of Paris where the hot new reality-TV series Loft Story is produced. Earlier, about 250 people dumped garbage in front of the broadcaster's office to protest "trash TV." Loft Story features a group of scantily clad young men and women living and loving for 10 weeks in a loft: Cameras record their every move, from showers to torrid sex. The French government has warned that the show could "undermine human dignity." But sex sells. France's version of the Dutch show Big Brother, which helped start the reality-TV craze in 1999, has broken audience records. An estimated 52% of French viewers tuned into at least one of the daily broadcasts during the first week.

Chalk up another controversial success for one of Europe's fastest-growing TV producers, Endemol Entertainment. Since Spain's Telefónica bought the Dutch company in March, 2000, it has jumped from country to country with its Big Brother formula. Revenues soared 57% last year, to $468 million, with profits of $47 million.

Endemol's success is unique in Europe, where producers have been small and local. Endemol leaps these borders by developing program concepts in its Dutch headquarters and then adapting them to local markets. In addition to Big Brother, it's been behind the popular All You Need is Love, the Soundmix show and 400 other concepts. "We are not a one-trick pony," says John de Mol, Endemol's founder and CEO.

A LETDOWN. Endemol has a strong partner in Spain's Telefónica (TEF ), which provides the capital and contacts to expand globally. Endemol bought an Argentine producer last year and soon will set up shop in Brazil and Mexico. A U.S. edition of Big Brother was a ratings disappointment last summer, but CBS plans to air a new edition. De Mol spends one week a month in Los Angeles, trying to build Endemol into a Hollywood player. "Endemol is our content flagship, permitting us to enter markets where we otherwise would not be," says Carlos Chaguaceda, Telefónica Media's spokesman.

But the Telefónica link isn't paying off in all areas. The collapse of the telecom sector makes it harder to squeeze synergies between telephones and TV via the Net. "Endemol hoped the Telefónica deal would let it play the convergence card, and that idea has gone out of fashion," says Wijnand Heineken, an analyst at Amsterdam's Bank Labouchère. Telefónica paid $5.5 billion for Endemol just before technology stocks crashed.

De Mol insists the tie-ins are working. Big Brother shows are available 24 hours a day on satellite TV and on the Internet. Viewers get to vote weekly on eliminating one of the contestants. For the first round of voting on Loft Story--viewers get to decide who stays on the cast--3.7 million people paid about 50 cents each to vote by phone or instant cell-phone messages. More than 1 million people have visited the Loft Story Web site since the end of April, a juicy advertising opportunity. "When you use television to trigger the Internet, it can be very profitable," says de Mol, who declines to give actual figures.

Expect Endemol to begin pushing more Big Brother takeoffs. A new version of the show, contrasting life in a luxury apartment with one in a working-class building, will premier soon in the Netherlands, and de Mol says "it could prolong the Big Brother concept for three or four more years." Already, Endemol has begun testing new formats in the same genre such as Big Diet and Starmaker, challenging contestants to lose weight or choosing one to become a pop star. And soon de Mol begins filming in Portugal what he thinks will be his next big global hit--Blind Faith. It splits up couples and tests their commitment to each other by showing scenes of their partner in compromising positions. High-brow fare it's not. But de Mol's trash is popular--and profitable.

By William Echikson in Brussels, with Carol Matlack in Paris and bureau reports

— With assistance by Carol Matlack

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