Don’t ever dare suggest reality TV is nothing more than a passing fad to David Goldberg.
As president of Endemol Entertainment USA, Mr. Goldberg’s exploitation of the reality TV genre-most recently in the form of NBC’s breakout ratings hit “Fear Factor”-could be the springboard for expanding into the production of scripted series programming and new media ventures in the United States on behalf of Dutch-based parent company, Endemol Entertainment.
It’s an aggressive blueprint Mr. Goldberg is laying out, especially since the domestic unit was formed not quite two years ago and just recently established a presence on the U.S. networks with CBS’s “Big Brother” and NBC’s “Spy TV.”
“I don’t think anyone knows the exact staying power of reality programming, but we tend to view it as an alternative series market, where it offers us broader opportunities to build long-term franchises,” said Mr. Goldberg, who had previously served as a veteran production executive at Warner Bros.’ Telepictures unit and Quincy Jones Entertainment. “We just have to keep developing breakout formats and not be complacent about our position in this competitive marketplace.”
Certainly “Fear Factor,” which recently received a near-unheard-of advance order for 22 episodes for next season, is one of the key engines driving Endemol’s growth on these shores. Starting as a little-noticed summer 2001 entry and coming back after New Year’s as an integral 8 p.m.-to-9 p.m. anchor of NBC’s revitalized Monday night lineup, “Fear Factor” is estimated by Hollywood agency sources to have generated almost $15 million in network license fees for Endemol’s coffers alone.
And as Mr. Goldberg is quick to claim, “Fear Factor”-and other “cost-effective” reality series produced under the Endemol banner-don’t carry any production deficits.
“It is hard to foresee [reality] as being a deficit business, because the networks also know there is really very little back-end domestic market for alternative series, unless it has strong international appeal and can translate as a format to sell globally,” he said. “That’s why they’re willing to compensate more in front-end license fees.
“There are other countries where we might not have to worry as much about the negative value of a show, because [the license fee] could be cost-prohibitive in other territories,” he added. “The license fees paid by the U.S. networks are the highest in the world and are without a doubt the largest single contributing territory for our company. But in return, the networks here have certain expectations on us to maintain a high production value on these shows, which can mean dipping a bit more back into our own pockets.”
Expansion plans
In keeping with Endemol’s diversified media portfolio in Europe, including 17 territories where the company has format sales and production offices, Mr. Goldberg is formulating plans to use those assets and financial resources to give Endemol USA a presence in other media here.
While the new initiatives are only in their “exploratory stages,” Mr. Goldberg estimated that he could have several new divisions in place within the next six months to one year. “Our long-term goal is to expand our presence in the domestic marketplace and largely concentrate on [the] nonscripted [reality] arena, but it will likely have us branching out into scripted programming in the near future,” he added. “It could be kids live-action and animated programming, documentary programming for the cable networks, daytime programming for the broadcast networks and interactive/online programming for new media.”
At a time when independent production companies in the United States are becoming an endangered species in the face of an ever-consolidating corporate environment in this country, Mr. Goldberg has a professed notion to stay out of the scripted drama and comedy series arenas in prime time.
“I think anybody getting into the prime-time scripted business knows it’s risky and volatile,” Mr. Goldberg said. “We’re really not interested [in] getting into the deficit financing of series, because the upside is just not there in back-end as much as it is for the networks and major studios.”
Although most reality TV series have little or no shelf life in the back-end markets, Mr. Goldberg hasn’t ruled out a cable or broadcast syndication deal for “Fear Factor.” “When you look at `Fear Factor,’ it screams out `young demos,’ and the episodes are more self-contained, so it could have a domestic aftermarket, but we haven’t even got that far into production to make a decision on that,” Mr. Goldberg said.
Unlike the ongoing slide for most reality/alternative series, “Fear Factor’s” 5.9 rating/15 share average among the key adults 18 to 49 demo in five telecasts since Jan. 7 has improved its Monday time slot by 51 percent from what “Weakest Link” averaged season to date in the slot (3.9/10). During the current post-New Year run, “Fear Factor” has also put NBC in the winning column on the night in adults 18 to 49 (5.3 rating), improving the network’s position on the night by 36 percent over its previous season-to-date average (3.9 rating).
`Fear Factor’ and `Spy TV’ more than summer hits
“Fear Factor’s” current run has also improved 5 percent in adults 18 to 49 on its nine-week summer run (5.6/18), when there was very little original series competition. “The fact that `Fear Factor’ has grown each week in adults 18 to 34 and 18 to 49 gave us the confidence [to make a 22-episode advance order] in knowing that this was more than just a summer hit,” said Jeff Gaspin, NBC’s executive VP of alternative series.
Similarly, Mr. Gaspin said another Endemol show, “Spy TV,” improved NBC’s summer 2001 time periods in the key young-adult demos to merit an advance order of 15 new episodes for a return run in summer 2002.
“Fear Factor” and “Spy TV” came to NBC as part of a tradeoff, when NBC balked on taking Endemol’s first development series “Chains of Love,” which ended up running on UPN. Because NBC had a contractual commitment to license “Chains” at about $800,000 per episode, said sources close to NBC, Endemol applied the fees on a transfer basis to “Fear Factor” and “Spy TV.”
Mr. Gaspin said he and Mr. Goldberg are in the process of developing several other reality projects but declined to get specific on titles and content.
Mark Itkin, a leading alternative series packager for William Morris Agency, also declined to discuss specifics of his client’s projects in development with NBC. However, Mr. Itkin confirmed that Endemol has new development deals in place with MTV and USA Networks on cable, in addition to an untitled syndication project in the works with Sony-owned Columbia TriStar Domestic Television.
Endemol’s U.S. and international creative teams have also developed the new midseason UPN reality series “Under One Roof,” which will begin a seven-episode run in the 8 p.m.-to-9 p.m. Friday slot starting March 22.
“Under One Roof” features a group of five families who are whisked off to a secluded Fijian island to compete in a number of physical and mental challenges for the chance to win a luxurious beachfront home. Mr. Itkin said “Under One Roof” is unique because no other reality series focuses on families. “This could offer UPN a wholesome, all-family show with broad appeal,” he said.
On the flip side of family, Endemol is expected to get a third-season renewal for the coeds-locked-ina-house “Big Brother” series for a run this summer. If “Big Brother 3” gets a pickup from CBS, it would mean that Endemol will have placed more than a half-dozen reality series on the broadcast networks’ schedules since last spring-more than any other domestic reality supplier.
“We’d really like to take some credit domestically, but it is Jon de Mol who has created a brilliant business model globally,” Mr. Goldberg said. “From his foundation in the Netherlands, he has planted all of these formats in other territories-all of which funnel [revenue] back to Holland, which truly gives this international
company global reach and resources.”