For the folks at celebrity gossip Web site TMZ.com, the image is everything if they get a grabby photo of Mickey Rourke’s booking mug or Britney Spears partying on Halloween night, they’ll write a story to go with it.
And they’ve found that it’s a formula for success and a formula that’s going to television in an unusual way.
Most media companies start with a magazine, newspaper or television show and build a complementary Web site. TMZ has the opposite challenge the hit Web site has launched a syndicated TV show.
And the Web site has been a clear hit. According to data from Comscore Networks, TMZ.com had 10.5 million unique visitors in September. The nearest competitor in the entertainment news category, PerezHilton.com, claimed only 3 million. In terms of page views, TMZ had an impressive 103 million, nearly double the 62 million of the Hilton site.
That traffic translates into money. Based on rates from a variety of media sources, the Business Journal estimates TMZ’s annual revenue at $36 million to $40 million which is significant for a site that’s less than 2 years old.
“It is the leading site in the entertainment news genre,” said Alyson Hyder, media director in the Los Angeles office of online agency Avenue A/Razorfish. “Their traffic far exceeds some of the traditional players in TV specifically the entertainment news sites like People.com, TVGuide.com and E online.”
Hyder estimates the traditional media-based sites only get about a third as much traffic as TMZ.com.
“There are a large number of advertisers wanting to align themselves with celebrity gossip,” confirmed Aaron Broder, chief executive of Gorilla Nation Media, an ad rep firm in Hollywood that sells space for a number of TMZ competitors. Most of the advertisers come from the entertainment, mobile telephony and consumer products categories, according to Broder.
The television version of TMZ.com debuted Sept. 10 on Fox stations. In Los Angeles it airs on KTTV-TV (Channel 11) at 5 p.m. Saturday. With 1.4 million viewers, TMZ got a 1.8 rating for the last week in October, making it the top new syndicated program this year.
Media entrepreneurs can learn lessons from the unconventional Web-to-TV evolution of the TMZ brand.
“The biggest is that a conventional media company can start a successful Internet business,” said Alan Citron, general manager of TMZ.com. “But you need a willingness to experiment.”
TMZ is a joint venture between AOL, Time Warner’s online division, and TelePictures, one of its TV production units. TMZ, located in offices on Sunset Boulevard in Hollywood, has about 100 employees who work on the Web site and TV show.
Citron called the TMZ Web site a work-in-progress during its first four months. “The folks at Telepictures and AOL allowed us to do that. We had the time to find the right balance,” he explained.
The TMZ team, including Managing Editor Harvey Levin, planned on a TV show from the beginning. Levin is a veteran newscaster and co-executive producer of “The People’s Court.”
“The proposition is unique and it’s an intelligent way to start a business,” said Michael Teicher, executive vice-president of sales at Warner Bros. Television Group. “Launching TV shows has become more challenging than ever, so developing a concept and nurturing an audience online makes a lot of sense. It’s a fairly inexpensive and relatively risk-free way to grow a brand. In this case, we hit a home run with TMZ.”
TMZ continues to pioneer in the way it sells advertising on its site, but even its sales organization works contrary to industry norms. Usually, media companies present advertisers with a package deal of broadcast, print or online advertising. In the case of TMZ, the online ads are sold by AOL and the television ads are sold by Warner Bros. Both are units of Time Warner Inc.
That division won’t last much longer. The company soon will sell ad packages for the TV show and Web site.
“We talk all the time about how good it would be to do packaged deals,” Citron said. “But that takes time.”
On the creative side, TMZ has pioneered the use of video advertising online. According to Jeffrey Rossi, a group director at MediaEdge: Cia ad agency, the TMZ site has lots of video, but most of it consists of clips 10 to 30 seconds long. Such brief content doesn’t lend itself to video ads, so the TMZ programmers only put ads on every third clip a viewer sees.
Hyder notes that though TMZ has a stable of professional cameramen, the video suggests user-generated content. That makes it a natural fit for Internet video consumers, but it presents a problem for advertisers who may not want their brand associated with paparazzi clips.
