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TMZ's $55 Million Brand: Moving Far Beyond The 30-Mile Zone

Expansions include TMZ Sports, MomLogic, 'Famous in 12' and even, yes—'TMZ, the Musical' 8/12/2013 12:01:00 AM Eastern

TMZ Timeline: If There's Bad Celebrity News, TMZ Is There To Break It

Nov. 8, 2005: TMZ.com debuts.

July 28, 2006: TMZ.com breaks the story that Mel Gibson went on an anti-Semitic tirade after being arrested for driving under the influence.

Nov. 20, 2006: Video goes live of Seinfeld’s Michael Richards going on racist rant at Hollywood’s The Laugh Factory.

September 10, 2007: TMZ on TV premieres in national syndication.

January 22, 2008: TMZ is first to report the death of Heath Ledger.

June 25, 2009: TMZ breaks the story that pop legend Michael Jackson died at the age of 50.

Dec. 20, 2009: TMZ breaks the story of the death of actress Brittany Murphy.

March 2012: Fox launches tests of TMZ Live in Los Angeles and Phoenix.

October 2012: Fox adds five markets—Boston, Chicago, Dallas, Detroit and Minneapolis—to TMZ Live test.

Sept. 9, 2013: TMZ Live is to premiere on 18 Fox-owned TV stations. —PA

palbiniak@gmail.com | @PaigeA

When TMZ executive producer Harvey Levin and his team heard
that Mel Gibson had been arrested in the wee hours of July 28, 2006, hey did what all newshounds do:
They started working the phones.

Why This Matters
TMZ launched an efficient and disruptive business that many aim to emulate, and its brash brand is only getting bigger, bolder and more profitable.

 

“The police told us that the
arrest was without incident, but
we started getting tips and making
calls,” says Levin. “We were
told that he went on an anti-
Semitic rant, but the police said
that was ‘absolutely untrue. You
will destroy the operation if you put that up
on your website, because it’s false.’ We knew
we needed to get the goods.”

At that point, many reporters would believe
the police and stop pushing. But Levin,
a news veteran with a legal background who
had covered Los Angeles for outlets such as
KNBC and KCBS since 1978, sensed there
was more. And TMZ wasn’t limited to the
smaller scope of sources tapped by traditional
outlets. In TMZ Land, a valet and a CEO are
equal, with both capable of generating clickable
news. In the case of Gibson, the goods
didn’t come from a disaffected waiter leaking
embarrassing dish about a low-tipping star. It
came from the same source others had not
listened quite so closely to.

“I made a phone call to
one of the police officers who
had arrested Mel, and I told
this person what I knew,” says
Levin. “There was just enough
of a pause and a tiny nervous
laugh. I listened to that, and it
was very subtle, but I heard it:
This person is not telling me the truth. It was
that moment that made me think, ‘I’m getting
stonewalled on this story.’

“When you ask questions, the answer you
get and the way you get the answer matters.
We pushed and pushed and pushed. Obviously
we had good sources, but finally we
got the report. The police department was
crazed trying to figure out who gave it to me.
I learned later that they actually seized my
telephone records.”

The mega-scoop did more than send the
career of an A-list star into a tailspin. It cemented
TMZ’s reputation for combining
sheer hustle with digital expediency, sharp
elbows, tough skin and mordant wit.

Let Your Contents Be Your Guide

In the years since, TMZ, which opened
shop on the Web in late 2005, has grown into
a content brand without direct peer—loathed
and imitated in equal measure, destabilizing
traditional businesses and celebrating its own
disruptive DNA at every step. Once a feisty
little URL, it is now a $55 million force that
includes the core website, a syndicated TV
show, live tours and ruthlessly cost-effective
extensions in various stages (including, God
help us all, a musical).

TMZ routinely breaks major entertainment
stories, but it is deliberately not chasing Peabodys
or Pulitzers. The majority of its content
is celebrity silliness, with “celebrity” often
applied only in the loosest of ways. Chronic,
public stumbles by the likes of Lindsay Lohan,
Amanda Bynes and Britney Spears provide
constant fodder for the site and the TV show,
and lately so have Simon Cowell’s baby mama
drama and Justin Bieber’s alleged penchant
for spitting on fans.

That the mainstream media doesn’t fully
trust TMZ was proven when no one picked up
TMZ’s huge scoop that Michael Jackson had
died in 2009 until more traditional organizations
such as CNN and The Los Angeles Times confirmed it, and found, per usual, that TMZ
was on the money.

Levin & Co. long ago stopped caring what
traditional media dislikes about TMZ—and in
fact, riding that line between high and low, and
getting tips from a wide array of parties is what
drives its profits.

In total, TMZ’s revenue is north of $55 million
annually, according to sources. The TV
show, which is the profit center, and its websites
cost relatively little to produce.

That’s why there’s soon going to be a
lot more TMZ. By the end of this year, two new
sites—TMZ Sports and a revamped MomLogic—
will join TMZ’s other Web spinoffs TooFab.com, which focuses on red-carpets, fashion and
awards shows; and Fishwrapper.com, an opinionated
blog on all things celeb. Levin plans to
quickly expand TMZ Sports to other platforms.

A reality show, Famous in 12, coproduced
by Renegade 83, will premiere on The CW next
March. TMZ and Renegade have found a family
who will participate in a 12-week experiment
to see if they can become famous, using all the
tricks of the Hollywood PR trade, including frequent
appearances on TMZ.

“There was no one better to go to with this
than Harvey,” says Jay Renfroe, executive producer
at Renegade 83, “He immediately got
what we were doing and ran with it.”

The chat show TMZ Live, which has been
incubated on the Web for three years and
tested on select Fox stations, premieres on
Fox- owned stations in September and should
be cleared on TV stations across the country
next fall. Radio versions of TMZ air on Sirius
XM Satellite Radio and one-minute vignettes
are syndicated on the Premiere Radio Network.
The staff also is currently creating TMZ
UK
, which will air across the pond and be
tailored to a British audience.

There’s more—both Los Angeles and New
York host a TMZ Tour, in which a TMZ-branded
tour bus and a TMZ host take tourists around
the city, showing them celebrity places of interest.
Levin even plans to launch a TMZ musical,
aiming for Book of Mormon territory.

Ultimately, Levin would like TMZ to operate like a studio, creating, developing and selling
its branded products across entertainment
platforms. In April, the whole outfit moved
from 8000 Sunset Blvd. in West Hollywood
to a new production facility on West Jefferson
Avenue in Los Angeles’ Playa Vista (the
vast marshlands where Howard Hughes once
housed his huge prototype “Spruce Goose”
aircraft). There, Levin says TMZ will have the
space it needs to grow and deploy the technology
it needs to get there.

The Scoop on Those Scoops

All of this action springs from a daily pitch
meeting—featuring plenty of jokes sprinkled
between pitches—that starts around 6:45
a.m. and wraps before 9 a.m. Levin hangs
over a cubicle wall in TMZ’s new red-andblack-
accented facility, with a high-tech glass
whiteboard behind him. Occasionally, he
writes on it in neon pen, but he spends most
of the two hours bantering with his young
jeans-and-baseball-cap-clad staff.

“I believe that the newsgathering and the
website is the gasoline that drives this car,”
says Mike Walters, TMZ news director and
coexecutive producer of TMZ Live. “It starts
with a seed in the newsroom, and parts of it
end up being items we use on all of the different
outlets.”

That TMZ breaks so many of the biggest
entertainment stories, such as Gibson in
2006, Heath Ledger’s death in 2008, Michael
Jackson’s passing in 2009 and many more,
has many reporters scratching their heads.
How do they do it? What’s the magic? Do
they pay for stories?

According to team TMZ, the formula for
that magic—as with Levin pouncing on that
Malibu cop’s nervous laugh about Gibson—is
simply hard work.

“When everyone else stops at making 10
phone calls, we make 100,” says executive
producer Evan Rosenblum. “We just keep
digging and digging.”

As for the common accusation that TMZ
pays for tips, “I have no problem paying for
tips,” shrugs Levin, “but we hardly do it at all.
If someone calls and says, ‘I have gone through
court files in a certain city and there’s a big lawsuit
in which you’d be interested,’ I don’t mind
paying them for their work. But we have to
verify every story that we do.

“We absolutely will not pay for interviews,
however,” he continues. “When you pay for
an interview, you are telling someone to goose
it, to say something salacious, even if what
they are saying is not true. A lot of traditional
network news operations will pay someone
$100,000 for things like a picture or a photo
album, but what they are really paying for is an
interview. When you do that, how do you know
what’s coming out of their mouth is true?”

Taking TMZ to TV

By 2006, it was clear that the time had
come to take TMZ to the next level.

Late in the year, Hilary Estey McLoughlin,
president of Telepictures, called Levin and said,
“‘Good news! Fox just bought the TV show.’”

“And I said, ‘Oh great,’” recalls Levin. “Hilary
was offended and said, ‘I thought you
might be a little more excited,’ but I couldn’t
even fake it. All I was thinking was, ‘How are
we going to do a show? What the hell is the
show going to be?’”

Levin continues, “We decided to do a
funny take on Hollywood that would complement
the website. Let’s blow up the paradigm
and just create something completely new,
a new voice, a new attitude, a new point of
view. Suddenly it became interesting.”

With that concept at its core, TMZ on TV
went live on Sept. 10, 2007. TMZ has crafted
a partnership with the Fox-owned stations,
which bought the show in cash plus barter
deals. Stations keep 5½ minutes of advertising
inventory in each episode, while Warner
Bros. keeps 1½ minutes.

TMZ, recognizable to fans of the website
but somewhat looser and goofier, immediately
claimed a top ranking among syndicated
shows, especially in the younger demos. In
the November 2007 sweeps, it averaged a
1.9 household rating, which is about what it
averages today. For the week ended July 21,
it was up 6% year-to-year, the only entertainment
magazine to gain that week. It’s also the
third-ranked magazine in households, behind CBS Television Distribution’s Entertainment
Tonight
and Inside Edition.

More importantly, TMZ is the top-rated
show among men and women in the 18-
34, 18-49 and 25-54 demographics, except
among women 18-49, where it comes in second
to ET, and women 25-54, where it ties
for second with Inside Edition behind ET.

TMZ only averages 2.77 million total viewers,
compared to ET’s 5.13 million and Inside
Edition
’s 4.2 million, but almost all of TMZ’s
viewers are young.

“For the right station, TMZ makes a lot
of sense. They are very good at both making
themselves available within the newscasts
of stations as well as being available on the
websites of those stations and driving traffic
to station websites,” says Bill Carroll, VP,
programming, Katz Television Group. “If you
are a traditional news station, you probably
aren’t going to be the TMZ station. But if
you are aiming at a younger audience, you
probably are going to be a TMZ station, and
happy about it.”

“We were always interested in the show,”
says Jack Abernethy, CEO of Fox Television
Stations. “We knew Harvey knew television,
and it was the kind of thing we needed. It was
intentionally structured to work for a Fox station—
it was young and hip-looking.”

Abernethy is so impressed by TMZ that
one of his TV stations, WWOR New York, is
emulating its style with Chasing New Jersey,
a local newscast.

TMZ is incredibly efficient,” says Abernethy.
“We are trying to steal pieces of this
model. If you look at TMZ, you see how
many people are actually researching stories,
covering stories, touching stories—it’s virtually
everybody. The more people you have
covering stories and bringing stuff in, the better
product you are going to have.”

Incubating TMZ Live

That’s also why Fox jumped on TMZ Live,
another project that originated on the Web.
Launched in 2010, TMZ Live features Levin
and one of his executive producers, usually
Charles Latibeaudiere, leading a conversation
covering the celebrity news of the day.
TMZ Live also jumps off of the morning
meeting, but gets more in-depth about how
the news is being reported.

“People come to our website by the millions
for our exclusive content. But any time you
can take people behind the curtain a little bit,
things get more interesting,” says Latibeaudiere.
“We’re never going to reveal a source or
reveal things that will give other outlets a road
map to our stories. But people love feeling like
they are in our newsroom with us.

“We know that everything we put on the
website or TV show is not going to be welcomed,
that people may not be thrilled with
it,” he continues. “What we are doing is giving
you a full range of entertainment here.
You can agree or disagree, and we’d love for
you to tell us why.”

Fox initially tested TMZ Live on KTTV
Los Angeles, expanded it to KSAZ Phoenix
and then five other markets: Boston, Chicago,
Dallas, Detroit and Minneapolis. This fall, TMZ
Live
will air on all 18 Fox-owned stations, as
well as a few non-Fox-owned stations, all of
which are paying cash for the show and keeping
all 15 minutes of advertising inventory in
each hour. By next fall, it is expected that the
show will be cleared across the country.

Whether TMZ Sports and MomLogic will
take the same TV trajectory as TMZ.com,
TMZ on TV and now TMZ Live remains to be
seen. Levin’s increasingly convinced that TV’s
no longer the only right route, but the notion
that both spin-off brands will find their ways
to multiple platforms is a safe bet.

“I don’t think TV is always the most lucrative
platform,” says Levin. “TV and the Internet
are fusing—we call it ‘Intervision’ here. There’s
a mosaic of things that are more lucrative than
any one thing that you can do. Sometimes TV
makes imminent sense, and sometimes other
things make more sense. We have a combination
of all of that going right now.”

Whatever the new frontiers end up bringing
for TMZ, it aims to keep people on their toes.
The fact that the mere mention of its name
brings a strong reaction is a key revenue driver.

“After a couple of years of doing the TV
show, we were doing some market research,”
Latibeaudiere recalls. “We did a test with
some people and they watched our show as
well as Entertainment Tonight, Access Hollywood
and shows like that. We asked, ‘How
do you feel about TMZ? About the website
and the TV show?’ And it was interesting that
the resulting graph showed that people either
loved TMZ or hated it, but they felt strongly
either way. For other brands, the curve was
flat. We never want to be flat.”

TMZ Timeline: If There's Bad Celebrity News, TMZ Is There To Break It

Nov. 8, 2005: TMZ.com debuts.

July 28, 2006: TMZ.com breaks the story that Mel Gibson went on an anti-Semitic tirade after being arrested for driving under the influence.

Nov. 20, 2006: Video goes live of Seinfeld’s Michael Richards going on racist rant at Hollywood’s The Laugh Factory.

September 10, 2007: TMZ on TV premieres in national syndication.

January 22, 2008: TMZ is first to report the death of Heath Ledger.

June 25, 2009: TMZ breaks the story that pop legend Michael Jackson died at the age of 50.

Dec. 20, 2009: TMZ breaks the story of the death of actress Brittany Murphy.

March 2012: Fox launches tests of TMZ Live in Los Angeles and Phoenix.

October 2012: Fox adds five markets—Boston, Chicago, Dallas, Detroit and Minneapolis—to TMZ Live test.

Sept. 9, 2013: TMZ Live is to premiere on 18 Fox-owned TV stations. —PA

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