STRIKING GOLD IN EUROTRASH TV (int'l edition) Endemol's localized programming is seeing dazzling growth Diana was desperate. She was in love with Frans but couldn't tell him. So she wrote to the Dutch TV program All You Need Is Love, which arranged for an on-air meeting. But the show also invited another amorous Diana of Frans's acquaintance. When Frans chose the second Diana, her rival exploded. The host struggled to hold her from hitting Frans--and the show's ratings soared. Thanks to such lowbrow hits as All You Need Is Love, Endemol Entertainment is Europe's fastest-growing TV production company. In the last year, the Dutch company has bought 50% of Broadcast Communications from Britain's Guardian Media Group, 45% of Rome-based Aran, and 45% of Zeppelin, a producer in Madrid. Endemol's partners produce local versions of All You Need Is Love and a wide range of TV dramas and entertainment shows. ''Our goal is to rank in the top three in all of Europe's largest TV markets,'' says Ruud Hendriks, an executive board member and director of international affairs. This kind of growth represents something new in European TV. Endemol, whose programs are broadcast in more than 40 countries, is the first producer to reach across the Continent. Until now, European producers have been small and local--Germans producing almost exclusively for Germans, French for the French. Endemol can't emulate big U.S. producers, which sell a single show in English to a vast assortment of European broadcasters. Instead, it develops programs in its Dutch studios, while its foreign partners adapt the concept to the local market. In the Netherlands, for example, All You Need Is Love lasts an hour, while it stretches to two hours in Spain to allow the host more time to talk with lovers. MASS APPEAL. Demand is soaring for ''localized'' programming of this kind. Scores of commercial and cable-TV stations have emerged in recent years to challenge state-run monopolies. ''Endemol succeeds by producing low-cost shows with mass appeal,'' says Jacques Bughin, a McKinsey & Co. consultant. On another Endemol hit, Soundmix, amateurs compete to put on the best imitation of pop-music acts. Soundmix is localized in nine European markets; Dick Clark Productions Inc. is preparing a U.S. version. John de Mol, Endemol's 41-year-old chairman, started out in the 1970s producing half-hour shows with $6,000 budgets for Sky Channel, the first commercial broadcaster aired in the Netherlands. His John de Mol Produkties was soon a leader in that country. But de Mol had larger ambitions. With Joop van den Ende, his biggest competitor, he created Endemol in 1994. They moved into a stylish building outside of Amsterdam and floated Endemol on the Amsterdam exchange. Since its launch, de Mol has pushed the company decisively out of the Netherlands. It now owns three production companies in Germany alone. And sales have kept up the pace: They have almost doubled in the past four years, to $404 million in 1997. Profits this year should reach $40 million, on expected sales of $440 million. Hendriks is now looking for a French acquisition and wants majority control of most of Endemol's European ventures within three years. Not everything Endemol touches turns to gold, however. When de Mol tried last year to get into sports by launching a pay-TV station, Sport7, he offered a startling $648 million for Dutch soccer rights. Regulators, cable companies, and soccer teams all balked. De Mol closed Sport7 after five months and took a $20 million personal loss. Two years ago, Endemol also bought Holiday on Ice, a diversification move that investors never bought into. De Mol now wants to concentrate on his core TV production business. ''The market wants us to focus on what we do best,'' he admits. Unlike in the U.S., where producers put their own money up front in hopes of creating a lucrative blockbuster such as ER, the medical drama, Endemol works for fixed fees. ''You don't get an ER-type bonanza here, but you don't have the same risks,'' says de Mol. ''Our business is much more stable and predictable.'' The market seems to believe him: After hitting a low of $19 last year, Endemol's stock has recently rebounded to $27--and looks set to climb further. In TV, as in any business, that's the best possible rating. By William Echikson in Hilversum, Netherlands RELATED ITEMS TABLE: Doing It Endemol's Way

Updated May 21, 1998 by bwwebmaster
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