Ynon Kreiz

July 20, 2009 World Screen

 

April 2009
 
When Ynon Kreiz took over as chairman and CEO of Endemol last June, he set out a number of goals, including diversifying the company’s program catalogue beyond formats, expanding production operations in more territories around the world, and taking advantage of the opportunities new-media platforms offer.
He quickly delivered on those goals. A few months ago, Endemol acquired 100 percent of the Southern Star Group from Fairfax Media. With one transaction, Kreiz assured his company a constant supply of scripted drama and a library that ranges from action series to TV movies and children’s programs. Endemol has also increased the number of countries where it is engaged in local productions, Brazil being the most recent. Kreiz shares with TV Formats his vision for Endemol.
 
WS: What do you see as your main growth areas?
KREIZ: We are looking at different vectors of growth: We are looking to continue to grow our core business, that is our first priority, then we are looking to expand geographically into new regions. We want to grow our distribution business, our drama business and our digital operations.
 
WS: Geographically, which areas are you targeting?
KREIZ: We are looking at growing in Asia, Central and Eastern Europe, the Middle East and Latin America.
We recently appointed Arjen van Mierlo as chief executive officer of Asian operations. He is one of our best people and has a big task to manage the growth of that region locally with a very hands-on approach. He will bring our best practices, our formats, our relationships and know-how and implement that locally by working with local management.
Central and Eastern Europe is another area where we believe we will be able to deliver big growth, and this region is now managed by Marina Williams, who we hired last year—but she only formally started with us in the beginning of January. She is, in our minds, the best television executive in the region. We are also seeing opportunities in the Middle East under the management of Ziad Kebbi, as well as in Latin America, where, among other things, we just launched our own subsidiary, Endemol Brasil, which will run in parallel with our joint venture with TV Globo. We are looking at local markets where we believe we can achieve a lot more growth than we have in the past. This is in tandem with the global steps we’re taking to drive growth across the entire company. We believe we have to take a local approach to implementing this strategy, and that is why we are setting up these regional operations.
 
WS: What is your strategy for digital media?
KREIZ: We remain bullish and we are big believers in digital growth. This is a company that historically has been very oriented toward the digital domain. In today’s market conditions, you have to be very focused on real revenues and real profits as opposed to speculative ventures. I can’t be more specific on this right now, but we are looking at profitable opportunities to grow our digital business even in the current climate. These are not speculative ventures of which we don’t know what the economic benefits will be. We are still very proactive in the digital space and we are seeing quite a lot of exciting opportunities that we are looking to build [on] and commercialize.
 
WS: It’s no secret that the economic climate out there is grim. How does your background in finance help you navigate the company through these hard times? Are there certain things you are keeping an eye out for, or certain things you are trying to avoid?
KREIZ: It’s trying to manage several dimensions simultaneously around what our company does and operate within our corporate priorities.
It’s no secret that we have a large debt that we have to manage and that we have financial targets we are committed to reach. We are looking at a variety of transactions, acquisitions and opportunities around our core business that can support what we do.
 
WS: What are the most important challenges Endemol must face in order to maintain its competitive edge in the format business?
KREIZ: There are several things we need to do. First and foremost, we have to remain very focused on our core business, which is the creation and production of great television shows. This is what we are best at. This is what we have been doing since our inception and this is what will set us apart as we head toward a very challenging economic environment. The beginning, the middle and the end for us is about making great tele vision shows.
On top of that, we are taking a number
of initiatives to maintain our competitive advantage, including geographical expansion, diversifying our business, establishing our distribution platform, expanding our scripted drama activity and building our digital business.
 
WS: How do you ensure that a large company like Endemol remains flexible enough to be able to react to broadcasters’ needs?
KREIZ: The key to our strategy is to combine a very large-scale organization, which is in more than 25 countries now, while remaining very local and close to our broadcasting partners. That is what enables us to deliver to the broadcasters, to reach their audiences at a budget that is commercially viable. That combination is really what makes us flexible and competitive.
 
WS: How does Endemol cut or contain costs without interfering with the creative process?
KREIZ: You have to balance things. As a company we have been very prudent; we are not big spenders with lavish offices or amenities. We are very focused on making sure that most of the people who work for us either make shows or sell them. Probably 90 percent of our workforce is focused on these areas in some capacity.
One of the biggest initiatives is to become more efficient in the way we produce expensive shows, and this is by way of centralizing productions. The easiest example would be how we approached the making of Wipeout. Wipeout in itself is a very expensive show. Probably only the U.S. market can afford it on its own and ensure that the production values are as high as they have to be for the show to deliver its full impact. Following the success of the show on ABC in America, we built our own set in Argentina that cost an arm and a leg! No one country could have justified that cost structure, but as we are producing the format for more than 20 countries, we can amortize the cost across many different productions and make it affordable. That means that you get the quality of the show that aired on a U.S. network at affordable prices that smaller countries can sustain. This is something that our size and scale and global reach allows us to do. If you sold that show to only two or three markets it wouldn’t have worked. But because we were able to sell Wipeout to multiple markets, we were able to make the economic ends meet.
 
WS: What can the Hollywood studios learn from Endemol?
KREIZ: The Hollywood studios are very good at what they do and there are a lot of things that we can learn from them. However, studio product usually comes from the U.S. and goes out into the world, whereas in our case a show can come out of any country and travel from there to the rest of the world. We learned that talent can be anywhere and ideas can come from left field. Sometimes they come from the front door, but very often they do not.
We have developed a very creative platform, with more than 120 people whose main job is to create new ideas, new formats, new shows. And these people are spread out all over the world; they come from different backgrounds, different experiences and different cultures. We are very proud that we managed to build an infrastructure that fosters this type of creativity.
 
WS: The big news for Endemol so far this year has been the acquisition of the Southern Star Group. Why was that important?
KREIZ: This acquisition does three things: It gives us a very strong production base in Australia that enhances our entire Asia-Pacific business. It accelerates our distribution activity. We’ve always sold our own formats and now, through this acquisition, we are making a big leap toward building a global distribution platform, which represents both Endemol and third-party product. It also accelerates our drama activity with one of the most prolific creators of scripted series in the world.           

 

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