Sex, Money & Videotape: Making Billions on Reality TV

Civilization might have been better served if, on that fateful evening in 1997, John de Mol had just called it a night and gone to sleep.

But he couldn't stop brooding about television. It was close to midnight, at the end of a long and fruitless brainstorming session, when someone had mentioned Biosphere 2 — the American media stunt that locked four men and four women in a giant glass bubble in the desert for two years. At 5 a.m. the next morning, De Mol had his inspiration.

"I was hypnotized," recalls the handsome Dutchman, 47. He runs a TV production company called Endemol (the pharmaceutical-sounding name comes from the 1994 merger with a Netherlands rival, Joop van den Ende).

"I suddenly started wondering what would happen if you put a bunch of boys and girls together in a house and put them on television 24 hours a day." He can't claim to have invented the idea; MTV's Real World was already on the air. But he milked it better.

After a year of secret work De Mol created a show called Big Brother, in which 24 TV cameras trained on a group of young, good-looking men and women cooped up in a house for 100 days. Aired in Holland in September 1999, it arrived just when the world was ready for a new kind of boob-tube content: reality TV.

Love it or loathe it, this kind of show has fundamentally changed how television operates — and made John de Mol a very rich guy.

Show Me the Money

What's novel about such programming has little to do with scraping new lows in entertainment. Televised displays of greed, lust, scheming and humiliation have been around since Queen for a Day in the 1950s and the Newlywed Game in the 1960s; public television's on-camera vivisection of the dysfunctional Loud family in the 1970s was another early example of the genre.

The revolution is as much economic — especially in the United States. Along with Endemol's Fear Factor, shows like Joe Millionaire and American Idol (both non-Endemol productions) are drawing much higher ratings than a lot of standard prime-time fare, giving lineups a good shakedown.

And they're changing the way networks pay for programming. With few exceptions, reality shows are profitable from Day One for the studios that make them. The typical sitcom or drama pays off later, when it gets to reruns, or never at all.

Reality TV doesn't cost a lot to produce. No accident that a frugal Dutchman saw the potential and took it much further than Survivor's creators (idea man Charlie Parsons and dealmaker Mark Burnett, both Brits).

"This changes the whole profit model of television," gloats De Mol, who keeps a gimlet eye on the bottom line. An hour of Big Brother cost $286,000 during the first season (it's more now). An average half hour of sitcom costs $1.3 million (add millions if it has a pampered cast like Friends).

Reality TV also provides plenty of room to develop other sources of revenue, from premium-price call-in charges to database marketing.

Cheesy, Voyeuristic — A Ratings Smash

Not that this human flea circus was an easy sell — even in libertine Holland. Only one Dutch TV station accepted the idea. Moreover, Veronica, the channel that finally bit, would agree to take Big Brother only if Endemol ponied up half the $6 million production cost itself in exchange for about 50 percent of ad revenues.

And so began a global epidemic. The day after Big Brother premiered on Sept. 16, 1999, everybody agreed it was cheesy and voyeuristic, including Holland's beloved Queen Beatrix. That didn't stop her countrymen from peeking. By the season finale, on Dec. 30, around two-thirds of Holland was tuned in.

The Dutch weren't the only ones glued to the show. At Mipcom, the industry's trade fair in Cannes that October, executives from around the world stormed Endemol's booth for the chance to license the Big Brother format. With a couple dozen game shows, variety programs and reality dating shows like All You Need Is Love, De Mol had been trying to crack the U.S. market for at least 10 years and never quite managed it. Now suddenly CBS, ABC, Fox and USA Networks were courting him.

If the Americans wanted Big Brother, they would have to bid for it on De Mol's terms, which meant coming to visit the show's set not far from Hilversum. The town, a leafy bedroom community 40 minutes from Amsterdam, has been a hub of Dutch TV and radio production ever since Philips built some of the country's first studios there in the 1920s.

"I've never seen American TV executives jump on a plane so quickly," recalls Gary Carter, Endemol's former executive director for international programming.

In February 2000 De Mol signed a deal with CBS President Leslie Moonves, and Big Brother first aired in the United States the following summer, alongside another CBS import, Survivor. CBS paid $20 million for the first season of Big Brother and $15 million for each subsequent one.

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