Web celeb rag scores big

By Frank Ahrens

updated 7:31 p.m. ET March 25, 2007

The fastest-growing Internet news site does not belong to a prestigious newspaper or a storied television network reporting the great events of the day. Instead, it is a Web site barely a year old that beat everyone to the details of the sordid death of Anna Nicole Smith.

Over the past several months, TMZ.com's little newsroom of 28 repeatedly has scooped rivals on ongoing stories, such as the escapades of Britney Spears and her ex, K-Fed. Like the Drudge Report and Smoking Gun sites, TMZ made its name landing exclusives: documents from Mel Gibson's arrest, the photo showing the contents of Anna Nicole Smith's refrigerator in her Bahamas bedroom, which included Slim-Fast and methadone.

TMZ has hit a sweet spot at the intersection of technology and culture, flourishing over the past several months thanks to a confluence of sordid events, timing and consumer taste. The site, which is written in a blog format, takes its name from the Thirty-Mile Zone, a circle drawn by labor unions that governs work rules for movie studio employees in the Hollywood area. It's also where TMZ stalks its prey.

Audience surges
Though neither TMZ nor parent company Time Warner would divulge revenue figures, the site became profitable a few months ago and ad revenue continues to increase, according to its general manager. Its success is reflected in its viewer numbers; after launching in December 2005, TMZ had 3.3 million unique visits in February 2006, according to ComScore Media Metrix, which tracks Web use. Last month, that number reached 8.4 million, significantly outpacing the Web sites of all other celebrity-news outlets.

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Celebrity news in general is a growth industry, both in print and online. Circulation is rising at People, Us Weekly, In Touch Weekly and Teen People, according to the Audit Bureau of Circulations, which tracks print readership. Blogs such as Gawker and Perez Hilton also prosper by gabbing about stars, and celebrity news has boosted readership and ratings for the mainstream media, as well. On one of the days shortly after Smith's death, for instance, three of the top five most-viewed articles on Washingtonpost.com -- including No. 1 -- were about Smith.

Of course, it remains to be seen if the culture is near its saturation point for celebrity dish and whether TMZ will continue its growth. What would happen to TMZ, for example, if celebrities spent the rest of 2007 acting like, say, normal human beings? And are celebrity news fans a fickle lot? If a flashier, trashier rival came along, might TMZ users defect?

Shoe-leather and wallet power
TMZ has a shoe-leather staff that circumvents publicists to make friends with valets, bellhops and other witnesses to celebs' bad behavior. Unlike traditional news outlets, however, TMZ sometimes pays for information. And it lets fans participate and profit, thanks to camera phones, which turn yesterday's mere voyeurs into today's compensated paparazzi.

"There's this ravenous appetite for this type of information," said Alan Citron, general manager of TMZ, based in Glendale, Calif. "It's a really great match with the Internet -- it allows you to present it in real time and in a high-volume way that allows people to feast on it throughout the day."

Last week, The Washington Post reported that TMZ will launch a political Washington section of the site, called TMZDC, featuring the foibles of the District's local famous. The site's parent will also spawn a half-hour television show this fall on Fox.

TMZ has succeeded, at least partly, because its users aspire to be what they see.

"More people than ever believe they can be famous," said Hilary Estey McLoughlin, president of Warner's Telepictures Productions, which will produce the TMZ television show.

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