It was one of the most magnificent crashes in the history of Israeli prime time. “The Four” was supposed to be the next big thing in Israeli TV, an innovative singing contest that turned the traditional concept on its head by introducing the four finalists early in the season. But viewers voted with their remotes and the audience was just 168,000 — though that was an improvement over the penultimate episode. Channel 10 pulled the program just a month after it began.
“The Four” should have been an indelible stain on the reputation of Armoza Formats, the company that developed it and a pioneer in the business of creating TV programming for the international market. Indeed, it was a setback, but in the end the program succeeded in the United States, where it’s broadcast on Fox, as well as in 20 other countries.
Avi Armoza, who founded the company in 2005 and owns it to this day, has a good explanation for what happened, but it doesn’t interest him. He has gone on to other things.
Last July ITV Studios, the production unit of the British broadcaster ITV, announced it was buying Armoza, with its portfolio of some 100 formats, and merging it with its global operations. It was an impressive exit for Armoza, who will continue to manage the company. The deal not only was a vote of confidence in Armoza but in the Israeli television industry.
Over the last several years Armoza has been locked in a battle with local broadcasters, especially Keshet. The latter is not only a local broadcaster but has been a big success in the global market, too, selling programming formats and developing content in its studios. It has played a big role in turning Israel into a force in the international TV industry.
But, according to Armoza, Keshet has exploited its market power in Israel to force creators and producers to turn over most of their rights to shows it airs.
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“Keshet is the most cynical example of the concentration in the Israeli broadcast market,” Armoza said in the past. He was instrumental in encouraging the formation in 2014 of a government committee, headed by Prof. Adi Ayal, that was tasked with finding a way to reduce the power of the big broadcasters.
Now that he is part of an international group, Armoza takes a friendlier line to broadcasters. “I’m in another place,” he said. “I appreciate entities that take risks and invest in content. Companies manage their investments in different ways.”
Armoza’s Tel Aviv offices are festooned with posters touting its most successful programs. The company will go anywhere to come up with the next hit format – it has a reality show where three witty drag queens accompany a couple on their first date; another where three grandmothers advise on matrimonial matters; and “Date in Reverse,” where couples meet for the first time between the sheets on their wedding night.
How does Armoza keep coming up with successful concepts? “That’s a difficult question,” he admitted. “There’s no definite answer. The question is what characterizes cultural experiences. Will people ever stop singing, dancing or dating? The cultural experience hasn’t changed, but as creators we change the way the story is told. It could be around the chair of “The Voice,” which created another perspective, or through all kind of technological marvels. But the essence of the business is to tell a good story.”
What has changed is the broadcast industry, which used to be a monopoly or near-monopoly in each national market. Today, streaming has created lots of new broadcasters and even Netflix, the dominant force in the segment, faces serious competition from Amazon Prime, NBC’s Peacock and YouTube, to name a few.
“In essence, the content hasn’t changed. But decentralizing the audience inevitably results in lower revenues and requires broadcasters to find content while significantly reducing spending or looking for additional revenue models,” said Armoza.
Israel has capitalized on the industry upheavals. In a ranking of the top 30 international programs in The New York Times this week, Israel had two, including the No. 1 “Prisoners of War,” as well as two honorable mentions.
“There’s a lot of creativity in the Israeli content market. Our culture is characterized by finding quick solutions and quick thinking about devising solutions to all kinds of crises and unexpected developments. That expresses itself often even in the works themselves. Israelis tend to think out of the box.
“In many places in the world, people like to do what they’re familiar with and follow a safe path, but Israelis are always looking for a twist, where they can make a change and where they can surprise. In the world of formats and innovation, this is an asset – it’s important, even critical. Beyond that, a very important component in creativity is taking risks,” Armoza said.
Israel’s other competitive edge is the absence of any “production tradition” and the limited budgets of producers. Like their counterparts in other small countries, Israeli producers can create quality programming with little money, which is just what the global market needs now.
“That’s something the world very much wants to learn from us. They look at us with wonder. ‘How do you do it with so little?’ Because they operate along conventional parameters that they know, which are very costly,” he said.
That edge has brought other international players to the Israeli industry. In May 2012 the German company Provision bought control of the Israel producer July August Productions. A year later the Dutch television production company Endemol acquired a majority interest in Kuperman Productions and later brought shares in Reshet. Three years ago, Freemantle acquired 51% of Abot Hameiri.
The deals were done at valuation of more than 8 million shekels ($2.3 million at current exchange rates) each, except for Armoza, which was done at more than 10 million, market sources say.
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Armoza is the Israeli industry’s most prominent player, with connections to the biggest players in the global TV industry.
Armoza got his start in the public sector, as an aide to Uzi Narkiss when he headed the immigration department at the Jewish Agency. Narkiss appointed him head of the audiovisual department, where Armoza produced films promoting immigration. He was the only one to document the Ethiopian immigrants before boarding the plane to Israel in Operation Solomon in 1991.
Eventually, he formed Jerusalem Capital Studios, which was in its day the biggest TV producer in Israel. He later served on the board of Channel 10 television as Ron Lauder’s representative.
The rapid changes in the TV market caused Armoza to change its business model and eventually to sell the company. He realized that selling TV formats of others could make money but it wasn’t enough. The local broadcasters whose concepts he marketed tried to box him out of the market, and local producers weren’t interested in teaming up with him.
“To survive in the changing market, if you don’t own content you’re on the road to collapse,” he explains. So at the start of the decade Armoza set up his own development team of six people and began producing pilots. Israeli TV broadcasters refused to air them, so Armoza sold his formats abroad first.
His first program was “I Can’t Do That,” which was never broadcast in Israel but had strong sales abroad, including a two-season run on the U.S. network NBC. The show had contestants improve their capabilities in a specific area within a week and meet goals. The next was “The Four,” which failed in Israel but did well overseas.
His most successful format was based on the Israeli game show “La’uf Al Hamilyon,” which has gone on to be broadcast around the world in local formats under the name “Still Standing” and counts 6,000 episodes to its credit.
“The job is like high-tech,” said Armoza. “You have some startups, and if one or two succeed, you have a substantial return on investment.”