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April 17, 2013updated 24 Apr 2013 2:26pm

How Splash cashed in on the celebrity boom: No one exports dirt better than the British

By Dominic Ponsford

Few journalists if any have done as well out of the boom in celebrity-driven news as former redtop staffers Gary Morgan and Kevin Smith.

The pair founded news agency Splash in the early 1990s and grew it into a global outfit with 100 staff and offices around the world. In July 2011 they sold out to photography giant Corbis in a deal believed to be well excess of the agency’s estimated $30m turnover.

Smith (pictured above right) stepped down as president of Splash last year leaving Morgan (left in picture) as chief executive.

Here, he tells Press Gazette about the formation of Splash and what the future holds for the agency.

How did it all begin?

Kevin was given a job by the Daily Mirror to be their LA correspondent, so he basically sold up everything in England, and the day before he left for LA the Mirror cancelled his job. He thought, ‘screw it’, and moved to LA anyway.

For a couple of years he was just freelancing on his own. In 1991 I was let go by the Today Newspaper and they paid me some money so I decided to travel around the world.

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I decided to look up Kevin, we all went out drinking, he came to Hawaii with me for two weeks and the idea of putting up Splash was born. He said “come back when you’ve finished travelling around the world and we’ll set it up together.”

So I came back as his number one employee and we just started writing hard news for English newspapers, and it became obvious pretty quickly that no one cared what happened in LA unless there was a celebrity involved.

The defining moment for us was there was a fire and all the Australian newspapers called us up and said, ‘how’s Mel Gibson?’.

Back in those days you could just knock on the door, so we went along and knocked on the door, interviewed him and took a picture.

The picture sold for ten times more than the words and we thought, ‘hold on a minute, the money’s in pictures’ so we just started hiring photographers.

Back then I think there were probably five paparazzi in LA, there’s probably 500 now. No one was doing it then.

Was there a story which made Splash break through to the big time?

We started off just servicing UK newspapers, then it became Australian newspapers as well. Back then, US magazines didn’t care. People magazine wouldn’t run a celebrity story.

What really took off for us was when US magazines changed from monthly to weekly and obviously the web came in and that’s when the technology changed and gave us the ability to move content multiple times.

But before then it took us three weeks to sell a picture. You’d actually print an 8×10 out, you’d FedEx it to The Sun, they didn’t want it and FedEx it back, then FedEx it to the Sunday Mirror, they didn’t want it so FedEx it back – it could take three weeks to sell a picture and by the time you’ve sold it, it had coffee stains on it.

What’s the biggest splash for Splash?

We broke the Michael Jackson paedophile scandal internationally in 1993. That was really the defining moment for us, we won a lot of awards, you can imagine how big that story was.

We were given some legal papers the night before the raid on Neverland which said it was a custody battle.

It was Macaulay Culkin’s dad, and he filed the papers that said ‘I want to keep my son away from Michael Jackson’ and we thought, ‘what the hell does that mean?’ and the next day the news broke that police raided Neverland so we put two and two together and followed that lead.

We didn’t break the actual story of the raid, but we broke pretty much everything else from that point on because we had the papers. We had the witnesses, and we just went piling into it.

That was the story that really put us on the map because we really led the story for maybe two years on that one.

Did you ruffle a lot of feathers in the early days?

As the saying goes, no one exports dirt better than the British. I think the very aggressive style of Fleet Street journalism is something that people didn’t really expect over here, and we didn’t really know any better because that’s how we were trained.

We applied Fleet Street tactics to the US, and it was just something we did naturally.

In England every town has an agency, right? But in LA, the place where every celebrity lives, there was no agency, no picture or words agency doing what South West News or Masons or a National or any of those guys in England did.

So all we did was apply that logic to LA and, yeah, we put noses out of joint.

People magazine refused to buy a picture off of us in the first few years – they said ‘we don’t do celebrity, it’s cheap’. Hollywood didn’t really like us, we didn’t get much help from publicists. But you didn’t need to back then.

Back then you could shoot celebrities with a long lens, in the back of a car with the window down, you could shoot them and no one would ever know you shot them with a long lens. It’s all different now with digital cameras, people just run up and form a huge circle around them, but back in the day they never actually ever saw you…

We used to be the red-headed step-child at parties, Hollywood didn’t want us there but they had to invite us. Now we’re working much closer with the Hollywood PR machines.

How do Fleet Street tactics differ from the US approach?

Basically, Fleet Street taught you that you went after the story and you went after the angle – and it was all centred around the person. American journalism traditionally has been about issues and they didn’t focus very much on the person themselves.

Has the bubble burst for celebrity-focused news?

No, the demand for celebrity is absolutely insatiable. The web has opened up 150m blogs out there. The client base on the web is actually limitless, and the trick is how do you filter through that digital economy?

It’s a global language – everyone in the world talks celebrity. If you go to an Indonesian village in the rainforest, everyone will be watching an Arnold Schwarzenegger movie. And I think that really defines it.

Gossip is the second biggest industry in the world…Everybody gossips about everybody.

Paparazzi agency Big Pictures went into administration last year – is it a sign of the times for your sector of journalism?

Whereas there were 20 paparazzi agencies last year, in the next couple of years there will probably be five.

People either consolidate together or they’ll get gobbled up into the big ones. And we’re certainly looking at who do we bring on board.

If you look at Getty, they are the biggest picture agency, but they’re stuck on the red carpet. In the candid world, which is really what the web audience want you have to commodify that.

What we’re looking to do is gobble up the ones below us and become a big aggregator.

Is the UK media market as big as it used to be? Has there been a drop-off post Leveson?

The collapse of the News of the World was a bitter blow for every photographer around the world. That was, without a doubt, the biggest client around the world for everyone.

We’re seeing a big challenge in UK papers, where the UK was the biggest market ten years ago – they’re still the second-biggest market after the US – it goes US, UK, Germany, Australia, France and then filters down from there, but English papers are way more cautious now.

In a way it’s good because they set rules, you know what you can and can’t sell in the UK now, whereas before it was basically anything goes.
What about people who say what you do isn’t proper journalism?

I just point them to the trends on the web. Last year seven out of the top ten search items on Yahoo were celebrity.

We’re in pop culture – and people can argue about whether they think pop culture is important or not, but the bottom line is entertainment breaking news is the fastest growing section of the media.

People want to consume celebrity…Everyone has their idea about what’s important and what isn’t, but celebrity is the fastest-growing segment of the media so the consumer is saying, ‘I want it’.And if they want it, they go get it.

What does the future hold for Splash?

There are 150m blogs out there, and we service thousands of them – the challenge is how do you make those millions of sites out there become paying consumers.

The content licensing model is very adversarial – because the website or magazine will try to get a picture for as little as possible, and the photographer is trying to get as much money as possible, so the model doesn’t really work on the web, so what you’ve got to do is say, “where is the money really”?

The money’s in advertising. How do we both go after that piece of the pie?

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