BusinessWeek: Alloy and Teenage Girls

October 15, 2010

Alloy Wants to Own Teenage Girls

The entertainment company dominates teen books, television, and film, so why not the Web, or the rest of the world?

By Susan Berfield

Josh Bank is a cheerful guy in a red-checked shirt and pressed khakis with millions of young women under his influence.

On this Sunday morning in Los Angeles, several of those women are on the set of his new Web series, Hollywood Is Like High School with Money. Bank, 42, the president of Alloy Entertainment (ALOY), is one of the creative forces behind hits like the television show Gossip Girl and the novel and movie The Sisterhood of the Traveling Pants. Perched in a director’s chair, his eyes alert, Bank watches two actresses run through lines he thought up with another set of charges, the mostly young, mostly female editors and writers who churn out stories for him at Alloy.

“I love the idea of a teenager giving an adult rules about how to survive in Hollywood. It still makes me laugh,” says Bank about his show, which revolves around Quinn, the high school Queen Bee, who teaches a hapless studio assistant named Taylor how to outmaneuver a ruthless rival. Then he turns serious, describing the icy derision that is the signature mood of Alloy stars, many of whom are studies in the Machiavellian teen. “I insisted when we were writing the script that Quinn be absolutely intolerant of everything Taylor does in that classically teenage girl way,” he says. “Quinn doesn’t give an inch.”

The other millions of young women under Bank’s influence? They watch Alloy’s Twilight knockoff, The Vampire Diaries, and Huge, the critically acclaimed show about teens at a fat camp. They read Alloy books like the best-selling seriesPretty Little Liars, which was conceived as Desperate Housewives for teens; eight such products have been on The New York Times best-seller list this year. Nearly 21 million teens logged on to Alloy’s websites in September, according to tracking service comScore (SCOR), and 6 million see Alloy’s ads on its in-school television network, Channel One News. Private, Alloy’s first Web series, got 14 million hits and convinced Bank and the other executives that their digital future had arrived.

On the Web, Alloy hopes to do what it can’t on television or in film: control the content, the distribution, and the advertising sales, and thus the profits, for its shows. If all goes according to plan, Alloy could be a digital studio and broadcaster in one. It could own the teenage girl, and maybe even the holy grail of demographics, prized for its spendthrift, trendsetting ways: the 18- to 34-year-old woman. Maybe Hollywood really is like high school: Rule No. 1, says Quinn, is “Be aggressive.”

In June, Strauss Zelnick, head of the private equity firm ZelnickMedia, and other investors paid $126.5 million to acquire Alloy Entertainment and its publicly traded parent company, Alloy Inc., which also includes a youth marketing and research firm. When the deal closes later this year, Alloy will have an ambitious owner in Zelnick, who was once president of 20th Century Fox and is also trying to revive video gamemaker Take-Two Interactive (TTWO). “I expect them to be nothing less than the most important entertainment company serving the youth market,” he says. With Zelnick comes a new chairwoman, Geraldine Laybourne, who pretty much invented the cable channel Nickelodeon and founded another, Oxygen Media, and now wants to influence a new generation. She used to tell Sumner Redstone, her boss at Viacom (VIA.B), that Nickelodeon wasn’t just a channel, it was a lifestyle. She has something similarly grand in mind for Alloy. “We can get under the skin of this huge market,” she says, noting that teens are at once ubiquitous and elusive. “

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