Eco-Challenge Lifestyles Inc.

founded: 1992

Contact Information:

headquarters: 9899 santa monica blvd.
beverly hills, ca 90212-1672 phone: (310)553-8855 url: http://www.ecochallenge.com

OVERVIEW

Eco-Challenge Lifestyles Inc. was founded in 1992 by British entrepreneur Mark Burnett. Burnett, a life long sportsman and competitor, wanted to introduce adventure racing to a global audience. The businessman in Burnett saw an opportunity to transform his passion for outdoor adventures into a profitable venture. Three years after founding the company, he produced his first televised Eco-Challenge race. The grueling event features co-ed teams of four people who travel across the wilderness from checkpoint to checkpoint. The course usually covers several hundred miles of diverse terrain. Contestants often compete with little or no sleep, with the goal to be the first complete team to arrive at the final destination. The company stages the event annually.

The company expanded into the reality TV genre with the launches of Survivor and Combat Missions. The former debuted in the summer of 2000 and features a group of contestants stranded on an island or deposited in the middle of a wilderness area. Contestants are known as "tribe members" who attend tribal council and cast votes to banish individuals from the tribe. The object of the game is to be the last person eliminated; the winner receives a million dollar paycheck.

Since its inception in the early 1990s, the company has also launched several smaller ancillary businesses. The Eco-Challenge Travel agency helps outdoor enthusiasts plan non-competitive, non-televised adventure excursions. The Eco-Challenge Lifestyles Web site provides current information on adventure racing and upcoming events of interest.

COMPANY FINANCES

Eco-Challenge Lifestyles does not publicly report profits, but it is widely accepted that Mark Burnett has made a fortune from the success of his Survivor series. The Eco-Challenge Expedition undoubtedly generated revenue for the company, but Burnett struck gold in the summer of 2000 when Survivor took the country by storm. Consider these figures: in August 2000 advertisers paid an incredible $600,000 for a 30-second spot during the two hour finale of the original Survivor. The price of an ad was $100,000 when the show first premiered three months earlier in May. The advertising rates for Survivor 2 began at $300,000 in 2001. NBC has paid Burnett $50 million for the rights to his new show, which will attempt to send the winning contestant into space. Ten years after launching his own business, Burnett's fortunes are literally out of this world.

ANALYSTS' OPINIONS

In the case of Eco-Challenge Lifestyles Inc., the most important analysts aren't on Wall Street; they're in Hollywood and they're network programming analysts. A privately held company, it does not rely upon the good will and good ratings of investors. Instead this company focuses on Nielsen ratings and good buzz. Survivor has been the cash cow for the company since it premiered in the summer of 2000 and achieved instant hit status. The idea of low cost reality programming with the ability to attract huge viewing audiences was very appealing to network executives. Each network scrambled to develop the next hit. A new genre in television programming was created. The television schedule quickly filled with clones of the hit show, or poor substitutes depending on your perspective. Programs were cast with characters willing to participate in the most outrageous situations on Temptation Island, Big Brother, and Who Wants to Marry a Multi-Millionaire. Scandals erupted over the behavior or past behavior of cast members. In late 2001 the public appeared to be disenchanted with the format, and many of the shows were dropped from the airwaves. Survivor remained strong and demonstrated its potential to endure in 2002 as its ratings climbed. It is unlikely that the genre will dominate the network schedules as was once predicted, but if Mark Burnett should survive.

HISTORY

The history of Eco-Challenge Lifestyles Inc. begins with the life history of J. Mark Burnett. Burnett is a British citizen with a wide range of interests. His career includes time in the military as a member of the British Army Parachute Regiment where he earned distinguished service medals for participation in active combat. His own survival skills are impressive. He is a certified SCUBA diver and Level A skydiver. In addition, his training includes a white water course and an Advanced Wilderness First Aid certification. His interests led him to the extreme sport of adventure racing.

The concept of adventure racing can be traced to French journalist, Gerard Fusil, who pioneered the event in 1989. The premier event in the sport is the Raid Gauloises, a 250-mile gauntlet staged annually for a prize of $40,000. The sport captured the imagination of native New Zealanders who were attracted to the rugged and demanding nature of the sport. A country filled with harsh and challenging terrain, New Zealand offered the perfect venue for great contests. Expedition racing gained popularity and the attention of Mark Burnett. After observing the success of the events held in New Zealand and throughout the world, he decided to introduce the discipline to North America.

FAST FACTS: About Eco-Challenge Lifestyles Inc.

Ownership: Eco-Challenge Lifestyles Inc. is a privately owned company.

Officers: J. Mark Burnett, 41, Founder and Exec. Producer

Employees: 10

Chief Competitors: Eco-Challenge Lifestyles Inc. occupies a unique niche as sports event and entertainment company. The competitive landscape of extreme sports and reality programming is constantly changing as different players enter and leave the field. Ultimately, in order to be successful, the company and its programs compete for television viewers, ratings, and sponsorship and advertising dollars. Burnett's wildly popular television series Survivor competes directly with long time sitcom favorite Friends for network ratings.

After completing market research, Burnett developed a philosophy that evolved into a business plan. In a 1998 interview with Web site Mountain.com, Burnett is quoted as saying that "he learned that smart business in the '90s and beyond was about. . .health and fitness, ecology and growth—personal growth through unconventional experiences." From this he created the Eco-Challenge Lifestyles Inc. company. The goal of the company was to promote outdoor adventure and environmental stewardship. Burnett's personal goals were also incorporated into the plan: "I had two goals in mind when I founded Eco-Challenge," Burnett told Mountain.com, "one was obviously very commercial. It's for profit business and I hope to make excellent returns on my investment. Number two, I'd hoped to have a really good time making that money."

In 1995 Burnett staged his first North American competition. Before the race began, Burnett experienced his first challenge. Utah, the host state for the event, questioned the environmental impact of the competition on the land. A local group, the Southern Wilderness Alliance protested the path of the course, which strayed through land that contained archaeological sites and supported wildlife habitats. The Utah Bureau of Land Management allowed the race to proceed, but required Burnett to post an $80,000 bond against damages. The inaugural Eco-Challenge race began on April 25, 1995, and it concluded when the Hewlett-Packard team crossed the finish line of the 370-mile course, seven days and sixteen hours later. Collectively 50 teams competed in the event. Forty of the teams were from the United States, and ten international squads made the trek. The event was filmed and edited for both MTV and NBC. A 90-minute special documenting the race aired on network television.

There are no clear financial records to show whether or not Burnett was able to make money on the event, but it is very likely he did. Despite the problems with the state government, it is estimated that television and corporate sponsorships netted the company about $1.5 million. Burnett was encouraged by the initial success he enjoyed and wiser from the initial difficulties he faced. Armed with lessons learned in Utah, Eco-Challenge Lifestyles decided to head east. In 1996 the company staged two more challenges: New England Eco-Challenge and British Colombia Eco-Challenge. The New England version was filmed in cooperation with ESPN and its Extreme Games series. The British Colombia expedition marked a partnership with the Discovery Channel.

STRATEGY

Eco-Challenge Lifestyles Inc. continues to operate as a privately owned company founded by Mark Burnett. No formal business plan or company filings exist to detail past or future plans. The direction of the company is largely determined by the personality of Burnett. He is a motivated businessman and a very savvy marketer. Several smaller businesses have been created as a result of the Eco-Challenge. In a move to expand the company and increase visibility, Burnett decided to award franchises for the Eco-Challenge Expedition races. In 2000 the first Eco-Challenge Lifestyles franchise was awarded to a national non-profit organization. The Tragedy Assistance Program for Survivors (TAPS), a group that provides assistance to families who have lost loved ones in service to the Armed Forces, produced the Armed Forces Eco-Challenge in Alaska. After the selection of TAPS for the first franchise, Burnett issued the following statement: "The Eco-Challenge brand has been developed carefully and steadily over the last eight years. Therefore we took careful consideration when nominating TAPS as our first franchise. TAPS was chosen because they have the important ingredients to maintain the Eco-Challenge integrity, a passion for adventure, good business acumen, and a positive social message. We will provide them with our experience in order to put on a very successful and safe Eco-Challenge."

CHRONOLOGY: Key Dates for Eco-Challenge Lifestyles Inc.

1992:

Eco-Challenge Lifestyles Inc. founded by Mark Burnett

1995:

First Eco-Challenge race is held in Southern Utah with 50 teams competing

1996:

Two races are staged in New England and British Colombia; Eco-Challenge Lifestyles is nominated for an Emmy Award; Burnett signs a multi-year pact with the Discovery Channel

2000:

Survivor premieres during the summer re-run season and beats the competition handily

2001:

Military reality game show Combat Missions makes it debut on USA cable network to lukewarm reviews; Burnett faces a lawsuit from disgruntled contestant who claims that the results of Survivor were fixed

2002:

Plans underway for a reunion of champions Survivor series

Burnett has also announced plans to develop several new programming options. In addition to Survivor and Combat Missions, a space travel adventure show is planned for NBC. A drama tentatively titled Langley will chronicle life at the famed CIA training center. It appears that the company will attempt to create new programming while maintaining the quality of existing properties through innovative new twists and rule changes. Evidence suggested that this strategy is working well for the company.

INFLUENCES

In many ways the Eco-Challenge Lifestyles company is a leader in a unique field. Others have been influenced by its prosperity. Despite the hybrid quality of its programming, its roots can be traced to other genres. The Eco-Challenge Expedition races can be classified as sporting events, albeit extreme. This new discipline of adventure and sport emerged from the extreme sport movement, popular with young people worldwide. The popularity of these competitions continues to grow, evidenced by the inclusion of several events in the 2002 Winter Olympic Games in Salt Lake City.

While many people refer to Survivor as reality television, Burnett would characterize it as a game show. The tradition of game shows is evident in the evolution of the Survivor series. Most notably, the show is regulated by the same rules and regulations that apply to typical daytime game shows—it is not permissible to tamper with the results or provide any of the contestants with an unfair advantage. Beyond the policies and restrictions governing the rules of play, Burnett has borrowed certain concepts from other thriving franchises. Taking a cue from longtime favorite, Jeopardy, a tournament of Survivor Champions contest was announced in April 2002. This installment will reunite past winners from the first four or five series, along with a collection of notable fan favorites. Burnett is also exploring the possibility of attempting another game show stunt, a celebrity edition. It may be difficult to replicate the success of Celebrity Millionaire or Celebrity Jeopardy. Many highly paid actors and sports figures welcome the opportunity to showcase their intellectual abilities and earn money for a favorite charity with an appearance on a favorite game show. However, spending two months in the wilderness under constant surveillance may shine the spotlight a bit too brightly on even the biggest stars.

CURRENT TRENDS

Mark Burnett uses his company to create trends, not follow them. He delights in keeping the viewing public guessing about what may happen next. It is unlikely that he will abandon the lucrative franchises he has developed. The awarding of the Eco-Challenge franchise hints that he might be willing to share leadership in some of the more established ventures. Burnett's use of corporate sponsorships continues to grow, and it is reasonable to assume this will continue.

PRODUCTS

Eco-Challenge Lifestyles Inc. produces extreme sporting and entertainment events. The annual Eco-Challenge races bring together contestants from around the world to compete for cash prizes. Co-ed teams of four or five members must complete a series of physically demanding challenges and travel from point A to point B using their wits and survival skills. This event is televised and aired over several nights each year. The company also produces several outdoor-themed reality game shows.

CORPORATE CITIZENSHIP

One of the tenets of Eco-Challenge Lifestyles is environmental awareness. Each event is planned with great attention given to the preservation of wildlife and natural habitats of the region. In addition Mark Burnett organizes a volunteer activity to improve each site that is used by the show. Trees were planted in Australia; a dumpsite in Utah and a river in British Colombia were both cleaned of pollutants. Also, broadcasts of the television versions of the Eco races often feature public service announcements concerning various environmental issues.

LOST IN SPACE

The next challenge produced by Mark Burnett and company will send a lucky contestant into space. In 2000 NBC and Burnett announced a joint venture to produce a reality game show tentatively titled, Destination Mir. A dozen American contestants will travel to Russia to train at the Star City training center. The contestants will endure 10 weeks of physical and psychological testing as they are eliminated from contention one by one. The final contestant wins the right to travel to the Mir Space station courtesy of a program operated by MirCorp of the Netherlands. General Electric, the parent company of NBC, has agreed to pay $40 million dollars to cover the costs of the production and flight into space. General Electric is also a contractor for the space program.

GLOBAL PRESENCE

Spanning the globe, Eco-Challenge Lifestyles Inc. is a youth-oriented Wide World of Sports. Productions feature locations and contestants from around the world. Global participation in the Eco-Challenge races continues to grow with teams from more than 27 countries registering for events. There are no geographic guidelines for placing the shows, and countries do not bid or apply to host events as they do for the Olympics. The company approaches the local authorities to secure government permission to hold an event. In early 2002, Mark Burnett received permission to hold a future Survivor competition in Thailand.

DESSERT ISLAND

The Survivor cast members are forced to forage for natural food most of the time, but every so often a challenge might yield a treat. During the fourth installment of the popular reality show, the tribe members were treated to Snickers Bars by producer Mark Burnett. It was no accident that this confection was the dessert of choice. Snickers and the Survivor series have entered into a promotional agreement. Snickers commercials feature clips from the series with captions such as "Going to be somewhere for a while?" In return the Snickers Bar received product placement in the highly rated show. Network executives might have something to say about this practice. A 30-second spot on the coveted show can cost upwards of $300,000, which goes to the network. By prominently featuring the candy bar during the broadcast, the production company collects the fee and removes the network from the equation. Who's laughing now?

EMPLOYMENT

The company has only a small number of permanent full-time employees. Crew and production workers are hired on a contract basis for each event. Survivor host, Jeff Probst is perhaps the most visible employee of the company. Jeff is an experienced game show host, doing double duty as the host of Rock and Roll Jeopardy for VH1. The contestants for each show are not employees, but the recruitment and selection process is probably more stringent than for an actual job.

SOURCES OF INFORMATION

Bibliography

Active.com. "Survivor Producer Mark Burnett Interview," 19 March 2001. Available at http://www.theactivenetwork.com.

Dugard, Martin. "Adventure: Feel the Burn! Treasure the Earth! Be on TV!" OutsideMag.com, December 1995. Available at http://www.outsidemag.com.

Eco-Challenge-The Expedition Race, Press Release. "Eco-Challenge Announces the Armed Forces Eco-Challenge the First World Qualifier," 17 August 2000.

Environment News Service. "Eco-Challenge Winners: America's Team Salomon Eco-Internet," 31 August 2000. Available at http://www.ens-news.com.

Keith, Alexander L. "And the Winner of 'Survivor' is. . .CBS." USA Today, 24 August 2000.

Kennedy, Alice. "Meet the Man Behind the Show." The John Hopkins News-Letter, 26 April 2001. Available at http://www.jhu.edu.

Levin, Gary. "Mark Burnett: Father of 'Survivor' Craze." USA Today, 28 December 2000.

Mountainzone.com. "Eco Challenge '98 Mark Burnett Interview," 12 December 1999. Available at http://www.mountain-zone.com.

——. "Eco Challenge '99," 12 December 1999. Available at http://www.mountainzone.com.

Reynolds, Gretchen. "Master of the Ego Challenge." National Geographic Adventure, July/August 2000.

For additional industry research:

Investigate companies by their Standard Industrial Classification Codes, also known as SICs. Eco-Challenge Lifestyles Inc.'s primary SIC is:

7812 Motion Picture and Video Tape Production

Also investigate companies by their North American Industry Classification System codes, also known as NAICS codes. Eco-Challenge Lifestyles Inc.'s primary NAICS code is:

512110 Motion Picture and Video Production