• by David Goetzl  @dgoetzl, November 7, 2011

Once again, Wall Street analyst David Bank has shown prescience with his endorsement of Time Warner’s potential acquisition of the Endemol TV studio. While a deal may carry a huge price tag, Endemol is a tremendous asset, standing at the locus of two crosscurrents: the extraordinary importance of content and, within that, networks’ increasing fascination with reality TV.

Last month, RBC Capital Markets' David Bank argued that Hulu’s owners might regret a sale. There’d be some short-term gain, but regrets could develop over the long term. Days later, the owners opted against a divestiture.

In a report Monday, Bank offered up more forward-thinking, while noting Endemol offers potential as a growth driver in a media landscape where over-the-top TV may be on an inexorable rise.

He didn't say it, but the way things are going toss in a few Netflix deals with some Hulu and YouTube on the side and there might be enough cash to cover a lot of the Endemol buy.

In many cases, over-the-top distribution is simply found money. If a producer has no excellent syndication option, Netflix might be there check in hand, if some other company isn't with a bigger one.

(Side note, per the recent comments by CBS CEO Leslie Moonves, content is coveted enough now that a scripted show no longer has to be a huge hit to get a syndication deal almost from the get-go. CBS’s “Hawaii Five-O” is headed to TNT. The show launched last fall.)

Endemol’s strength in unscripted TV should only become more vital with drama-laden networks such as AMC, TNT and USA about to join seemingly all of their entertainment cable peers in realizing the appeal of reality shows -- or at least their ability to bring more original programming at a potentially lower cost. The last holdout could have been FX, but News Corp.’s massive deal with the UFC is bringing it the “Ultimate Fighter.”

And, once a network finds reality success, it looks for a companion show and then two more shows to fill another night and ... 

Endemol, which reportedly would cost Time Warner an estimated $1.38 billion, has operations in over 30 countries. It would fit within the company’s Warner Bros. studio and inject energy into its unscripted pipeline, while giving it more international heft.

More than once, RBC's David Bank uses the words “expand” and “bolster” to describe an Endemol addition.

Reality is also looked upon by broadcast networks as placeholders. This should only increase.

The Netherlands-based Endemol will try to help NBC get something going when the network brings its “Fear Factor” back next month and NBC is going with another season of adventure dating show “Love in the Wild” early next year. At ABC, "Wipeout" is a valuable sixth man.

But Endemol also has notable hits in ABC's “Extreme Makeover: Home Edition” and its “Big Brother” franchise has been a CBS staple since 2000 and continues as a British stalwart.

Speaking of international markets, Endemol’s global footprint should also help Warner Bros. gain sort of a first-look advantage at formats working elsewhere and the chance to move quickly to bring them stateside. Outide the U.S., Endemol is very active in the scripted genre.