Flipping through the channels on television, reality TV is one of the most produced types of entertainment. Television may appear glamorous with stories of successful shows catapulting careers to syndication, but how much money can one make in unscripted television in reality?
According to reality show producer Troy DeVolld, the economics of unscripted television has changed because of the shear number of platforms taking a bite of the audience major networks once commanded while enjoying big ad revenue. At first glance, television is attractive because now content distribution is a global market. If a network were to retain the US rights, a producer could potentially sell a show overseas. Except, the networks now prefer to own the shows outright, so creators no longer have full discretion on monetizing content abroad.
Production companies can make the big money that we often associate with television. Like most businesses, the best production companies are built to sell, and their libraries are perhaps their most valuable asset. For example, The Cosby Show earned its creators 600 million dollars in a syndication deal. Large media conglomerates have purchased many if not most unscripted production companies with popular libraries.
Many popular formats are adapted from properties that began overseas, as with shows from Denmark, Israel, and even Japan. “A producer named Avi Armoza,” DeVolld continues, “has built his entire business model on repackaging and selling formats of shows popular outside the US.” If you want to find a show that will sell then, watching foreign television and figuring out how to adapt shows for an American audience would be a smart approach. The networks are doing it, and these shows have already proven their concept elsewhere.
Production companies often pitch their shows to networks with a budget in mind, but ultimately, the networks decide what they are willing to spend. This results in an iterative process between networks and production companies tailoring budgets, talent, and formats to make the show a reality. An entire season of a reality TV show could be shot for the same dollars that a major star would make of one episode of scripted content. Reality TV costs so little to produce, which is why there is so much of it.
The least expensive show that DeVolld worked on was shot at $75,000 an episode. According to DeVolld, filming a travel-heavy show, like Somebody Feed Phil or Parts Unknown, could add up to hundreds of thousands of dollars an episode. For a huge studio show like Dancing with the Stars or American Idol, it could cost upwards of a million dollars an episode.
Typically, 10-15% of a show’s budget goes to the production company’s bottom line. But these companies are now operating on thinner margins–sometimes as low as 5%–because the networks often ask for costly creative revisions beyond industry norms. A camera crew in the field can cost $75,000-$100,000 a week. So it’s not exactly cheap to appease to network’s creative whim.
DeVolld suggests, “When pitching a format to network, aim to sell ‘a’ show rather than be too adamant about selling ‘the’ show you’ve come in with.” A network could very well turn around and ask for product placement, because of a sponsored deal. Such advertising or product placement can help keep costs down and bring additional dollars into production, but that does not necessarily increase production company margins.
For cast members, salaries are locked down, typically, for the first two-three seasons. Starting salaries for cast members can be as little as $500-$3000 a week. Which could be lower than minimum wage, or certainly far less than Kardashian money. If they survive, and the show becomes successful enough to enter its fourth season, the money can start to get interesting. This is where talent can start making ambitious demands like $5-$10 million a season, and other personal perks. There are legacy shows such as The Deadliest Catch or accomplished executive producers such as Mark Burnett, but they are amongst a few big fishes in the gigantic pond that is reality TV.
Unscripted television is a lower-risk endeavor than its rival big-budget scripted television. But the dream of making it big won’t become a reality overnight. The probability of a mega-hit like Survivor is increasingly rare since the novelty of reality TV has eroded since its peak.
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