1. Reality TV
THE POLITICAL ECONOMIC
ORIGINS OF REALI-TV
By Sean Diehl, John Winkler and Kyle Cameron

2. Where did Reali-TV come from?
Decline of the Networks: Webs Wane as
Competition Climbs
 Reali-TV emerged as a fiscal strategy in the
late 1980’s when U.S. Television was
experiencing economic restructuring.

3. Causes for Economic
Struggle in Television
 The number of video distribution channels expanded rapidly, with the growth
of cable, VCRs, the FOX Network, and local independent stations.
 Television audiences became increasingly fragmented.
 Advertising revenues now had to be spread among a larger pool of distributors.
 This dilution of advertising spending created pressure on broadcasters and
cablecasters to cut per-program production costs.
 High levels of corporate debt incurred by the big three networks after each was
sold in the mid-1980’s. (ABC, CBS, NBC)
 Advertiser-driven changes in audience-measurement techniques designed to
identify specific market segments. (People-Meter)

4. How Reali-TV emerged as a Cost-
Cutter
The Squeeze on Production: Ouch! Webs and
Suppliers Feel the Pinch
 In the late 1980’s the average cost of an hour long drama was over $1 million per
episode. (And costs were continuing to increase at a rate of 8 to 10 percent a year)
 Producers were losing an average of $100,000 per half-hour drama and between
$200,000 and $300,000 on hour long dramas.
 Prices were being driven up by ‘Above the Line’ costs; talent, direction,
scriptwriting, music composition, computer animation, and location costs.
 Greater demand for “Stars” created Artificial labor shortages and inflated salaries
for the lucky few.
 Rising Costs + Smaller Revenues = THE SQUEEZE on production companies’
earnings.
 Producers had to accept smaller license fees for their programs
 Changes to the Federal Tax laws eliminated producers’ investment tax credits and
would often mean the difference between a profit and taking a loss.

5. The Squeeze on Production:
Ouch! Webs and Suppliers Feel the Pinch
 80’s caused rapidly rising costs and
smaller revenue for program
 Prices driven up by:
producers.  “Above the line costs”
 Primetime: On Avg. cost over $1million  Talent
per episode
 Networks and syndicators lacked $  Direction
 Accept smaller license fees from  Scriptwriting
networks
 Music composition
 Changes in federal tax laws eliminated
producers investment tax credit  Computer animation
(Difference between earning profit and  Location costs
loss on a program)
 Couldn’t make back investments in  Producers now forced to
first-run showings deficit-finance their
 Loss of:
 $100k per 30min shows programs
 $200-$300k per hour shows

6. Producers to Labor:
Drop Dead
 Networks and Production Companies
“Cost cutting strategies”
 Statistics
 First: Staff cutbacks at studios and  Fox cut 20% of studio staff
network news departments
 Second: Bypass union labor  Capital Cities/ABC cut 10% of
 Attack on below-the-line workers
staff
 Main people affected by cuts were  CBS cut 30% of administrative
expendable workers and union workers
(technicians, engineers, etc.)
staff and 10% of it’s news
 Spurred a wave of strikes division
 Producers hire nonunion labor and shift to  NBC cut 30% of it’s news division
production regions where cheaper labor
was available (Southern U.S. and Canada) and cut 200 union jobs
 Loss of investment tax credit was also
only applicable in U.S., movement to
Canada equaled less spending per
episode

7. Survivor Economics:
Reali-TV Fits the Bill
 In this environment of financial
scarcity and labor unrest, Reality  Writers strikes sparked
TV fit perfectly. the explosion of Reality
 Reality TV TV programs.
 Cheaper Programming
 Most avoided expensive professional  Reality TV does not rely
union talent (except hosts) (ex: Survivor,
Big Brother, Who Wants to Be a on writers.
Millionaire)
 Cheap minor celebrities (ex: Celebrity
Boxing, Celebrity Fear Factor)
 Could cost up to 50%
 Cheap actors for reenactments only less then fictional
(ex:America’s Most Wanted) or no actors
at all (ex: Cops, network newsmagazines) programming.
 No Hollywood Agents
 Cheap cinema techniques (ex: handheld
cameras, natural/cheap lighting)
 Freelance production crews

8. Deregulation:
Reali-TV Right for Finsyn, Public Service
Fights
 1970, concerns rose about network power  Many Reality TV programs are
over production companies
 “Finsyn” (financial interest and syndication
coproduction's or network
rights) rules enacted by FCC to encourage productions
local programming and small independent
producers  Reality TV producers could
 FCC hoped this would encourage new diverse
programming
retain the rights to distribute
 “Finsyn” barred networks form owning them under the new rules
financial interest in, and retaining syndication
rights to most prime time programming  Reality TV also helped redefine
 Failed public service programming
 80’s, Networks challenge “Finsyn” rules  Ignored traditional definitions of
 Claim no longer should be able to dominate serving the public interest
program distribution as they did before cable (America’s Most Wanted)
and VCR
 They needed to allowed the right to compete  News magazines changed from
internationally in global t.v. market local important topics to more
 1991 FCC allows networks to finance and popular tabloid type topics
syndicate their own in-house or
coproduced programs, and to negotiate
for rights of outside-produced shows

9. Deregulation: Reali-TV
Right for Finsyn, Public
 Service Fights
1970 FCC barred the networks from owning interest in
and retaining syndication rights to most prime-time
entertainment programming (daytime
shows, sports, and news were not affected).
 The “finsyn” rules limited number of hours prime-time
shows the network could produce.
 The reason for enacting the finsyn rules was to
encourage local programming and small independent
producers.
 Small independents were financed by large multisystem
operators such as AOL-Time Warner.

10. Deregulation: Reali-TV
Right for Finsyn, Public
 In 1991, the FCC allowed the netwroks to finance and
syndicate their own in-house Fights programs and
Service or coproduce
to negotiate for the rights to some outside international
produced shows.
 Hollywood studios and independent producers
exhausted a long series of appeals and the finsyn rules
were repealed in 1995.
 A recent study of 4 network newsmagazines found that
over one-half of all stories focuesed on lifestyle, human
interest, and celebrity news. Just 8% were about
politics, economics, social welfare and education.

11. Deregulation: Reali-TV Right
for Finsyn, Public Service
 The
Fights runaway story of
the year for both
tabloid programs and
the network
newsmagazines was
Princess Diana’s death.

12. International Distribution:
The Other Real World
 Producers and network investors have been attracted to
Reali-TV because of its ability to sell abroad.
 Prime-time Reali-TV earns back its production costs with
first the U.S. network showing, anything network
overseas represents pure profit.
 By 1991, Rescue 911 could be seen in
Germany, Denmark, and Sweden. Unsolved Mysteries
was available in Canada, Spain, France, and Japan.

13. International Distribution:
The Other Real World
 Networking overseas is like operating overseas in foreign
markets with McDonalds.
 In some countries, franchise holders who produce their
own local versions of the original U.S. program.
 Home-video and hidden-video shows tend to be
formatted rather than licensed, allowing foreign
broadcasters to insert their own clips into the programs.

14. International Distribution:
The Other Real World
 The Swedes developed
a version of Cops, and
America’s Most Wanted
became Australia’s
Most Wanted.
http://www.youtube.com/watch?v
=w_lTfrqdEiI

15. International Distribution:
The Other Real World
 Some Reali-TV has
been aired out for
international audiences
first.
 Time Warner/HBO’s
World Entertainment
Report, was prelicensed
across
Europe, Australia and
Japan.

16. International Distribution:
The Other Real World
 America’s Funniest
Home Videos was
inspired by segments
of the Japanese variety
show Fun Television
with Kato-chan and
Ken-chan, which
broadcast humorous
videos sent in by
viewers.
http://www.youtube.com/watch?v=M
cdD9Ng4VnY

17. What Price Reality?
 Reali-TV has not always solved the economic problems it
meant to address.
 The genre declined for several years in the mid-1990’s for
several reasons.
 Was not always successful in off-network syndication markets, as the
genre’s topicality and timeliness made it less attractive to audiences
the second time around.
 Reruns of Survivor did not attract strong viewership.
 Reality shows have a short shelf life, they just don’t seem
to sell well in syndication.

18. What Price Reality?
 The genre declined for several years in the mid-1990’s for
several reasons.
 The genre’s excesses drove away some advertisers that do not want
to be associated with its tawdry image and generally lower-income
audiences.
 There have been public embarrassments, most notoriously
FOX’sWho Wants to Marry a Multi-Millionaire, in which a man
picked his bride from the 50 woman who auditioned for the
show.
 FOX had to cancel the rebroadcast after news reports aired
allegations of abuse by the groom’s former girlfriend, raised
questions about whether he was indeed a multimillionaire and
exposed the bride’s claims to be a Persion Gulf War veteran as
misleading.

19. What Price Reality?
 Television broadcasters now must compete with cable
channels by airing new series all year round.
 The return of labor-management strike in
Hollywood, including the 2007-2008 Writers Guild of
America strike, has recently sparked a resurgence of
reality programming.
 As long as the networks desperately need to fill hours
around expensive dramas and sitcoms with cheaper
programming, to offer new fare throughout the year, to
sell in international markets, and to control labor, they
will provide us with their peculiar brand of reality.

20. THE END