THE POLITICAL ECONOMIC ORIGINS OF REALI-TV

Reality TV

By Sean Diehl, John Winkler and Kyle Cameron

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.

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)

How Reali-TV emerged as a Cost-CutterThe 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.

The Squeeze on Production:Ouch! Webs and Suppliers Feel the Pinch

80’s caused rapidly rising costs and smaller revenue for program producers. Primetime: On Avg. cost over

$1million per episode Networks and syndicators lacked

$ Accept smaller license fees from

networks Changes in federal tax laws

eliminated producers investment tax credit (Difference between earning profit and loss on a program)

Couldn’t make back investments in first-run showings Loss of: $100k per 30min shows $200-$300k per hour shows

Prices driven up by: “Above the line costs”

Talent Direction Scriptwriting Music composition Computer animation Location costs

Producers now forced to deficit-finance their programs

Producers to Labor: Drop Dead

Networks and Production Companies “Cost cutting strategies” First: Staff cutbacks at studios and

network news departments Second: Bypass union labor

Attack on below-the-line workers Main people affected by cuts were

expendable workers and union workers (technicians, engineers, etc.)

Spurred a wave of strikes Producers hire nonunion labor and

shift to production regions where cheaper labor was available (Southern U.S. and Canada) Loss of investment tax credit was

also only applicable in U.S., movement to Canada equaled less spending per episode

Statistics Fox cut 20% of studio

staff Capital Cities/ABC cut

10% of staff CBS cut 30% of

administrative staff and 10% of it’s news division

NBC cut 30% of it’s news division and cut 200 union jobs

Survivor Economics: Reali-TV Fits the Bill In this environment of

financial scarcity and labor unrest, Reality TV fit perfectly.

Reality TV Cheaper Programming

Most avoided expensive professional union talent (except hosts) (ex: Survivor, Big Brother, Who Wants to Be a Millionaire)

Cheap minor celebrities (ex: Celebrity Boxing, Celebrity Fear Factor)

Cheap actors for reenactments only (ex:America’s Most Wanted) or no actors at all (ex: Cops, network newsmagazines)

No Hollywood Agents Cheap cinema techniques (ex:

handheld cameras, natural/cheap lighting)

Freelance production crews

Writers strikes sparked the explosion of Reality TV programs.

Reality TV does not rely on writers.

Could cost up to 50% less then fictional programming.

Deregulation: Reali-TV Right for Finsyn, Public Service Fights

Many Reality TV programs are coproduction's or network productions

Reality TV producers could retain the rights to distribute them under the new rules

Reality TV also helped redefine public service programming Ignored traditional definitions

of serving the public interest (America’s Most Wanted)

News magazines changed from local important topics to more popular tabloid type topics

1970, concerns rose about network power over production companies “Finsyn” (financial interest and

syndication rights) rules enacted by FCC to encourage local programming and small independent producers

FCC hoped this would encourage new diverse programming

“Finsyn” barred networks form owning financial interest in, and retaining syndication rights to most prime time programming

Failed

80’s, Networks challenge “Finsyn” rules Claim no longer should be able to

dominate program distribution as they did before cable and VCR

They needed to allowed the right to compete internationally in global t.v. market

1991 FCC allows networks to finance and syndicate their own in-house or coproduced programs, and to negotiate for rights of outside-produced shows

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.

Deregulation: Reali-TV Right for Finsyn, Public

Service Fights In 1991, the FCC allowed the netwroks to finance and syndicate their own in-house or coproduce programs and 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.

Deregulation: Reali-TV Right for Finsyn, Public

Service Fights The runaway story of the year for both tabloid programs and the network newsmagazines was Princess Diana’s death.

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.

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.

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

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.

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=McdD9Ng4VnY

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.

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’s Who 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.

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.

THE END