Does Reality Have An Afterlife?

Syndication deals give producers hope for a secondary market
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Every reality producer had a fear of
syndication. Except the makers of Fear Factor.

The success of the NBC gross-out hit Fear Factor
on FX and its ability to get a toehold in broadcast syndication (albeit at bargain prices) are giving reality producers hope, even though Fear Factor
is relatively unique to the genre: Its episodes are self-contained and repeat well, two features most reality shows don't share. But some producers hope that Fear Factor's success is a signal the reality business model is changing altogether.

"Industry-wide, everybody has noticed what's happened with Fear Factor
and realized there might be something here," says Joey Carson, CEO of Bunim-Murray Productions. "Now they are asking if there is a way to further monetize these shows. It's changing, but slowly and on a case-by-case basis."

While domestic cable is becoming a more common alternative for some shows, the typical after-market for a reality show rests in other countries, where companies buy either the series itself or a customized format. A French-Canadian version of Bunim-Murray's The Simple Life
(La Via Rurale) being sold in syndication by Fox is ready to air in Quebec, while the Belgians are preparing Ciao Bella!
If that trend continues, reality will have done an about-face: Instead of a format American producers bought from Europeans, it has become one that American producers export to Europe.

Reality TV, at least as viewers know it now, snuck onto the scene when Survivor
showed up from Scandinavia and surprised everyone, including CBS, by becoming enormously popular in the summer of 2000. Over the past four years, cultivating a reality mega-hit—Survivor
on CBS, American Idol
on Fox, The Apprentice
on NBC, The Bachelor
on ABC and America's Next Top Model
on UPN—has become essential. And reality TV not only brought networks quick ratings, it also was cheap and quick to produce.

There's a new reality: It is not only getting more expensive, particularly if it comes from an established producer like Mark Burnett, but reality is also getting more lucrative. With Fear Factor succeeding on FX and Twentieth close to making a $200,000-per-episode cable deal for The Simple Life, studios see opportunity where before they saw only reality hogging prime time shelf space.

"We look to find multiple revenue streams with our reality shows in much the same way we do on our scripted shows," says Arthur Hasson, an NBC executive vice president who pushes ancillary-market sales.

NBC Universal not only sold Fear Factor
to FX and to broadcast stations but has also sold Dog Eat Dog, Average Joe
and The Weakest Link
to Game Show Network as well as syndicated dating show Blind Date
to Spike. The company also is working on a cable run for its syndicated reality show, Bunim-Murray's Starting Over, on new African-American cable network TV One.

Still, what producers would really like to see is a way to wring more backend revenue out of serialized reality shows, such as American Idol, Joe Millionaire
or The Bachelor. Repurposing these shows on a sister cable network or even same-week plays on broadcast networks haven't worked well in the past.

"The regularity of viewership in syndication tends to be very low," says David Goldberg, president of Endemol USA, the company that brought Fear Factor
to the U.S. "Could you get somebody to commit to watching the show every day, and what happens if they miss a few episodes? Those types of shows burn out pretty quickly, and syndicators need to be able to repeat and repeat and repeat."

Reality shows are big business, but they are financed differently from scripted television shows.

In the scripted world, networks pay license fees to studios that don't even cover costs for the first few years. If the show is a hit, the fees go up, and the studios make their money back and much more in syndication. In the reality game, producers cover all their costs and make their profits in the network license fee. Any after-market sale is gravy.

Depending on a secondary market is bad strategy, experts say. "As you are planning out your business and how you are going to meet your overhead, you had better do it for what you are producing it for in the U.S.," says Bruce Nash, president of Nash Entertainment and producer of such shows as Who Wants To Marry My Dad?
and Meet My Folks.

"If you are really good, it will sell internationally. If you are lucky, it will sell to a cable outlet, and you'll make even more money. But I wouldn't want to base my business on international or cable sales. That's just found money, but sometimes what you find is pretty darn good."

A new potential after-market is around the corner for reality producers, with both Fox Reality Channel and Reality Central preparing to launch. While there is the possibility that 24/7 cable reality channels could dampen the public's appetite for the genre—or draw all the real fans, much as Nickelodeon and The Disney Channel have assumed much of the children's market—most reality producers see the channel as a new opportunity to place both original and off-net reality shows.

"We are very excited about that," Hasson says. "We hope they develop into great customers of ours. Every company is making so much more reality; to have a new outlet for the backend is fantastic."

Even with more after-market opportunities available, reality producers say they aren't changing the way they produce their shows.

"I'm not thinking first with my business hat, I'm thinking first with my creative hat," Nash says. "If you do a good job of entertaining people, the money will follow."

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