Shifting Realities

In Los Angeles, the swing to unscripted fare means new winners and losers in TV production

You can tell what’s going on in the entertainment industry by looking at what’s happening in the restaurants,” says Dick Carter. Based in Sherman Oaks, Calif., a hotbed of Hollywood production, the restaurant real estate consultant has the perfect perch for observing Hollywood’s economic ebb and flow. What’s happening, he says, is a surge in business unlike anything he has seen before.

“By the end of August, it was like somebody flipped a switch,” Carter says. “The restaurants were packed.”

As it turns out, this unscientific assessment of a shift in the local economy is right on target. This year is expected to be a record-breaker for on-location TV production in Los Angeles.

The reason? “Reality television,” says Steve MacDonald, president of the Entertainment Industry Development Corp., the private, non-profit organization charged with issuing location permits. Of course, reality shows rely on on-location shooting, as opposed to shooting on studio sound stages, which do not require special permitting.

Reality TV has hit Hollywood like a tornado, rearranging local economics as it creates new winners and losers in the TV community. By the end of the year, TV production days—for TV movies, dramas, sitcoms, reality, pilots and newsmagazines—should number more than 18,000 (compared with 14,395 in 2003). In its first year to be recognized as a category, “reality is taking 49% of the television production days,” says MacDonald, more than twice as many days as its closest competitor, television dramas (23%).

Bachelor, American Idol and Extreme Makeover are just a few of the shows shot in L.A. But with the deluge of new location-permit applications and the steep rise in total TV-production days, reality TV is having the powerful effect of shifting local economic realities. “We call it the multiplier impact,” says Jack Kyser, chief economist at the Los Angeles County Economic Development Corp.

Money ripples from production sites to local hotels, eateries, transportation services, and clothing and home-furnishings shops. “If you’re doing a reality series and you’re on location, you have to buy stuff to make it look decent,” says Kyser. “You probably have to put people up in hotels, and they’ll eat out in restaurants. All of that brings in sales tax.”

How much sales tax? “The rule of thumb,” he says, “is that whatever a production company spends on a production [including salaries, film, rentals, permits and post-production editing], you can multiply by 2.8 to get the total impact on the economy.” That means for every dollar spent on a television production, almost $3 will flow into the local economy because the people working on that production will be consuming local goods and services—from gas to granola. By these estimates, a relatively low-budget reality episode—around $300,000—will put $840,000 into the tills of local merchants and service industries.

On any given day in Los Angeles, some 30 productions are filming, 13 of which are reality. The networks and production companies benefit because reality can be produced for a fraction of what it costs to create scripted dramas and sitcoms. One episode of The West Wing can push the $2 million mark. And actors command high salaries: For example, Everybody Loves Raymond’s Ray Romano and CSI’s William Peterson demand $1.8 million and $500,000 per episode, respectively.

The swing to reality may be good for the networks, but actors and writers have been devastated because their contributions aren’t needed. Scripts are replaced by strategic editing of raw footage to create drama. Real people take the place of actors.

“The only performers with a piece of the reality pie are those doing an actual performance [American Idol, Last Comic Standing, Star Search], as opposed to just being themselves, or doing the announcing, hosting, stunt work or voice-over work,” says Rebecca Rhine, assistant national executive director for the American Federation of Television and Radio Artists (AFTRA).

Most reality shows are non-union, which generally means that the pay scale is significantly lower and benefits are non-existent.

“These are kind of like Wal-Mart jobs,” says Steve Dayan, a 20-year location manager and now business agent for Teamsters Local 399, which represents location managers, drivers and animal trainers. “The people taking them are people who are trying to break into the industry. Or they’re people who are in the union—my members—and they take these jobs because there are fewer episodic shows and they’re forced to take them in order to feed their families.”

Also, he adds, in the flood of low-budget reality productions, there are no workplace rules and little supervision: Workers can be pushed to work 20-hour days, and there are no safety standards for the drivers. “Our guys are all randomly drug- and alcohol-tested,” he explains, “so you know the guy behind the wheel, the guy driving the production van” is doing the job safely.

For the unions that have the option of working on reality shows—including the Directors Guild, the Teamsters and the International Alliance of Theatrical Stage Employees (IATSE)—reality TV has been a mixed blessing.

“It has had a serious impact on the employment numbers,” says Thom Davis, the business representative for IATSE Local 80, which oversees grips and craft services. “On a one-hour episodic, you’ll have five or six grips on a daily basis and more as needed. But on these reality shows, they’ve got minimum crews. They might have two grips, three electricians, one prop guy, a bunch of camera guys and one sound guy. So instead of having a crew of 50-plus people, they have a crew of 12.” But Davis encourages his members to take the jobs “because, quite frankly, that’s what helps us organize the shows.”

At least 15 reality shows have been organized by the unions, including American Idol, Queer Eye for the Straight Guy, Average Joe, The Swan and Fear Factor. For the most part, though, they are still “run-and-gun operations,” says Bruce Doering, a union rep for IATSE’s 5,800 camera operators and cinematographers nationwide, including 4,200 in Los Angeles. “Reality television uses a lot of cameras, but it’s really down-and-dirty work and they really exploit the crews.”

Reality TV is “undermining our traditional base: sitcoms and one-hour episodics,” says Doering. “But on the other hand, the industry is changing, and we have to respond to the challenges. And some of those shows are very, very profitable.”

Profitability, of course, is the main reason the reality genre has grown so much so fast. Many of the shows can be done on the cheap.

Tech suppliers are also among the beneficiaries of the shift to reality, particularly videotape manufacturers. A reality show eats up a lot of tape—anywhere from 1,500 to 6,000 tapes per season, where a traditional drama or sitcom will use 300-500. “We’ve definitely seen an uplift in sales due to reality of new media like tapes and even optical discs,” says Jo Ann Vozeh, director of marketing, media and application solutions division, Sony.

Rental companies are also seeing a reality uptick. “It’s definitely a boom for the rental companies in terms of the amount of hardware, software and networked storage these programs require on an ongoing basis,” says Gary Migdal, president and CEO of LA Digital, which rents out gear for use on Survivor and The Apprentice. Reality also needs about four times as many editing systems as scripted fare.

But the spoils aren’t going to everyone equally. “The people who are benefiting are the studios and the networks,” says Brent Swift, a production designer and co-founder of the Film and Television Action Committee, a grassroots organization created to deal with the problem of runaway production. Even if the shows stay in Los Angeles, it’s a win-lose situation for the people on the front lines.

“It isn’t solving the problem,” Swift says. “It’s all about jobs, and these shows are employing minimal crews. Reality isn’t bad news, but it’s not enough.”

Additional reporting by Ken Kerschbaumer