New reality dawns for TV economics

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When David Hyde Pierce (Niles Crane on "Frasier") accepted his Emmy award this month he joked that should comedies ever make a comeback, producers might give him a call.

Despite numerous wishful obituaries, reality TV has grown drastically over the past four years. According to Magna Global research, reality shows made up 19% of the broadcast networks' prime-time schedule (October-March) compared to 14% last year and 5% in 2000/2001. "What's interesting is what [shows' viewership] have gone down," says Steve Sternberg, exec VP-director of audience analysis at Interpublic Group of Cos.' Magna Global. "News magazines, game shows and movies." And viewers continue to flock to new reality entrants. Lifetime's "How Clean Is Your House?" was No. 1 among cable networks in its time slot Sept. 20 with women aged 18-49.

reality is real

Just 18 months ago, Jeff Zucker, then NBC Entertainment president, was one of many network executives publicly swearing off the reality genre. "We believe in reality-you cannot ignore it," Mr. Zucker told the Associated Press, "but our strategy is to use it principally in the summer to keep the lights on." Then his much-heralded sitcom, "Coupling," went down in flames, while "The Apprentice" ended up holding up the house on Thursday-TV's most important night.

It is also NBC's highest-indexing show-meaning a large population of its audience is wealthy. Advertisers once didn't like the thought of associating with what they regarded as often sleazy down-market fare. (Remember "Who Wants to Marry A Multi-Millionaire?") But American Express Co. backed two workplace reality series, "The Restaurant" and "Blow Out," and uses "Blow Out" star Jonathan Antin in its ads. Omnicom Group has a unit, Full Circle, aimed at helping advertisers take an ownership stake in reality shows.

Laura Caraccioli-Davis, senior VP at Publicis Groupe's Starcom Entertainment, says that over the past few years reality shows have turned the programming equation on its head, affecting everyone from newly-unemployed writers to the syndication pipeline. For one thing, reality shows are often produced outside each network's family of companies, and "operating units really need to figure out how they're going to own it."

"Consumers have accepted it as a real genre, operating units are still trying to monetize it and decide whether reality has a right to be a genre," she says. "The audience has spoken and has a huge appetite" for reality, said Andrea Wong, exec VP-alternative programming, specials and late night at Walt Disney Co.'s ABC.

Mark Burnett (executive producer of "The Apprentice" and "Survivor") is changing the way Hollywood works, Ms. Caraccioli-Davis says. "He's selling airtime and brand integrations. He's keeping so many of the rights and making all the money on the front end."

Bill Brandt, senior VP-reality programming for Lifetime, concedes "it is a different model. There are opportunities for advertiser integration and advertiser-supplied shows. People are leaning toward new business models."

a shed vs. a mark

Mr. Sternberg said that last season, reality was a counter-programming device against scripted series-now, reality shows are going head-to-head against each other on practically every network. But, he adds, "if this year is a watershed, perhaps next year will be the watermark," alluding to the fact that many networks are planning to plug in more scripted series come mid-season. "Too many reality shows opposite each other split the audience."

Ms. Caraccioli-Davis suggests advertisers risk killing a golden goose. "At the height of game shows, advertisers were so involved that credibility was questioned," she says. Similarly, in reality shows, "so many advertisers are involved, we're going to push it so far. ... If the shows become infomercials, we'll ruin it for ourselves."

So far, though, that hasn't happened. CBS's "Survivor" is in its ninth season. "Fear Factor" is in its second cycle on FX network. And "The Apprentice" has just been released on DVD. As if it weren't enough that reality shows still thrive, could it be they have a-gasp-afterlife?

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