Unscripted Producers Feel Squeeze of Growing Expenses, Reduced Pay

Survivor Reality TV Business Model
Courtesy of CBS

Reality bites — at least for many of its producers.

It’s been more than 15 years since the heyday of unscripted TV, a frenzied era when megahits like “Survivor” launched, surprises like “Joe Millionaire” came out of nowhere, and it seemed like almost any topic could become a phenomenon.

Now, with fewer instant hits and the focus on this golden age of scripted TV, malaise and fear have swept in. Reality TV has become a mature business, which means the shows are more expensive, profit margins have been squeezed, and ratings are down — yet producers are being asked to do more.

You could forgive the average reality producer for being a bit down in the dumps. But according to a new survey of the top reality producers in the U.S., conducted by Variety and PactUS (an association of independent TV producers), that’s only half of the story.

Although producers are feeling the financial squeeze, with most contending that it’s harder to do business now, they report that 2016 was a “more successful” year than 2015 — and they’re even optimistic about the future of their business (although not necessarily the industry as a whole).

“We all need a big game-changing hit, and it’s been a long time since we had one of those. What you don’t want is a show that’s got to do a 6 rating in order to be financially solvent.”
Rob Mills

“It certainly can be frustrating when your network partners make it hard for you to do business,” says Chris Coelen, CEO at Kinetic Content (“Married at First Sight”). “But I think, in general, people are aware that the entire biz has its own challenges, no matter which side of the business you’re on. I’m more on the optimistic side. I think the business presents huge opportunity for people who are entrepreneurial.”

The room for growth is there. Streaming services are still just getting their feet wet in unscripted. The documentary field is more vibrant than ever. And some unscripted producers are finding success by transitioning to the scripted world.

“The producers are going to have to adapt,” says David Lyle, president of PactUS. “There’s no doubt a producer who says, ‘I’m just going to do what I’ve always done,’ and ‘I’m the man, and they can come to me,’ is going to have a very hard time.”

Industry groups like PactUS and the Nonfiction Producers Assn. have started keeping tabs on their membership’s concerns. Not only are they devising new ways to work with buyers like the broadcast and cable networks, but they’re on the lookout for growth opportunities in areas like virtual reality and among the ever-expanding digital/streaming services.

“There may be upsides to the downside — how certain outlets may not pay as much but might be far more relaxed with rights,” says Lyle, former CEO of National Geographic Channel and ex-president of Fox Reality Channel.

The joint Variety/PactUS poll asked dozens of reality producers, anonymously, whether deals were harder to strike in 2016 vs. the previous year. Approximately 75% answered in the affirmative.

In particular, gripes center on rigid deal points that don’t give the producers much of a stake in their shows. “Networks are always looking to squeeze more out of less — and are always looking to change deal templates, which are already bad, for the worse, no matter how long-standing or successful the relationship is,” says one respondent.

Another producer laments that networks remain aggressive about holding onto rights, and “as a distribution and production company, that makes deal-making a challenge.”

One reality producer was even blunter: “It seems as if the networks are trying to kill the possibility of any independent company having any sort of upside, annuity, or stability. From horrible lock language to unsustainable milestone schedules to removing all ownership or potential backend, it’s as difficult
a time as ever to build and sustain a production company.”

Among other complaints, producers say networks are making smaller orders, have smaller budgets, are buying less, taking longer to do deals, and demanding foreign rights.

“Right now, we’re at the crossroads of the business model breaking,” says ITV America CEO Brent Montgomery. “It’s a really difficult time to be a small company, and even though I run a big company, I’m quite interested to see what happens to these small guys, because they quite often create the next hit show that feeds the entire ecosystem.” Budgets are so tight, says Montgomery, that a producer’s fee isn’t even 10% anymore. “Often it gets down to 6% or 7%,” he says. “A company needs to be doing eight or 10 series to stay afloat now, and that’s not going to create a vibrant market.”

At the same time, the survey finds that some producers are sensitive to the state of overworked networks. “Business-affairs departments are jammed, and the number of people in those departments have been reduced, so it takes forever to get deals done,” says Lyle. “In a way, it’s showing a certain sympathy for the dilemma of the buyer.”

Rob Mills, ABC’s senior vice president of alternative series, specials, and late-night, says ratings declines have triggered different kinds of deal-making. “Certainly no one is trying to bilk the producers,” Mills says. “They work hard, and they certainly deserve to be compensated generously for hit shows. I’m all about all of us being in it together.”

Mills says he favors deals that feature ratings bonuses, so that if a project turns into a hit on the scale of “The Voice,” everyone can win. “We all need a big game-changing hit, and it’s been a long time since we had one of those,” he says. “What you don’t want is a show that’s got to do a 6 rating in order to be financially solvent.”

Spike TV original series executive vice president Sharon Levy agrees that the networks have a bad habit of “time-dripping producers to death” — taking too long to make deals, instead of trusting their gut and signing on the bottom line. “The truth is, you have to have passion for creativity,” she says. “Find something you love, and put the money and the dominoes behind it.”

Asked to describe the “biggest threat to your business in 2017,” producers have a variety of complaints, including the “collapse of cable TV,” “profit margins reducing, and operation costs rising,” “networks shrinking business,” “network studios bringing production in-house,” “mega-production-company groups that dominate the industry,” and “industry stasis.”

Producers are particularly concerned about the impact of skinny bundles and how they may trigger cable networks to fold. “There aren’t many buyers who seem to know what their future holds,” says one producer. “There’s a lot of instability in the industry right now.” Case in point: NBCUniversal’s decision last week to shut down the Esquire Network.

Henry Schleiff, group president of Investigation Discovery, American Heroes Channel, and Destination America, calls the contraction of the business a concern, but he’s optimistic about the new players joining the pipeline, including Netflix, Hulu, Amazon, and, likely, Apple. “I don’t think the concern about the marketplace diminishing is all that serious,” he says. “In this world, what you need to be most concerned about is the challenge of telling a story well. The art, the genius, the talent in telling — that’s still difficult to find.”

“Even though I run a big company, I’m quite interested to see what happens to these small guys, because they quite often create the next hit show that feeds the entire ecosystem.”
Brent Montgomery

Montgomery is similarly bullish on the digital outlets. “We get to pitch Amazon and Netflix, who are not so concerned right now with profit margins and ratings,” he says.

As far as the biggest opportunities producers expect in 2017, new digital platforms and buyers lead the list, and that could mean more “premium storytelling.” Others say the “desperation across the buying landscape” could be a good thing, as programmers “finally realize they need to take a huge swing.”

The Variety/PactUS survey found that A&E was considered the most respected buyer in the business, calling the network “creatively empowering” and “very collaborative.” The network is finding ways to get creative with business models and boasts “strong programming executives and solid leadership.” Producers gave the network high marks, even though a few admitted that A&E was “easy to deal with but hard to sell to.”

A&E executive vice president/GM Rob Sharenow gives credit to the fact that most of the network’s executives were once producers. “I think that brings with it a real understanding of the process,” he says. “There’s a sense of what real collaboration means. It’s not just dictatorial.”

Other networks scoring high marks included ABC (“passionate, fair, and respectful”), FYI (“bold”), Lifetime (“easy to produce for and get deals done quickly”), History (“honor their word and allow us to make our shows”) and TLC (“on brand”).

The rankings of networks considered most difficult were topped by Amazon (“no understanding of the business” and “unresponsive”), followed by Spike (difficult “notes process” and “know-it-all”), Discovery (“harder to make a deal with”), MTV (“frustrating and confounding from a development point of view, and challenging when it comes to production”), and We TV (“unreasonable on budgets,” “over-demanding,” and “crazy executives”).

Asked which networks they respect the most, the producers again chose A&E, lauding the network for “for taking risks and empowering producers.” HGTV was congratulated for running a “professional operation” with “solid brand definition,” and Netflix was cited for “bold and interesting programming.”

Networks that fared well in these surveys are mostly the larger ones with much bigger budgets, while smaller networks with limited resources did not do as well.

Variety and PactUS also asked the producers to grade themselves, picking which production company they most respected. Probably no surprise, “The Real World” stalwart Bunim/Murray was tops, with contemporaries lauding the firm for being “kind and talented and a legend” and a “model of sustained success.”

Mills was named one of the producers’ favorite programming executives, along with Eli Lehrer (MTV2), Gena McCarthy (FYI), and Amy Savitsky (A&E). The ABC exec thinks the business should return to the independent spirit of the early 2000s, when trend-setting producers came to reality from diverse fields.

“Mike Fleiss [creator of “The Bachelor”] was a sportswriter,” Mills recalls. “The ideas were all different. Now people have worked their way up on a long-running show, and they only know one way of doing it. When reality really works is when it’s been something completely evolutionary, different, and genre-bending.”

Levy offers a call to action and challenges producers to shake off their depression. “I think it’s really easy to place blame,” she says. “I love accountability. I hold myself accountable; I hold my staff accountable. Pull your bootstraps on and free your mind. Unscripted is important to the ecosystem of television. So forget about what failed, what worked. And strive to make something great.”

The Results Are In
Variety teamed up with PactUs to survey top reality producers on the state of the unscripted business, to get a sense of their frustrations as well as their predicitions for the future. Here’s a sampling of their answers.
Did network program budgets go up or down in 2016?
Up: 6%
Down: 57%
No change: 37%
Did producer profits/margins granted by the networks go up or down in 2016?
Up: 3%
Down: 66%
No change: 31%
Was it easier or harder to make a deal with buyers in 2016 (vs. 2015)?
Easier: 8%
Harder: 75%
No change (still hard): 17%
Did terms of trade become more or less fair and equitable in 2016 (vs. 2015)?
Less fair: 63%
More fair: 3%
No change (not fair): 26%
No change (fair): 9%
Was 2016 a more or less successful year than 2015?
More successful: 70%
Less successful: 19%
No change (successful): 11%
How important is it that a format has launched elsewhere before the U.S.?
Crucial: 14%
Very important: 37%
Helpful: 31%
Doesn’t matter: 17%
What are the five best networks/buyers to deal with?
1. A&E
2. ABC
3. FYI
3. Lifetime
5. History
5. TLC
What are the five most difficult networks/buyers to deal with?
1. Amazon
1. Spike
3. Discovery
3. MTV
3. We
6. Oxygen

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  1. Eva Gonzalez says:

    Tired of reality TV can not find good programs on TV anymore. Lets get back the great , Mysteries , and good TV. Disappointed in all good shows being cancelled and making room for Reality.

  2. Led D says:

    The only real reality show left is the one that started it all ” The Real World “. I should know cause I’ve worked on it for the last 22 years. Also if networks want to save money on new reality shows, cut out the multitude of junior network executives that give copious amounts of Infantile notes only to be superceded by their superiors. This is one of the many reasons budgets go over. That, and concept s are so poorly thought out before shooting ever begins. I can go on but even this will fall on deaf and un-educated ears. You can bash Reality TV all you want but there are a multitude of very hard working creative individuals trying their best to make a decent product only to be circumvented by the ineptitude of network executives.

  3. Compromise budget problems with new combination unscripted and scripted shows.

  4. DennyOR says:

    Our favorite shows for years have been reality — shows like Survivor, Gold Rush, and The Voice. In my opinion it’s scripted TV that displays humanity at its worst.

  5. Sam says:

    Reality TV is humanity being displayed at its worst. That’s not ‘entertainment’. It’s TOTAL GARBAGE. I don’t watch any of it and never will.

    • Jason says:

      “Reality TV” actually is scripted and rehearsed and is anything but reality. It’s junk TV, it has ruined programming, and the industry can only benefit by its demise.

  6. Reality Show President says:

    Who needs reality TV anymore? With Trump, everyday is like an episode of The Jerry Springer Show.

  7. Frank says:

    I detest “reality TV” shows. They don’t reflect any sort of reality I’ve ever seen. To me, they are nothing more than bad amateur acts and often simply a celebration of human being’s worst behavioral traits. I’d much rather watch a well made documentary – where I might learn something interesting about the real world.

  8. Lucia says:

    The situation is that there are different kinds of reality shows – there are the peek-into-our-lifestyle shows that can be anything from Kardashians to Jersey Shore to Duck Dynasty. Then there are the DIY shows. Then there are the “geographical” shows that talk about food and cultures. Then there are the competition shows – Project Runway, The Voice, Survivor.
    The problem is that except for the competition shows that show a competitive challenge, all the other ones are now the kind of stuff you can see on social media, uploaded by people who are a lot more interesting and informative than these reality “stars.”

  9. Union shill says:

    Hollywood is out of touch with reality. Reality TV is anything BUT! The ignorance of their Union Members has driven “Real Reality Tax Paying Citizens” to turn off TV and quit seeing moviess!

  10. HowardB1 says:

    Pure drivel tends to drive ordinary drivel off our TV screens…

  11. Reality shows are not reality at all. Most are scripted and all about backstabbing to win; Survivor certainly is.

  12. mschrief says:

    I just couldn’t get in the latest Survivor. The audience is 50+ so don’t show me GenXers and Snowflakes.

  13. Dave says:

    Uh, I have not watched TV in years because all I see there is white male bashing, perfect women with fictitious abilities, celebration of all things I abhor and vacuous plots.

  14. Qwagg Meyers says:

    If you are truly interested in dynamic, engrossing, entertaining reality shows, I would strongly suggest watching our political dramas, and get familiar with it’s characters. None better.

  15. ragu4u says:

    I have spent my last dime on “Sicarios”. Each one hired to kill off the reality shows and those who create them (figuratively speaking that is) ever since they began years ago. They just don’t make hitmen like they used to, I guess. Maybe now these tired old, worn out types of shows will just die of old age.

  16. Mark Meyer says:

    The world needs more movies like “La La Land”. This reality stuff is dead and gone….but Hollywood hasn’t figured that out yet.

  17. Marc Blixt says:

    It’s all scripted trash. Haven’t watched the garbage in many years. It will be none too soon when all of it finally goes off the air.

  18. Jjeffs63 says:

    If it takes the death of the genre to get The Kardashians off the air, we’ll just have to get over it.

  19. SFChuck says:

    Problem is: Reality shows typically have narrow appeal. That’s not good for ratings. Sure, they were interesting at first but now they’re mostly boring. And as viewers drift away, so do advertisers. TV execs are going to have to bite the bullet and fund produced shows with wide, lasting appeal in order to regain lost viewers…and sponsors.

  20. RM Ireland says:

    Reality TV marked the nadir of television It was cheap and costs of producing real television were running out of control. Reality TV helped to stupidify people during times that were difficult socially and economically. The phony drama is gone. Television may never awaken from its coma. Commercial television is on its way out. Meantime, operators like HBO and Netflix are able to challenge Hollywood with more compelling programming.

  21. ascpgh says:

    “Reality” TV was the bowel movement of producers in a jam while writers were on strike. Since then there have been so few quality products on TV that streaming is a better (and on your demand) way to match the quality of programming and the value of your time, when you have it.

  22. kestrel27 says:

    What reality. Take a bunch of people with zero talent, massive ego’s and throw them in front of a camera with a minimally scripted concept, and voila, you have boring reality TV.

  23. Scott Wilson says:

    YogaTopia
    Go!

  24. Torgo Jones says:

    You guys are basically getting your format cribbed by every small-time kid out there with an IPhone, a tripod, and a YouTube account. Think it’s time to surrender to THAT reality. TMR: Too Much Reality TV.

    Replaced by what? Not my problem.

  25. I’m working on High School Russian Roulette

  26. charlesamiller says:

    “Unscripted TV” indeed. Reality television has been scripted since Day One. Poorly scripted.

  27. chrismaya says:

    The only REAL “reality” TV show is probably Alone (on TLC).

    Ten contestants are dropped off in remote locations carrying just ten items of their choice with them. The last person remaining wins $500K.

    Each contestant is provided four cameras to document themselves and one or two others are installed at their camp site (with night vision). The producers send medical professionals to check on them once a week.

    That’s it.

    The “contestants” live off of the land. They build their own shelter — using the tools that they brought with them (among the ten items that they choose to bring). They eat plants, fish, birds, wild boars and even mice.

    The show is very entertaining and thought provoking. There have been several contestants who had to be evacuated for medical reasons (including one woman who accidentally severed a tendon with a hatchet).

    I used to watch Deadliest Catch and enjoy it. However, it seems so contrived now — where the captains and crew are aware of the cameras, their presence in front of the camera and their own fame. After Captain Phil passed away (an amazing yet heartbreaking season), the show sort of lost that “natural” appeal.

  28. Mr Happy Man says:

    “Reality” TV, like any other entertainment fad, belongs to its own era. It should not be surprising to see it decline now, as it was a popular form of entertainment for nearly a generation. And each generation has its own tastes, so when one set of viewers get bored with a type of entertainment, it’s difficult to find a new audience to replace it. Especially when it’s producers are no longer capable of generating interesting themes, or people get tired of the ever more bizzare nature of the medium.

  29. Tim Day says:

    They are scripted in a way to manipulate the viewer … and exactly how is this different than the way their news department are run?

  30. Roger Jones says:

    I have not watched any reality TV in many years.

  31. The Dumb Dumb Tribe Wins Immunity! Woohoo! so many years of that junk game show. They all suck

  32. Jack Daniels says:

    End them… no more reality tv. First of all, they are scripted and just plain lazy programs.

  33. frankiesweep says:

    Need a big hit like The Apprentice.

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