Magazine article Variety

Reality Check

Magazine article Variety

Reality Check

Article excerpt

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).

"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. …

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