Within the changing economy of reality television

Browsing through the channels on television, reality TV is one of the most widely produced forms of entertainment. Television may seem glamorous with stories of hit shows that catapult careers into syndication, but how much money can one actually make from unscripted television?

According to reality show producer Troy DeVolld, the economy of unscripted television has changed because of the sheer number of platforms taking a bite of the audience once commanded by major networks, while taking advantage of large ad revenues. At first glance, television is attractive because content distribution is now a global market. If a network kept the US rights, a producer could potentially sell a show abroad. But the networks now prefer to fully own the shows, so creators no longer have complete freedom to monetize content abroad.

Production companies can make the big money we often associate with television. Like most companies, the best production companies are built to sell, and their libraries are perhaps their most valuable asset. For example, The Cosby Show made its creators $600 million in a syndication dealMajor media conglomerates have bought many, if not most, unscripted production companies with popular libraries.

Many popular formats have been adapted from properties that started abroad, such as shows from Denmark, Israel and even Japan. “A producer named Avi Armoza,” DeVolld continues, “built his entire business model around repackaging and selling formats of shows that are popular outside of the US.” If you want to find a show that will sell, a smart approach would be to watch foreign television and figure out how to adapt shows for an American audience. The networks are doing it, and these shows have already proven their concept elsewhere.

Production companies often pitch their shows to networks with a budget in mind, but in the end the networks decide what they are willing to spend. This results in an iterative process between networks and production companies that match budgets, talent and formats to realize the show. An entire season of a reality TV show could be shot for the same dollars a major star would earn from one episode of scripted content. Reality TV costs so little to produce, which is why there is so much of it.

The cheapest show DeVolld worked on cost $75,000 per episode. According to DeVolld, filming a travel-heavy show like Someone is feeding Phil or parts unknown, can run up to hundreds of thousands of dollars per episode. For a huge studio show like Dancing with the stars of American Idol, it can cost upwards of a million dollars per episode.

Typically, 10-15% of a show’s budget goes to the production company’s profits. But these companies are now operating at thinner margins — sometimes as low as 5% — because the networks often call for expensive creative overhauls that go beyond industry standards. A camera crew in the field can cost $75,000-$100,000 a week. So it’s not exactly cheap to appease the creative whim of the network.

DeVolld suggests, “If you’re offering a format for networking, try selling ‘a’ show rather than being too determined about selling ‘the’ show you came in on.” A network could very well turn around and ask for product placement because of a sponsored deal. Such advertising or product placement can help keep costs down and bring extra dollars into production, but it doesn’t necessarily increase the manufacturing company’s margins.

For cast members, salaries are usually locked for the first two to three seasons. Starting salaries for cast members can be as little as $500-$3000 per week. That could be lower than minimum wage, or certainly much less than Kardashian money. If they survive and the show becomes successful enough to enter the fourth season, the money could get interesting. This is where talent can make ambitious demands such as $5-$10 million per season and other personal benefits. There are old shows like: The deadliest catch or veteran executive producers like Mark Burnett, but they are among some of the big fish in the giant pond that is reality TV.

Unscripted television is a lower risk venture than its high-budget rival scripted TV. But the dream of making it big won’t come true overnight. The chance of a mega hit like Survivor is becoming rarer since the novelty of reality TV has eroded since its peak.

The opinions expressed here by columnists are their own, not’s.

Shreya Christina
Shreya has been with for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider team, Shreya seeks to understand an audience before creating memorable, persuasive copy.

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