Advertisers Are Turning Up Their Noses at Reality Programming

What do advertisers want?

Not another season loaded with so-called reality TV, particularly shows that focus on feuding or vulgar families, pseudo-celebrities roughing it in the wild or the on-air equivalent of a bawdy singles bar.

“Anything that ends up in a hot tub, you don’t want to be around,” said Tom DeCabia, executive vice president of PHD USA, a major ad-buying firm. “Reality is not something that a lot of advertisers are beating down the door to get into.”

In fact, network executives say that few -- if any -- reality shows will be on the fall schedules they plan to unveil to advertisers next month in New York. The hope is that advertisers will pony up as much as $8.5 billion, eclipsing the record $8 billion of commercial time that was ordered last year during the industry’s pivotal “upfront” market in May and June.

ABC, which filled nearly a quarter of its prime-time lineup this year with unscripted shows only to watch many of them turn into outright failures, says it won’t make that mistake again. The Walt Disney Co.-owned network plans to roll out as many as 10 comedies instead. NBC, CBS and Fox Broadcasting are also promising a fall slate heavy on scripted shows.

But the real reality is that three-fourths of all new programs fail. And when they do, networks are likely to plug them with reality shows that are cheap and quick to produce.

“Networks are still buying these shows,” said Chris Coelen, head of United Talent Agency’s alternative TV department, which has sold more than 30 reality-based projects to broadcast and cable networks this year.

Indeed, despite the networks’ stated reluctance to load their slates with unproven reality shows as they head into next month’s ad-buying period, everyone knows that a successful unscripted program can be the equivalent of a winning lottery ticket.

During the last four years, unscripted shows from ABC’s “Who Wants to Be a Millionaire” to Viacom Inc.-owned CBS’ “Survivor” to Fox’s “American Idol” turned into TV’s biggest hits and pop-culture phenomena. When “Joe Millionaire” debuted in January, News Corp.-owned Fox had modest ad revenue expectations. By the season’s finale, the network was demanding prices higher than advertisers pay for television’s top-rated comedy, NBC’s “Friends,” or more than $500,000 for a 30-second spot.

“Not only are some of these shows getting bigger audiences than anyone ever expected, they are also attracting upscale audiences,” Coelen said.

Yet unscripted shows also have been among the year’s biggest flops. ABC’s string of failures include “Are You Hot? The Search for America’s Sexiest People,” “The Family,” “I’m a Celebrity ... Get Me Out of Here” and “All American Girl.”

Fox’s “Married by America” and NBC’s remake of “Let’s Make a Deal” have been among the disappointments, as well.

General Electric Co.-owned NBC offered spots at $50,000 for its lie-detector-dating show, “Meet My Folks,” according to Nielsen Monitor-Plus. Even at that bargain price, the show’s raunchy themes turned off advertisers and viewers alike. NBC executives eventually told the show’s producer to tone it down.

Advertisers are well aware of the networks’ strategy going into next month’s presentations in New York: TV executives present clips of enough promising new dramas and comedies to entice advertisers to spend big money -- and everyone hopes that these shows stay on the air long enough that the networks don’t have to reach too deep into the reality grab bag.

“We know that 70% of the new shows won’t be on the schedule come November, and the networks will come up with some jury-rigged solution,” said Stacey Lynn Koerner, an executive vice president and research director for Initiative Media, an advertising-buying firm. “And this year, we know the reality shows will be used to replace the ones that don’t work.”

Over the long haul, though, it’s the scripted shows that are relatively lucrative.

A recent Morgan Stanley research report found that profits from scripted shows increased by $800 million in the last five years, despite a steady erosion of overall network profits during the same period. According to Nielsen figures, even a modestly successful sitcom or drama can bring in more than double the advertising dollars that a mediocre reality show does.

Reality shows, although cheaper to produce, have drawbacks, the Morgan Stanley report noted. Marketing costs are higher because these shows tend to have short runs, requiring more promotion than a series that spans an entire season. Networks can air them only once because viewers know the outcome and are less inclined to watch repeats. And the shows have little value for syndication, which is where the big money is typically made.

What’s more, ratings for many reality shows have been slipping of late. This year’s deluge of copycat reality shows also has turned off advertisers.

“The potential audience is exhausted very quickly,” the Morgan Stanley report concluded.

The bottom line: Scripted shows are proving more attractive to advertisers these days than are unscripted ones.

“A good comedy or drama can last four, five, 10 years and provide a foundation for a network’s schedule,” Koerner said. “Scripted programming is really about the long-term health of the network as much as chasing upfront dollars.”

The industry shouldn’t be too quick, however, to dismiss reality programming, said Fox Broadcasting’s advertising president, Jon Nesvig, noting that it comes in different forms.

“There’s a difference between ‘American Idol’ and ‘Fear Factor’ and ‘When Animals Attack,’ ” Nesvig said.

Fox Television Entertainment Chairman Sandy Grushow said successful reality shows can boost the fortunes of scripted programs. For example, “American Idol” this year has had a halo effect for Fox, lifting the ratings for the shows that surround it, including “24,” “Bernie Mac,” and “That ‘70s Show.”

“The key is ... figuring out how to use your unscripted shows to help launch and build audiences for your scripted shows,” Grushow said. “The danger is becoming overly reliant on the unscripted genre.”

NBC Entertainment President Jeff Zucker said his network aims to strike that balance.

It plans to binge on reality this summer with six unscripted series “to keep the lights on, to keep original programming on the air, and to keep the audience from shifting to cable,” he said. In the fall, though, the network will return to more sitcoms and dramas.

“Reality is not what viewers expect from NBC,” Zucker said. “And it’s not what Madison Avenue wants.”