NBC dominated Thursday night primetime television in the 1990s with scripted sitcoms and dramas like Friends and ER. This began to change in the 2000s as reality television grew in popularity due to lower production costs. NBC chairman Jeff Zucker announced in 2005 that the network would devote the first hour of primetime each night to unscripted reality shows and reduce scripted programming. This shift reflected the growing importance of reality TV and prepackaged formats to television's business model and its ability to generate revenue through product placements, merchandising, and audience engagement across multiple platforms.

1. Television 2.0
The Business of American Television in Transition by
Ted Magder

2. Before Reality TV
Around 1990s NBC Prime-time Television had a
fixed point of reference, it was Thursday night.
Advertisers were trying to reach audience
before the weekend.
NBC called Thursday night “Must See TV.”
Began with shows like “Friends,” at 8:00 pm
and ended at 11:00 pm when “ER” was over.

3. Before Reality TV
 This was an entire evening of mix of situation of
comedies and one-hour of drama. This lasted 15 years
with programs such as:
 Cheers
 Seinfeld
 Hill Street Blues
 The Cosby Show

4. YouTube Videohttp://www.youtube.com/watch?v=rcc41TitXPs

5. The Start of Reality TV
What came next was more surprising…
Zucker announced that NBC would reduce Scripted programs.
The first hour of prime time each evening would be devoted to
reality TV, games shows, and other types of format
programming.
He wanted to gain popularity on Social networking web-sites
and to Google’s $1.65 billion purchase of YouTube, that same
month, he called it“NBCU 2.0.”
ABC,CBS, and FOX had made similar moves, though without
the same public fanfare.
Zucker’s announcement for unscripted programs accounted
for 15 hours of prime-time programs a week, by comparison ,
the number of prime-time hours devoted to sitcoms was
roughly 10 hours a week, down from 20 hours a week in 2004

6. The Start of Reality TV
 Since the summer of Survivor and Big Brother in 2000,
reality TV, or what is also referred to as “unscripted”
programming, has become a television staple in the
coveted time slots. What some perceived as a fad has
become the norm.
 Whatever it cultural and social resonance, reality
programming is now firmly entrenched in the business
model of American television, yet another sign that the
enterprise of television faces an uncertain future.

7. Reality TV comes to America

8. Friends and ER
NBC Thursday night line-up increased its prices.
Friends costs 5.5 million
ER 13 million
Making it television’s most expensive hour-long
drama and half an hour of network television.
Broadcasters: do not necessarily own the programs
they air, but they get a license from other firms.
In the case of Friends and ER paid a fee to Warner Bros.
Television, the show’s producer and owner, for the
right to air each show twice over the course of a season
and to control all advertising placed around them.

9. Survivor
 Represents entirely different Model
 The most obvious differences is that for Survivor, and shows of
its ilk, the on screen “talent” is dirt-cheap.
 Instead of handing its Producer, Mark Burnett, a license fee to
deliver the show, CBS agreed to share Survivor’s advertising
revenue and asked him to help presell the sponsorship.
 Burnett secured eight sponsors before the first day of principal
photography, selling most of the 30 second spots around the show
as well as prominent brand placements in the show itself.
 These 8 advertisers, including ANHEUSER-BUSCH, GENERAL
MOTOR,VISA, FRITO-LAY, REEBOK, and TARGET, paid
roughly $ 4 million each for a combination of commercial time,
product placement in the show and a website link. Next version of
Survivor advertisers shelled out close to $ 12 million before the
show went of air.

10. More to come
2005: New shows
THE APPRENTICE (NBC)
WIFE SWAP
TRADING SPOUSES
EXTREME MAKEOVER
HOME EDITION (ABC)
Almost 20 percent of prime-time program hours
consisted of reality programming.

11. YouTube Video
http://www.youtube.com/watch?v=i5gX689YLXo

12. The Business of TV in
America
Since 1960 TV takes up almost 50 percent of the
time Americans spend with media products
and cultural events.
On average each American households
watches just over 1,600 hours of TV a year, the
challenge for Television’s managers and
programmers is to grab the attention of
viewers and hold on them for as long as
possible. That attention is sold to advertisers.

13. TV as a business does what any
business tries to do:
Is wrong to say that TV in America gives people what
they most want to watch or that TV responds primarily to
the interests and needs of viewers. Instead in light of the
house hold habit of TV viewing and the interests of
advertisers, TV executives try to produce or schedule shows
that are only marginally better than offering available at the
same time. The goal of American TV is to give people
programming that they are willing to watch or at the very
least, programming from which they will not turn away.
From time to time, hits emerge and certain programs
develop loyal following. But the day to day business of TV
doesn’t run on hits and loyalty. It runs on habit.

14. The effect of TV depends on Advertising:
Grant Tinker, who piloted NBC’s emergence as a
network power in the mid-1980s once said: “Tele-
vision would be wonderful if it were only on
Wednesday night.”
He was referring specifically to the problem of creativity:
there are only so many good writers, actors, and other
talented people to go around, while the medium of TV
requires thousands of hours of new program each year.

15. Once a Program is Finished???
The cost of Making extra copies and distributing them
is virtually zero. Because most TV programming is
serialized, first copy costs are incurred for a number of
episodes in advance (the creativity deficit would that
much greater if TV consisted mostly of one time
programs) And until the program airs, it is virtually
impossible to predict its success--- sunk cost are high
and so is the risk of Failure.
Richard Caves refers to this Problem as “Nobody
Knows” Principle.

16. How to deal with Nobody Knows
Principle?
1. Deliver audiences in Buying Mood to advertisers:
viewers need to be tuned in but not unduly upset or
disturbed by the program’s content?
2. Stick to established program genre and avoid
challenging the genre expectations of viewers.
3. Recycle and copy successful show: On television,
imitation is the sincerest form of flattery

17. Reality TV, Formats, and the New Business
of Television. European Producer and The
Lure of Formats
Reality TV was used to Reduce production cost and
Financial risk
Reality TV illustrated four significant changes to the
production side of TV
The growing Enthusiasm for prepackaged formats as a basis for
program production
The emergence of product placement or brand integration, as a
source of revenue to program producers
The increase tendency to use TV programs as the springboard
for multimedia exploitation of the creative property
The growing strength of European program suppliers in the
American and international television market.

18. Follow The Money: Before
and Beyond The box
Three business strategies that together may
fundamentally alter the logic of TV production.
1. Almost every show in the genre demonstrate the
growing importance of product placement or brand
integration.
For example: I Love Lucy one of the most popular show
on U.S television was sponsored exclusively by Philip
Morris cigarettes, with a variety of ad campaign built
around the show star Lucille Ball and Desi Arnaz

19. Three business strategies
2. The search for new revenue is the expansion of
merchandise tie-ins.
For example There are now well over 150 Survivor-
themed products that are available in the United
States, everything from CDs and bug spray to board
games and bandanas.
Fear factor has teamed with ice cream manufactured
Baskin-Robbins.

20. Three business strategies
3. The search of new revenue streams is easily the
most revolutionary: it extends the “program” beyond
the confines of the box in the living room and
encourages audiences to pay to participate in the
show’s dramatic arc or to use other media to stay in
touch with the show.
Example online voting, texting

21. On The air, online and On-
the-Go
Reality Programming
Attracts young viewer
Lowers production costs,
Offers opportunities for audience to engagement across a
variety of platforms,

22. End
The networks want to charge advertisers an additional fee
for the DVR audience. The advertisers want to know
whether DVR users were watching the ads at all.
But what Nielsen Company refers to as Anytime/anywhere
Media Measurement has reached the point where it is now
possible to offer data on audience attention during ad breaks.
This can be based on who is watching the ads VS. who is
watching the programs.
The 2008 television season will be the first to conduct
business using commercial rating. Television 2.0 may be on
its way.

23. Key Citations
“NBC Finalizes Deal to Keep ‘Friends’ for Final
Season: Cast Will Get Raise”- Joe Flint, Wall Street
Journal online February 28, 2002
In 2002, Warner Bros. made last 22 episodes of the
series and received $6 million in license fees from
NBC, which covers about 80% of production costs
Warner Bros. owns the show. NBC just aired it.
Warner Bros. gets all the income from International
sales (Hungary)& syndication in the U.S.

24. Key Citations
“Friends’ Deal Will Pay Each of Its 6 Stars $22
Million”-Bill Carter, The New York Times, February
12, 2002
Considered the biggest deal ever for a 30 min. TV
program, when NBC and Warner Bros. made deal to
bring back 6-person cast
Paid $1 million each per episode
That year Friends scored biggest ratings in 5 years.
President of NBC Entertainment, Jeff Zucker, said
“This is a great day”

25. YouTube Videohttp://www.youtube.com/watch?v=vQtveTUZrS8