For people who do not work in this particular area of the entertainment industry it can be quite a mystery on how reality TV deals are made and structured.
It has only gotten harder to understand recently as there have been some changes in what networks offer, with the explosion of social media and web content that has affected the industry over the last few years.
In this blog post I am going to give you an overview on how network deals are currently being structured for Reality shows, so that you know what to expect if a network expresses interest in your project.
The Most Common Deal Structures
Fee-Per-Episode Structure
– Less Creative Control of the Product
– Executive Producer Credit not Likely
– Assured a Check (steady pay)
The first structure is the traditional fee-per-episode deal. This is very common with the larger broadcasting networks. You will receive less control and you will probably receive a lesser credit on the project, but you are going to have an assured paycheck, you will be paid per episode and you may receive additional fees for future episodes that are produced; such as “best of” episodes, reunion shows, or other special episodes that involve your reality show.
Profit-Sharing Structure
– More Creative Control of the Project (but still subject to network approvals)
– An Executive Producer Credit may be possible in later cycles (possible if season is successful but extremely rare in early seasons)
– Higher Compensation Risk (will not get paid if it’s not successful)
– Usually this type of deal is with a cable network
– Networks like sponsors and/or talent attached o the Project to reduce the risk of success
– May receive Advances on profits and/or bonuses for new series cycles
Another structure is the profit-sharing structure. This is more common with cable networks because they are more creative and less able to take big investment risks upfront. Cable networks want to see what is going to work, so they are willing to give you a little bit more control and there are more chances to receive a more prominent credit, but payments are more speculative. You basically have to make a profit before you are going to make money.
Again, Networks usually will want to see talent and sponsors attached to your program before they take this risk, and they may give you an advance on net profits but not likely a large advance.
Web-Series Structure
– Web series counts as the first series cycle
– Very low stipend paid to produce
– The focus is on social media numbers (who is the target audience?)
Lastly, the most innovated way that I am seeing deals now being structured is where the first series is on the web, so they are considered a web series, and that is the first cycle.
Networks will give you a small stipend to produce content. The Network’s goal is to use heavy social media to build and collect the show’s audience. They then examine that data to see if the show would even make on television and if it works for their demographics (i.e., target the market that the network’s preferred advertisers are after).
This structure significantly reduces the risk for the network because they can focus on the shows that do well in social media and then move them to television.
If you have this type of deal and are very savvy (or have someone on your team that is savvy) with social media and know how to grow your numbers it will really help you get that green light.
What you as the producer really need to think about in these types of deals is what happens if you are not green lighted to television.
You still should be entitled to some of that data that was collected from social media channels. After all, even if you are not successful, you have gathered data on people who are interested in your content and you should be able to take that with you to help move the project forward in another direction if this network decides not move forward with you.
So there you have it. The most common types of reality TV deal structures now are fee-per-episode, profit-sharing and web-series. As you can see each has advantages and disadvantages.
No matter which way your deal is going it is important to try to gather an audience up front that is interested in your content. If you can build an audience already on YouTube, Facebook or whatever other social media channel, that is a powerful indicator for networks that your project is a good one to place a bet on. This is especially true if that social media audience fits their target demographics!
Guest Post from: Richard B. Jefferon, Esq.
www.realitytvlawyers.com