The style of television that most Americans over the age of 20 grew up watching may still be hanging on, with popular shows like This Is Us, Supernatural, and Modern Family doing extremely well for their respective networks. In the last decade, however, there has definitely been a power shift. Scripted shows, with continuous stories and character development that require teams of writers and set designers, have been pushed to the backseat. Now riding shotgun is shows about families with multiple babies, racially-stereotyped pastry chefs, and bug eaters.

The Price of Talent

Reality TV shows have practically dominated network and cable TV in recent years because the payoff is in the high revenue return and simple production value. In 2010, E! Online reported that a 30-minute reality show costs approximately $100,000 to $500,000 per episode. While that is not cheap, it is far less than many scripted shows, where budgets can rival major movie releases.

Key Takeaways

  • Reality TV is dominated because of the high revenue return potential and simple production value.
  • While the costs of paying some reality stars has increased exponentially, the costs of producing reality TV is still a lot less than creating most scripted programs.
  • Product placements are easier to digest in reality TV and serve as an important source of revenue.
  • By filling the calendar year with new episodes, reality TV helps networks and cable channels can capitalize on ad revenues over longer time spans.

There are different factors to consider when comparing the production costs of reality TV shows and scripted ones. Naturally, reality TV shows require fewer writers, which helps lower the cost. At the same time, salaries for popular reality stars have shot up exponentially. For example, actress and reality TV star Denise Richards is reportedly making $1 million per season on Bravo TV's The Real Housewives of Beverly Hills.

Smaller Networks and Channels

This cost advantage of reality TV spills over into the smaller and emerging networks, many of which wouldn't exist without lower-cost programming options. There are even two channels dedicated solely to reality TV: Fox Reality in the U.S. and Zone Reality in the U.K. Not mentioning MTV, which had a massive resurgence in the 2000s thanks to the format. Bravo, Spike TV, and TLC are all channels that owe much (if not all) of their current successes to real housewives, polygamists, and realtors hungry for a slice of fame.

The Perfect Placement

Product placement is much easier to digest in reality television. This practice, which generates advertising revenue for both the show and the network by strategically adding brand name products within the context of the program, hasn't been as prosperous for scripted TV shows.

One of the reigning kings of reality TV ratings, American Idol, has dedicated entire skits during its show to Ford Motor Company, AT&T Mobility, and Apple iTunes. Survivor contestants have been rewarded with Snickers chocolate bars and Doritos nacho chips. This in-show placement accompanies regular commercial breaks and increases the value of advertisement for sponsors.

The Bottom Line

At the end of the day, the biggest advantages reality TV shows have over scripted ones are financial, but that's no surprise. Also, the fact that reality shows are often used to deliver new content (and bring in ad money) while comedies and dramas are "off-season" is a major benefit. By filling the majority of a calendar year with "new" episodes of a show, networks and cable channels can capitalize on ad revenue for a longer time span—and there's little fear that a union strike will cease production in the meantime.