Reality TV has been especially popular, but consumer interest is waning
Los Angeles, CA (PRWEB) August 27, 2012
Reality TV has grown in popularity since its inception and has reached its viewership peak. More than ever, consumers are tuning into the singers, dancers, housewives and gamers of reality TV. Funding for these TV shows dried up over the past five years, though, with total US advertising expenditure expected to fall at an annualized 0.5% over the five years to 2012, according to IBISWorld industry analyst Justin Waterman. “With less money given to broadcasting studios for ad spots, TV networks had a smaller pool of revenue to buy reality TV shows from industry operators.” As such, Reality TV Production industry revenue is expected to stay relatively flat over the five years to 2012, growing only 0.9% per year on average to total $6.0 billion.
Although revenue growth was slow, the climate that the Reality TV Production industry operates in is improving as a result of loosened credit policies, lower interest rates, rising advertising expenditure and migrations to internet and mobile platforms. Industry growth, combined with lower costs of production (props, writers and vast shooting facilities are typically not required), has boosted profit margins from 2007 to 2012. Profit has also ballooned due to an influx of actors and actresses seeking to “star” in a reality TV show: lured by potential for fame and fortune, actors and actresses are increasingly willing to work for smaller paychecks. According to Waterman, there are about 768 reality TV production companies that compete with other content creators, such as online, broadcasting, cable, satellite and in-house network production companies, for a limited talent pool of top directors, writers, producers and other creative talent to produce top reality shows. Revenue is also highly dependent on fluctuating advertising spending and audience viewership numbers which have grown more fragmented across increasing numbers of broadcast, cable, satellite and premium subscription channels. Producers constantly have to develop new content to satisfy rapidly changing consumer tastes, which keeps concentration low. Several long-running reality series that major industry players have relied on for revenue, such as American Idol and Survivor, have declined in viewership, which caused industry concentration to fall in 2010. In 2011, however, industry leaders FremantleMedia Ltd. and One Three Inc. both launched successful shows – The X Factor and The Voice, respectively – which ultimately increased industry market share concentration over the past five years.
The next five years appear to foster growth, at least in terms of revenue and establishment growth. Driven by higher TV broadcasting studio's budgets (resulting from higher ad revenue) and online and portable reality TV content, industry revenue is forecast to rise over the five years to 2017. Increasingly though, consumers are growing tired of reality TV, so IBISWorld forecasts that Americans will gradually taper off their consumption of industry products, eventually reducing ratings and correlated advertising expenditures. Toward the end of the five-year period, the price paid for a reality TV show by a network is estimated to decrease. For more information, visit IBISWorld’s Reality TV Production in the US industry report page.
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IBISWorld industry Report Key Topics
Companies in this industry produce semiscripted reality TV shows. Reality TV is a genre of TV programming that presents purportedly unscripted dramatic or humorous situations, documents actual events, and usually features ordinary people instead of professional actors. The genre of reality TV consists of various subgenres, including talent shows, game shows, special-living environment shows, hidden-camera shows, talk shows and dating shows.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.