Core Media Group, owner of Fox reality series “American Idol,” has filed bankruptcy, just days after the 15-year-long reality TV show closed up shop.
True, Core Media had another Fox show, “So You Think You Can Dance,” but that summer series didn’t pull in the big advertising or license fee bucks that “Idol” did. Core Media filed for Chapter 11 bankruptcy due to an decrease in revenue -- lower network license fees, as well as losing big show sponsors Coca-Cola and AT&T, which left at the end of its run.
So now Core owes some $400 million to a number of parties. It has only $73 million in assets and just a tiny $10 million cash on hand.
Look at Mark Burnett Productions to see a better strategy: Have a wide-ranging number of shows -- around a dozen reality programs -- for broadcast, for cable and other places, including “The Voice,” “Survivor” and “Celebrity Apprentice.”
And, of course, they all need to work. All have given Burnett the ability to expand -- just a bit -- into scripted TV, such as his “Bible” series.
Chiefly, reality-TV shows always had some hedges to scripted TV shows -- lower production costs and the ability to make deals directly with marketers -- like Coke, Ford, and AT&T did with “American Idol” -- companies thatregularly had in-show branded segments and other extensions.
For producers, getting marketers money into their pockets is having secure upside.
Mind you, TV networks aren’t dumb.
Once a TV show gets a decent audience and looks to have a future, TV networks renegotiate deals with producers to include marketers in-show fees -- which, according to TV networks, helps align efforts with marketers’ traditional TV commercial media schedule.
That’s why some reality TV show can extend their runs -- sometimes at lower ratings levels. There is money coming in from marketers in-show branded entertainment efforts.
This isn’t a hard-and-fast rule. Factor in perhaps different license fee levels that can also make or break a show.
Reality TV shows are great for business -- producers and TV networks. But for reality TV producers, one would seem to need a broad scale of programs to be in it for the long run.