When industry watchers first heard about Fox's (NWS) plan to create a TV channel that showed nothing but reality shows 24 hours a day, some were, not surprisingly, skeptical. "In pure economic terms it was kind of strange because there had been no or very little established market in reruns," recalls David Lyle, president of Fox Reality Channel. "In fact, we created that market." Lyle says the new venture was turning a profit within six months of its launch in 2005. But now that hundreds of reality shows exist, how does Fox Reality pick the winners? And how can fledgling TV producers turn their own ideas into syndication dollars? In a recent conversation with BusinessWeek's Rebecca Reisner, Lyle shared his insights. Edited excerpts of their discussion follow.
How did Fox decide to launch the new channel?
The Fox Cable Group studied for some time whether there was sufficient material to run a 24-hour channel with some original reality shows and some reruns. We were, I think, surprised that people hadn't realized fully the worth of reruns of reality TV shows.
What formula do you use to keep the mix of shows invigorating?
We divide them into three categories. There are shows we repurpose not long after their first runs—maybe six months afterward. That's what we do with Hell's Kitchen and American Idol. Then there are shows we run a couple of seasons behind the new ones—as we are with major networks shows like Biggest Loser. Finally there are shows like Blind Date and Extreme Date that come from cable or syndication and are very workman-like in their productions. They run day after day and are cost-efficient for us because they're cheaper to license.
Why bother creating original reality shows when there are so many existing series?
You have to remember that we as cable channels have two sources of revenue: subscriber affiliates and ad sales. Advertisers and affiliates want to see original content because they believe it will rate better. An advantage of creating your own original series is that you can run the repeats as often as you like.
Can you name a few of your most profitable shows?
Don't Forget the Lyrics, Hell's Kitchen, Biggest Loser, Beauty and the Geek, Hole in the Wall, My Big Fat Obnoxious Finance, Meet Mr. Mom, and Temptation Island.
How about the least popular?
You never remember the failures. Outback Jack was O.K. for awhile and then just stopped repeating well.
What advice would you give to writers and producers hoping to create reality shows that will make them rich?
Look for a format that you can license in multiple territories. There's American Idol, Australian Idol, Canadian Idol, and so on. And attempt to hold onto the secondary rights to these shows, even if you have to contribute some of your own money to do that.
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