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By Ronald Grover What do you do after you've won a million dollars on CBS's Survivor? If you're Richard Hatch, the alliance-builder who nakedly (sometimes literally so) schemed his way to the big prize on the first series, you invest your money in real estate, host your own radio show, and make guest appearances on TV game shows. As for Tina Wesson, the Bible-reading nurse from Tennessee who won the second round, you invest in stocks and bonds and go on the motivational-speaking circuit.
Then there's Blake Mycoskie, who teamed with sister Paige and finished third in the 2002 version of The Amazing Race. Mycoskie's team lost the 31-day round-the-world race -- and its $1 million prize -- by four minutes when they couldn't find a cab in the streets of San Francisco. The 26-year-old entrepreneur has already started and sold two businesses. Now, he has a new brainstorm: a reality-show channel funded by all those bucks that one-time contestants won.
"SIGNIFICANT" INVESTMENT. On Apr. 28, Mycoskie and his partner, E! Entertainment TV founder Larry Namer, are expected to announce the launch of Reality Central, a 24/7 channel dedicated to America's latest obsession. It doesn't have any programming yet, and no cable or satellite distributor has signed on to carry it. But Mycoskie and Namer say they've raised nearly $25 million, including reality-TV winnings from the likes of Wesson, Survivor 3 winner Ethan Zohn, and Alex Boyan and Chris Luca, who beat Mycoskie and his sister out of the The Amazing Race's top prize two years back.
Hatch declined to comment on whether he had invested, although he says he intends to do promotional appearances on behalf of the channel -- 1 of 24 past winners who Mycoskie and Namer say they've lined up to do likewise.
What's the allure for former contestants? "I'm looking for ways to stay involved with reality TV, and I didn't want to go in front of the cameras or be an actress," says Wesson, who gave the duo "a significant amount of money."
GOSSIP AND DOCUMENTARIES. Certainly, a reality-TV channel is no sure thing in today's media environment, where startup cable channels rise and fall in record times. Yet the upside could be significant if Reality Central catches on with viewers and advertisers. "If I didn't have the extra money, I might not have taken the chance," says Wesson, "but I have a feeling that this baby may make it."
Hatch says he may do guest gigs on several new programs planned by the network. They include a 40-minute show modeled after Access Hollywood that looks at the latest news and gossip about reality shows and a documentary-style show that does up-close-and-personal pieces on contestants. For Hatch, who has an agent and in May will introduce acts for the Wango Tango rock concert in Pasadena, Calif., it's just one more gig after leaving the island. "I was up for the Weakest Link host job," he jokes, "but I wasn't pretty enough."
Mycoskie and Namer say they've put together a production team, with original programming accounting for about half their lineup. The other half will feature reruns, including those from abroad such as shows from the Netherlands and Britain, where reality TV began. But while they say they've received a warm reception from the major networks and cable and satellite operators, none has signed up so far.
HUGE POTENTIAL. The duo has high hopes with cable operators. Some are especially eager to add channels to their digital-cable offerings (since more channels allow operators to raise rates). Namer plans to have access to 3 million homes when the channel launches in early 2004, ramping up to about 30 million under contract within a year. He adds, however, that no deals are close enough to announce.
Namer says Reality Central is modeled after E! Entertainment, which he started in the mid-'80s before selling it to several cable operators. And while the market can be a little hit-and-miss, boffo viewership ratings for shows like The Bachelor, Fear Factor, and American Idol show that the audience can be huge. Moreover, reality shows tend to lure the 18- to 34-year-old viewers advertisers want, says Walter Carey Jr., a long-time ad exec who signed onto Reality Central's board and has been talking with advertisers for the channel -- again, none has yet signed on.
What will hook the advertisers? A deal with cable operators would do it, says Jean Poole, executive vice-president of ad agency Universal McCann and a member of Reality Central's board of advisers. And even if the reality-TV phenomenon eventually fades, she says, the format has already made a significant imprint with younger viewers, who have come to expect it on the tube. Then again, the channel might eventually morph into something else, she speculates, giving advertisers an alternative to MTV's steep rates as one of the few outlets that appeals to the 18- to 34-year-old age group.
Launching a new channel is never easy. But Reality Central has cleared the first hurdle with the resourcefulness viewers have come to expect: It has tapped a source of venture capital in reality-show winners who have hot money in their pockets. Grover is Los Angeles bureau chief for BusinessWeek. Follow his weekly Power Lunch column, only on BusinessWeek Online