Blake Mycoskie and his sister appeared on The Amazing Race last year and lost, but their brush with reality TV led to a new venture for the out-of-home media entrepreneur.
Mycoskie raised $1 million from his Amazing Race rivals and other reality TV "stars" he met during the experience and enlisted Larry Namer, a 20-year cable veteran who co-founded Movietime, the predecessor to E! Entertainment TV. The result, to be announced today, is Reality Central, a cable network dedicated to TV vérité.
The digital net aims to launch in first quarter 2004 with 3 million homes on board, but it has no carriage yet. Namer, president and CEO of the network, said Reality Central has $20 million to fund it through launch and one year of operation.
Taking a page from the E! playbook, Reality Central will mix original shows—news, interviews and behind-the-scenes stories about the genre—with broadcasts of reality shows from England, Australia and other nations, and reruns of domestic shows. "There are thousands of hours of reality programs from the past 15 years that have aired in the U.S., as well as Australia and Japan," said Mycoskie, who serves as chairman of the network.
The startup is counting on reality's ability to deliver the prized 18-34 demographic. But it also faces some lingering reluctance among advertisers to buy the often risqué programs [Adweek, February 3], signs that the reality craze may have peaked and a tough environment in which to launch a cable venture.
Countered Namer, "I've been in the cable industry all my life, and I had my sanity checked with friends running all the big MSOs. I made sure they saw the value in this the way I did." Most recently Namer co-founded Comspan Communications, which does strategic planning and consulting for cable and new media.
"Pockets of viewers in the younger demos are big consumers of the genre, and if they can find it, they'll watch it," said Joe Uva, Worldwide CEO of Omnicom's OMD. "But I think reality TV is a fad. People will tire of some of these things."
But some see reality as just a starting point for the network. "The reality TV craze one day will die, but this channel can be a young person's channel, like MTV, just without the music," said Jean Pool, evp/director of North American operations for Interpublic Group's Universal McCann, whose Coke client is a major sponsor of American Idol. "If the idea is strong enough, it will work. For an advertiser, it's quite cheap to get involved in. And they're a flexible bunch—you can work with them on almost any kind of crazy idea you want."
Reality programming flooded the airwaves in 2002—according to Nielsen, more than 40 percent of Americans watched at least one reality show on network television last summer. While several shows that debuted in the first quarter failed to catch on—I'm a Celebrity—Get Me Out of Here and Married by America, among them—Joe Millionaire made a splash, and the success this month of Fox's Mr. Personality and ABC's Extreme Makeover indicates there's life left in the genre. The networks are still counting on reality, with plans to release at least six new shows in the fall.
"If you look at Survivor or some of the other shows that have been around for the past two seasons, you're still talking about ratings in the high 5s or low 6s, and shows like American Idol are in the double digits," said Lyle Schwartz, svp and director of media research at WPP Group's Mediaedge:cia.
Regardless of the concept's viability, open slots in the cable marketplace are difficult to find. "It's very hard for new cable networks to get clearances," said one buyer.
Several cable operators declined to comment on the network. One system sales executive was intrigued by the concept: "We don't like to handicap networks before we really get a look at them, but reality is strong and Larry has a good name, so I'm sure a lot of people are going to listen to what he has to say."
Schwartz cautioned that the initial goal of 3 million homes—3 percent of the population—won't make much of a media dent. "With those penetration levels, it's not going to garner large national ratings," he said. "Even if they were going to get a 10 rating from 3 percent of the population in their coverage area, that would be less than two-tenths of a rating point."
In terms of advertisers, one media buyer noted that reality TV's often salacious content tends to scare marketers. "With something like Fear Factor, for example, it's hard to sell snacks if you're watching someone eat a cockroach."
The network is getting marketing help from Reality Central board member Walter Carey, a co-founder of Messner Vetere Berger Carey and COO of the Tuesday Team, which crafted Ronald Reagan's presidential campaigns.
Reality Central has signed promotional contracts with about 30 former reality TV stars, including Survivor winner Richard Hatch, and plans a national mall tour for later this year. Online and viral marketing are also in the mix.
"We're capitalizing on the No. 1 form of TV to come around in the last 20 years in terms of pop culture," said Namer. "When you start a cable network like Oxygen, you need to spend a lot of money to explain what Oxygen is. Networks are already spending millions of dollars to build brands. We don't have to tell anybody what Survivor is."