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Supply and demand – the economics of unscripted TV

21 October 2016
Supply and demand – the economics of unscripted TV

After the muted response to the latest series of Top Gear, it was clear something wasn’t quite right under the bonnet of the cherished motoring show. It had failed its reboot MOT. The show’s host, Chris Evans, quietly took one for the team: no fracas ensued, just the subdued sound of the seasoned broadcaster taking a deep breath before driving off into the sunset in a reasonably priced car.

Fast forward just a few weeks to July 17, when Amazon Prime’s juggernaut rival is set to carve up the dust in Johannesburg, as Messrs. May, Hammond and Clarkson roar into town to record the inaugural episode of The Grand Tour. Assuming Clarkson and co are suitably catered for – a reported £4 million per episode budget should pretty much cover the steak orders – you won’t be able to avoid the noise as the team accelerates towards the series’ autumn launch.

The Grand Tour could be an expensive gamble for Amazon, but the arrival of this high-profile unscripted entertainment show, with a distinctly international flavour, heralds a fascinating pivot for SVoDs.

In a relatively short period of time, the likes of Netflix and Amazon Prime developed their content offering substantially; from shifting physical copies of rental DVDs through the post to early streaming services. But, little over three years ago, could any of us have predicted they would become such serious players in high quality scripted originals, worldwide?

Investing in original drama has proven to be a successful strategy for the streamers in driving subscriber growth. We’ve all become box-set bingers, diving into series that hook us and letting those shows play out around our schedule, not that of the EPG.

With shows such as The Grand Tour and Netflix’s recently announced Ultimate Beastmaster, SVoDs are making tentative steps into the world of unscripted entertainment: until now the sole domain of the traditional TV networks. Cue worried rumblings from the broadcast world alongside hopeful cries that ‘it’ll never work.’

Let’s be clear on the ambitions. Amazon et al harbour no intentions of wrestling Got Talent away from broadcasters: that breaks the model. As with scripted originals, shows that can be made once and distributed to an entire global subscriber base are the goal here.

The £4 million budget per episode lavished on The Grand Tour is at least six times more than is allocated to Top Gear, but that vast budget is being spent on a show that is truly international in both content and distribution. Touring the production of the show to major international cities makes it ‘local enough’ for home viewers to relate to. Come September, fire up Amazon Prime in any corner of the world and you’ll be greeted by the enthusiastic automative trio gurning back at you from their digital shelf.

Similarly Netflix’s Ultimate Beastmaster, an athletic reality show helmed by ageing action hero Sly Stallone, will have global audience reach baked into it. It’s essentially one worldwide competition, in which teams from six territories will go head-to-head for the chance to be crowned – you guessed it – the Ultimate Beastmaster. The mother show will be lightly localised with hosts from each home country. Think Jeux Sans Frontieres pumped up on protein shakes and you’re not far wrong.

Netflix has also been experimenting with the late night talk show format, not least with the very notion that a late night chat show fundamentally isn’t one if it’s available to watch at whatever time of the night (or day, for that matter) the viewer wants to. But we’re not here to ponder existential crises. Freed from the constraints of time-specific topicality, Chelsea sees self-congratulatory host Chelsea Handler swear her way through more ‘universal’ themes such as education with the aid of international guests, including Chris Martin and Gwen Stefani.

But there’s a catch.

When we think of great unscripted entertainment, we tend to think of those shows happening live, or as close to live as possible. Consumed in the moment, with all of the pace and excitement that event TV brings, these are shows unlikely to reignite our long-forgotten love affair with long tail economics. One week on from release, would audiences be bothered if they’ve missed an episode, or compelled to catch up?

That said, would there be anything stopping Netflix or Amazon, or any of their contemporaries, one day flicking the big red switch called ‘Live Stream’ in the future? It’s not beyond the realms of possibility. In December 2015 Netflix CEO Ted Sarandos said the platform would live stream sport if they had enough skin in the game. And whilst putting out a show ‘live’ internationally might be a no go, the idea of an SVOD scheduling ‘event TV’ to be consumed near live could present some exciting opportunities.

So how will we know if this speculative push into the world of unscripted has been a success for the streamers, given how guarded the platforms are on audience numbers? We certainly don’t expect Amazon to reveal how many people have watched The Grand Tour, but surely the most telling marker will be what happens next: if audience and subscriber data demonstrates there’s an appetite you can be sure more commissions will follow.

By Phil Birchenall, projects director at K7 Media

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