Thursday, May 24, 2012

Reality TV Economics

My wife loves Reality TV.  She loves the Real Housewives (all of them), the Sister Wives, the Bachelors & Bachelorettes, and the Teen Moms.  My DVR is jam packed with more trashy television than we know what to do with.  Seriously - she can't keep up with it all.  She has to speed through episodes or delete them because the allotment fills up daily.

Anyway, while studying for classes one night, she had an episode of the Real Housewives on from Jersey which discussed the pending bankruptcy of a show member.  The immediate reaction every person has is "How did she blow all her money? She must make millions from the show!"  I believe that's probably the reaction most people have about all people on TV.  They must be making loads of money on this.  So, I decided to look into it.

The Real Housewives:  On average they make anywhere from $50k to $100k per episode per season.  Within an 11 episode season, that can be $550k to $1.1 Million.  Certainly not chump change.  Not included in this is the likely additional $50k for season wrap-up and possible premiere party.  So, the cast member are not hurting.  However, let's look into what makes this show popular:  The Lavish Lifestyle.  So, I calculated the average home price in Beverly Hills (from Zillow) sold in past 30 days to be $4,667,300 for a 4 Bed, 4 Bath home.  It's a rough estimate and likely low but gives us a baseline.  Total principal, interest, taxes, and insurance payment would $25,782 a month, or $309,384 for the year, which if the cast member was making $100k an ep would equal 28% of gross income.  Right at the standard.  Now, housing is only part of the equation as the daily catered lunch parties and shopping trips have not been calculated.  So, while the cast members certainly make a pretty penny, they are not set for life based upon the lifestyle.

Teen Moms:  On average, the Teen Moms make $60k per season.  Again, a very nice salary for doing nothing (not demeaning labor or child care).  However, these individuals are as the show title suggests, only teenagers.  They have no college education and most have no high school equivalency.  Plus, they have a baby to care for and provide for.  So, a one-time lottery winning of $60k will definitely help, but in the long-run is a blip on the radar for these girls.

Sister Wives:  This was hard to find but a found an unverified amount of $75k per adult per season.  So, with 5 adults, that equates to $375k per season.  It's noted that this family lives a relatively modest lifestyle compared to the previous examples, but feeding 16 or so kids will obviously take a toll.  I haven't seen any of the adults work, but perhaps they also earn some supplementary income to help support the family.  Again, that would be a major difference compared to first examples.

Lastly, The Jersey Shore:  This is the outlier.  In Season 2, the cast members made $10k per episode.  In a 13 episode season, that was $130k to party and have a good time.  Ironically, the Jersey members are the outliers because of how they have been able to stretch their "brand".  They have almost all signed endorsement deals, spin-offs, or appearance fees.  They used the TV show to become celebrities and then capitalize on that. 

The Shore is the main reason people get into reality TV.  The oppurtunity to become a celebrity.  However, it's this 15 minutes that keeps the person coming back and trying to keep the fame going.  For example, Kate Gosselin's 15 minutes are up.  Her kids are adorable and they've experienced things they never would have if not for TV.  However, it also ruined her marriage and got them accustomed to a lifestyle that was unsustainable.  I have no doubt she is trying to set her kids up for life, however, it's a harsh "reality" to go through.  She has to become normal like the rest of us.  Perhaps, that's the problem with reality TV.  It's no more a reality than your average sitcom.  People on TV are portraying themselves as they want others to perceive them.  Eventually, the cameras will stop and money will not come.  Too many of these contestants are not prepared for the immediate success of the show and the immediate fall from it.

It's entertainment.

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