After Binging on Dramas, Streaming Services Target Reality TV

(Bloomberg) -- When Brent Montgomery, a TV producer behind the popular reality series “Pawn Stars,” first met Ken Goldin, a colorful, trading-card mogul, he sensed an opportunity to create a new show. 

Earlier this year, after teaming up with former ESPN executive Connor Schell, Montgomery began pitching an unscripted series that would take viewers into Goldin’s weirdly compelling subculture of hawking baseball cards, signed jerseys and movie props. While making the rounds to potential buyers, his team met with CNBC, ESPN and the History Channel, the network that turned “Pawn Stars” into a long-running hit. But ultimately, despite his past success on cable TV, Montgomery decided to go a different route. He sold the show to Netflix Inc., one of several streaming services bidding for the rights.

Such is the state of competition in Hollywood in 2021. Across the industry, in an effort to hold onto fickle, restless subscribers, streaming services are jockeying over a longtime staple of cable and broadcast TV, aggressively loading up on various forms of unscripted programming, including reality TV shows.

“Unscripted content is buzzy, sticky, binge-able, cheaper and quicker to make than scripted,” said Van Toffler, the former head of MTV, who is now chief executive officer of Gunpowder & Sky, a production company. “All of the streamers are heavily underweight.”

The new trend runs counter to the early days of original streaming programming when emerging services typically looked to make a splash by focusing on lavish scripted series. CBS All Access (now Paramount+) started with “Star Trek: Discovery.” Disney+ kicked off with “The Mandalorian.” Apple TV+ offered “The Morning Show.” Such glitzy, sumptuous programming managed to generate lots of media attention but also tended to leave subscribers wanting more. 

The economics of unscripted programming make the format particularly appealing to streaming services looking to expand their menu of original offerings. An entire season of a reality show like “FBoy Island” on HBO Max costs the same as an episode or two of a top drama on the company’s flagship channel. As a result, streaming services are rapidly buying up everything from documentary series, to competition shows, to travelogues, to food programming and lifestyle shows.

Montgomery compared the current boom to what happened in the TV industry after screenwriters went on strike in 2007 and 2008. At the time, networks, desperate for fresh programming, loaded up on unscripted programming. 

“Netflix was really easy to pitch the last few years because almost anything you could take to cable you could take to Netflix,” Montgomery said. “They started to figure out what’s working for them.” 

Along the way, Netflix has emerged as the biggest buyer of unscripted TV programming in the world, according to the agents, producers and studios that sell the shows. Last year, three of the 10 most-popular shows on Netflix were unscripted: “Tiger King,” “The Last Dance” and “Too Hot to Handle.”  According to Parrot Analytics, Netflix’s original series account for more than half of the reality shows viewers want to watch online.

Netflix’s impact in the field didn’t happen overnight. During its initial foray into original programming, the company followed the the model of HBO, offering prestige dramas and quirky comedies. In 2016, Netflix hired NBC Senior Vice President Brandon Riegg with a mandate to build an unscripted programming team from scratch. 

“We were the last content team to be formed within Netflix in terms of originals,” said Riegg, Netflix’s vice president of nonfiction series and comedy specials.

Netflix’s first attempt at a competition show, “Ultimate Beastmaster,” was a failure. So was a talk show hosted by comedian Chelsea Handler. Producers and streaming executives got nervous that unscripted shows weren’t going to work online.

But Riegg soon scored a couple of hits, including “Queer Eye,” a reboot of the popular Bravo show, and “Nailed It!” a cooking series hosted by Nicole Byer. The company then ventured into dating shows with “Too Hot to Handle” and “Love Is Blind,” as well as documentary soap operas “Selling Sunset” and “Bling Empire. Over time, as it expanded internationally, Netflix began creating local-language versions of its most-popular shows, mimicking the traditional model of reality TV.

Over the past year, two of Riegg’s biggest successes have been “The Last Dance,” about basketball star Michael Jordan, and “Formula 1: Drive to Survive.” Netflix is currently working with Vox Media Inc. on a show about golf and developing more than a half-dozen car-related shows.

To keep things cranking, Netflix has started signing overall deals with nonfiction directors, including Greg Whiteley, the creator of “Cheer,” a docuseries about a collegiate cheerleading squad in Texas, and Joe Berlinger, the director of “Crime Scene,” a true crime documentary series. Such arrangements, which lock a producer into one studio or network, are more common in the realm of scripted programming. But thanks to its growing appetite, Netflix needs to have a bullpen of unscripted filmmakers, standing by at the ready. 

“As we’ve grown our slates, there are certain creatives we have a great shorthand with,” said Riegg. “Given the volume we’re trying to achieve, we can work on a ton of projects with them.”

Much as Netflix’s success with “House of Cards” convinced the streaming industry that flashy dramas were the best way to lure new subscribers, the recent track record with unscripted programming has inspired competitors to follow suit. Already, the surge in demand has lifted the entire market, boosting the price of many unscripted shows. Docuseries can cost several hundred thousand dollars an episode, and some installments of competition series like “Rhythm + Flow” cost more than $1 million.

To date, HBO Max has come the closest to matching Netflix’s pace. The streaming service from AT&T Inc.’s WarnerMedia has ordered a little of everything, including a cooking show with Selena Gomez, various documentary series like “100 Foot Wave” and multiple competition shows, ranging from ballroom dancing to flower arranging.

Meanwhile, rivals services are reshuffling their leaders to better capitalize on the trend.  Earlier this year, Walt Disney Co. announced that longtime TV exec Rob Mills would start overseeing a new unscripted programming  unit that makes shows for Hulu and ABC. Mills is in the process of revamping the company’s strategy. Already, Hulu has purchased two high-profile docuseries, one about the D’Amelios of TikTok fame and another about the Kardashians. 

To date, Discovery+ is the only major streaming service devoted primarily to unscripted programming. But its future is uncertain given the imminent merger of its parent company Discovery Inc. with WarnerMedia. Recently, in the wake of the announced deal, Discovery+ has been cutting back on high-profile projects. 

After a few expensive misses, Amazon Prime Video is now rejiggering its unscripted strategy to focus on docuseries and lifestyle programming. That means more shows like “LuLaRich,” which takes a hard look at the multilevel marketing company LuLaRoe, and fewer expensive swings like “The Pack,” a globe-trotting competition series with a canine twist, hosted by Lindsey Vonn and featuring her dog Lucy.

“We’re tripling down,” said Vernon Sanders, the head of Amazon’s TV division. “You’ll see more content rolling out from us.”

The swelling demand from streaming services is already changing how some creators of unscripted programming structure their businesses.  Producers like Montgomery — who sold 80% of his previous company Leftfield Entertainment for $360 million thanks largely to the success of “Pawn Stars” — have had to adapt their business model to the demands of streaming services. In cable and broadcast TV, producers of an unscripted show aim to create an expandable format, such as “The Voice,” new versions of which they can license out to various networks in markets around the world. 

But streaming services buy out all of the rights ahead of time. While this gives producers a guaranteed profit, it also caps their potential upside. As a result, Montgomery’s new company Wheelhouse doesn’t just produce shows. It invests in many of the companies and people featured in its shows.

“We’re creating storytelling that acts as marketing,” Montgomery said. “Why not invest in the businesses and brands we bring to market?”

©2021 Bloomberg L.P.