What's the 'game' in reality?

By Sangeeta Tanwar , afaqs!, New Delhi | In Media Publishing | October 07, 2010
Top celebrity hosts on reality shows charge between Rs 1.5-3 crore for each episode, burning deep holes in the broadcasters' pockets. Is there a way to recover this money? afaqs! finds out

It seems to have become an unwritten rule of the game. A big celebrity host is a prerequisite to launch a reality show in India. Celebrity participants, though important, are not mandatory; but the bigger the host, the better. However, all this is burning deep holes in the broadcasters' pockets.

Today, big-ticket celebrities charge between Rs 1.5-3 crore per episode to host a reality show, depending on their popularity and status in the film industry. Salman Khan, the host of reality show, Bigg Boss, is estimated to charge around Rs 3 crore per episode.

What's more, the production cost of each episode of a reality show ranges between Rs 50 lakh and Rs 1.5 crore; while the channels spend Rs 10-20 crore to promote a big-ticket show.

Thus, a channel ends up investing Rs 80-170 crore on a reality show, which comes to an investment of Rs 1.3-2.8 crore per episode. In comparison, the cost of a fiction show is between Rs 10-14 lakh per episode of 30 minutes, including the marketing costs.

Currently, four reality shows, that are either on-air or are waiting in the wings, together have about Rs 400 crore riding on them. These are: Bigg Boss hosted by Salman Khan; Fear Factor Khatron Ke Khiladi hosted by Priyanka Chopra; Kaun Banega Crorepati with Amitabh Bachchan and Master Chef with Akshay Kumar.

Does high investment also mean high returns? Not always. In fact, channels consider themselves lucky, if they are able to recover the cost or get a few crores above the cost from reality shows.

For instance, about Rs 130 crore was invested in Fear Factor Khatron Ke Khiladi; but as per industry estimates, it may bring in only Rs 100 crore in returns. Similarly, about Rs 140 crore is riding on Bigg Boss with returns expected to be Rs 100 crore. Kaun Banega Crorepati, with an investment of Rs 150 crore, is expecting a return of Rs 80-100 crore.

Given that the investment-returns balance is shaky at best, what's in the game for the broadcasters?

Rohit Gupta, president, network sales, licensing and telephony, MSM, says, "GECs roll out these big- ticket shows especially during the festivals, when brands are very active and are ready to pay a premium. The idea is to grab a bigger share of the ad pie."

Rakesh Singh, AV-P, ZenithOptimedia, Delhi draws similarities between these reality shows and the Bollywood blockbusters that ride on star value. "Most brands look to reality shows to get impact and mileage for their campaign, which the fiction shows lack," he says.

Unlike fiction shows, reality shows look for title and associate sponsors. The title sponsorship comes for Rs 10-15 crore; while the associate sponsorship costs Rs 3-6 crore; and about six to eight associate sponsors are accommodated in a reality show. The 10-second ad-spot rates for a reality show are also slightly higher than the fiction shows, and fetch between Rs 1.5-4 lakh.

Thus, reality shows earn between Rs 30-70 crore from sponsorships, besides another Rs 20 crore from other ads. However, often this amount is not enough to cover the investment on the show.

Amin Lakhani, head, exchange, Mindshare India points out that despite the high investment and uncertainty about returns, GECs prefer to have one or two big ticket shows for multiple reasons.

He says, "A reality show acts as a clutter-breaking property for viewers; it provides increased visibility and a chance to reach out to a larger TV-viewing audience. It presents greater chances of the channel being sampled by the not-so-loyal viewers, and provides greater opportunity of brand integration and product placement."

Though the star quotient is important as it attracts viewers instantly; ultimately, it is engaging content that keeps viewers glued to these shows. After all, blockbuster movies featuring the biggest stars are also known to bomb at the box office.

Search Tags