Reality TV and Economics

Samm Snyder

Mr. Reuter

Economics

29 April 2014

Keeping up with the Kardashians, Chrisley knows best, 16 and pregnant, Jersey Shore, all of these shows have something in common—that they are reality tv shows. There is so much controversy over reality TV, that it is inappropriate or should I say ‘stupid’, but the truth of the matter is, whether society likes these shows or not, they help out our economy greatly. The shows that are all about watching someone live their life with their white Range Rover and millions of dollars mansion, are what help us out. The show about irresponsible teenagers being teen moms or 16 and pregnant, help out the economy too. As much as people can complain about how the richer are getting richer with their reality TV shows, we can’t say much seeing it is helping us even a tiny bit in our fluctuating economy.

Reality TV makes an unbelievable amount of money which can range anywhere from “between $200k and $2m per one-hour episode, depending on the format” (Quora). To any normal person this seems crazy, but to anyone in Hollywood and Beverly Hills it seems absolutely normal. An article from technorati.com said that “Television programming executives have many choices of what shows to “buy” and run-and in the end their decisions must be based upon the ability of the shows to draw lots of viewers form the right demographic so that pricey advertising can be sold during the snow. In addition the cost of buying or producing the show must be taken into account”. This shows us, that they really do take into consideration whether the show will make money or not and “the different between the expected revenue generated by the show and the show costs to produce determines its viability-whether it ever airs or not” (Good). From what Good stated in his article, it is clear to see that producers, screenwriters and everyone that partakes in a show have to think about the outcomes. They have to think about if the cost of producing this show will be less than the benefit—in other words, the marginal benefit has to be higher than the marginal cost in order to allow them to air the shows.

When we think of reality TV shows, we think of the MTV and E! shows likes Jersey Shore and Real World, but not only are they about having money and getting in cat fights, but it there are plenty of other shows that are considered “Reality TV’, like The Biggest Loser and Shark Tank for example. When shows like this come out, they don’t just benefit our society because of the money that the shows are making but they have positive externalities to them. Biggest loser—this causes people to feel motivated and get a gym membership and buy fresh fruit; Shark Tank—shows us entrepreneurs trying to make success in our economics. Sure, there are negative externalities to how much some of these shows make, like the fact that they may have some percentage of helping the inflation rise if we are paying people and the shows that much but that far outweighs how it helps the economy. Overall, no matter how much people can say that ‘reality shows are stupid’, they really help our economy even though in some areas, they may not be helping our society or young viewers.