16 November 2011

Why is Britain the Global Leader in Reality TV Shows?

According to The Economist the United Kingdom dominates the reality TV industry:
Hollywood may create the world’s best TV dramas, but Britain dominates the global trade in unscripted programmes—quiz shows, singing competitions and other forms of reality television. “Britain’s Got Talent”, a format created in 2006, has mutated into 44 national versions, including “China’s Got Talent” and “Das Supertalent”. There are 22 different versions of “Wife Swap” and 32 of “Masterchef”. In the first half of this year, Britain supplied 43% of global entertainment formats—more than any other country (see chart).
Why is Britain so dominant in reality TV?

The answer, you might be surprised to learn, is government innovation policy. Again, The Economist:
Like financial services, television production took off in London as a result of government action. In the early 1990s broadcasters were told to commission at least one-quarter of their programmes from independent producers. In 2004 trade regulations ensured that most rights to television shows are retained by those who make them, not those who broadcast them. Production companies began aggressively hawking their wares overseas.
A key aspect of innovation success has actually been the ability to shield innovators from the immediacy of the market, thus creating a space for novelty, and also for failure:
Many domestic television executives do not prize commercial success. The BBC is funded almost entirely by a licence fee on television-owning households. Channel 4 is funded by advertising but is publicly owned. At such outfits, success is measured largely in terms of creativity and innovation—putting on the show that everyone talks about. In practice, that means they favour short series. British television churns out a lot of ideas.
Reality TV offers some interesting lessons for success in innovation and the conditions that help to make that success possible, both absolutely and in a competitive market context.

20 comments:

  1. A shame that so much of it is brain-numbingly stupid lowest-common denominator dumbed-down crud. Tool academy anyone? How about the lack of talent on Britain's Got Talent? Or you can watch a minor soap actor or washed up comic eating turkey testicles in an Australian jungle.

    Hardly Clarke's Civilization or Ateenborough's Life on Earth is it?

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  2. I always thought it was because reality tv was cheap and it was all that us Brits could afford - our famous 'make do and mend' approach to innovation.

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  3. -2- Josh,

    Yes, the cost issue is what I've heard about here in the US. The networks love the shows because they can attract lots of viewers at a pittance compared to "regular" shows.

    Even "government innovation" cannot revoke the market. Given the funding source for the BBC, there is a pretty hard ceiling on the available funds. So why make something expensive when you have no chance of recouping the extra cost? Or, for each expensive program, make up for it with many cut-rate reality shows.

    Still no free lunches.

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  4. Reality TV an innovation? Maybe in mind-numbing.I guess it serves it purpose if it keeps people off the streets, rioting etc.

    http://www.youtube.com/watch?v=Naf_WiEb9Qs

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  5. Canada regulates its media market to favor domestic production. I don't recall Canadian television series dominating the world market.

    There's rather a big difference between the remarkably good BBC4 radio dramas one one hand, and 'reality' contests and talent shows on the other. The talent show format certainly isn't any kind of innovation. Major Bowes Amateur Hour was one of the leading American radio shows during the 1930s. The British just waited for wide lapels to become fashionable again, and pulled the old suit out of the closet. The true 'reality show' was an innovation. Put people in a house and edit a soap opera out of it. That's one innovative idea.

    On the other hand, the best American television - like The Wire - comes from cable, which is produced WITHOUT the government regulations that the networks suffer under.

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  6. Roger -

    "A key aspect of innovation success has actually been the ability to shield innovators from the immediacy of the market, thus creating a space for novelty, and also for failure:"

    Clearly you are mistaken. Innovation is exclusively the result of free market competition.

    The only thing that you get from government action is the deaths of millions.

    Please don't get confused.

    And whatever you do - don't let the hundreds of millions of losses yearly due to corporate fraud, or the life-changing innovations we use daily that are directly attributable to government funding, or the death and harm caused by free marketeers that sell toxic products or destroy our environment to obtain substances that pollutes our air, etc., ever, ever, lead you to be confused about the simple equation that government = evil.

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  7. Humph. Always wondered why the Post Office and Fannie Mae were so "innovative".

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  8. It is wonderfully ironic that the land of Orwell dominates global, race to the bottom, content free, prole TV.

    The government intervention that lead to a high unemployment, low wage, financial services dominated post industrial economy was the destruction of British manufacturing by Washington puppet Margaret Thatcher. Very similar indeed to the policies of her political soul mate and fellow Washington puppet General Pinochet of Chile.

    All thanks to the innovation of University of Chicago Friedmanite, supply side economics.

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  9. -8-eric144

    Careful ... British innovation also led to the industrial revolution. ;-)

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  10. The BBC's Green Corruption Scandal Deepens ...
    http://www.thegwpf.org/the-climate-record/4355-the-bbcs-green-corruption-scandal-deepens.html

    New Format or old one ?

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  11. Not sure what the point of this blog post is, it seems to be drawing the conclusion that Government legislation freeing up the market is an example of Government intervention in markets being good!?

    "shield innovators from the immediacy of the market"

    The BBC used to make all its programs in-house and owned many large studios which they had to sell off.

    The government effectively made the market freer, something that governments are good at, they create a legal framework to support trade in a commodities and services.

    So now there are more independent companies who work for both the independent and public funded BBC ensuring a common base to draw from for both sectors.

    This blog post seems to hinge on what is said in this quoted section, which makes no coherent sense at all:

    "Alex Mahon, president of Shine Group, points to another reason for British creativity. Many domestic television executives do not prize commercial success. The BBC is funded almost entirely by a licence fee on television-owning households. Channel 4 is funded by advertising but is publicly owned. At such outfits, success is measured largely in terms of creativity and innovation—putting on the show that everyone talks about. In practice, that means they favour short series. British television churns out a lot of ideas."

    "At such outfits, success is measured largely in terms of creativity" that has been the case for the last 50 years or so and has nothing to do with the more recent 1990's Government legislation.

    From what I have read of the history of the US media there is a very high turnover of tv shows being piloted and cut when ratings fall. The only difference in the UK is that with the BBC it had the opportunity to recommision shows and allow them to build up a following. Nothing to do with a high turnover. Whereas the the reality show glut is a classic example of market led economies of scale.

    We have cheap popular TV like we have cheap electronics you don't have to buy it, and there is always some pricier programming or subscription on offer if you desire to pay extra, like on HBO in the US which makes its own quality programs in a commercial framework.

    There really is nothing innovative about recent UK legislation.

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  12. "Channel 4 is funded by advertising but is publicly owned. At such outfits, success is measured largely in terms of creativity and innovation—putting on the show that everyone talks about. In practice, that means they favour short series. British television churns out a lot of ideas."

    So the channel that is funded by advertising is the one churning out ideas, and that equates to government sheltering innovation from market forces??

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  13. Wow, I am surprised there aren't more angry comments than already are posted.

    That laissez faire capitalism, i.e. the 'free market', does not in fact necessarily promote innovation is well documented throughout history.

    A prominent example is Andrew Carnegie and J.P. Morgan.

    Carnegie introduced so many innovations into steel making that he drove many of his competitors into bankruptcy. This made J.P. Morgan angry, because said competitors could no longer pay off the loans they owed to Morgan banks.

    Repeated attempts by Morgan to persuade Carnegie to slow down innovation were rebuffed, and so J.P. Morgan bought out Carnegie - later merging Carnegie steel with several of said bankrupt competitors to form U.S. Steel.

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  14. Roger

    "Careful ... British innovation also led to the industrial revolution. ;-)"


    It's all good !!

    Nothwistanding its mainly American roots, we also lead the world by a long way in writing great music. Certainly post 1960s.

    Can you imagine an American version of the Beatles, the Rolling Stones, the Who, Bowie, Van Morrison, Joy Division, Oasis, The Verve, U2, Simple Minds, Happy Mondays, Thomas Dolby, Bill Nelson, the entire dance music revolution of the '90s ? I could go on.

    The Velvet Underground were good. Dylan was huge. Where did the new Dylan go ?

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  15. ============
    Can you imagine an American version of the Beatles, the Rolling Stones
    ===============

    Since both the Beatles and the Rolling Stones were heavily influenced by and covered American blues and R&B artists, I think it would be quite easy to imagine that. Can anyone imagine critcizing the US for not being able to play rock and roll, the blues, r&B, jazz, swing ...

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  16. You ask your question with the implication that reality shows are good thing........

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  17. Roger - you can't really describe it as government innovation policy? Government anti-trust or competition policy, yes.

    The regulatory change was certainly beneficial, but is closer to anti-trust policy than anything. The BBC and a newly consolidated ITV (which was many regional franchises) constituted a very restrictive market controlled by two buyers who were under no incentive to innovate - classic competition theory - even with Sky out there.

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  18. -17-Roddy

    Indeed, I agree ... but, given the practical effects, perhaps we should consider such regulations as a component of innovation policy.

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  19. That's my point, that's what competition law is. We already do consider competition law/regulation as a component of innovation policy. If a situation exists that is anti-competitive - crudely either a) restricts output, b) raises prices, or c) is likely to restrict innovation - then competition authorities on local or regional basis can intervene.

    This might be on the basis of explicit complaints from potential competitors who, if allowed entry, might be deemed to be positive for innovation - Microsoft bundling - or simply breaking up a monopoly or regulating against it - Sky?

    I've been at the sharp end of it for decades trying to assess competition authorities' likely response to mergers, which included the ITV consolidations as it happens. And the effect on innovation is a major consideration. While a merger is explicitly considered, the authorities often intervene without a merger being the trigger.

    The good old Herfindahl–Hirschman Index.

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  20. dljvjbsl

    I wouldn't quibble with the argument that Americans play all those genres better than anyone else. Also, the roots of almost all post 1950s music can be traced to Black America.

    However, British/Irish musicians have added an dimension of individual genius that (imo) Americans have rarely achieved for reasons I don't even understand.

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