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Netflix step into reality TV a good fit

Most popular TV genres in the US 2015

Netflix announced two new reality TV shows to add to its ever-expanding genre coverage. This will give Netflix a revenue boost and help it to reduce costs. .

Netflix dives into reality

This week Netflix announced it will add two new reality TV shows to its expanding stable of originals. The first show is called Beastmaster, and pits a multinational field of 108 competitors against each other on a tortuous assault-style course called “The Beast.” The show, which is produced by Sylvester Stallone and David Broome, is being groomed for Netflix’ global audience. It will have multiple pairs of hosts, providing commentary in their own language. In the US, for example, English commentary will be provided by Brooklyn Nine-Nine actor Terry Crews and Charissa Thompson from Fox Sports.

Ted Sarandos, Netflix’ Head of Content, said the company would take a different approach to traditional competition-based reality TV. He said the show is:

Ted Sarandos Netflix“…results oriented but something people will want to watch a year from now. It’s more about the heart of the competitors and less about the ‘here’s who won, it’s over.’”

Mr. Sarandos must be pleased with how the production of the first series is going, because it has already been renewed for a second season.

The second reality show Netflix is producing is a revival of the aughts hit Queer Eye for the Straight Guy. It will be produced by the original Bravo show producer, David Collins. However, the Fab-5 hosts will be all new.

A dose of reality makes sense

Of the top five genres of content people watch, Netflix has original content in four of them. According to GfK, the most watched genre in primetime is sitcoms and comedy, with 48% of people watching them. Netflix has plenty of shows here, including classic styled sitcoms like One Day at a Time and new approaches like Gracie and Frankie. Movies, 43%, are also well represented with Beasts of No Nation and The Ridiculous 6 just two examples. 42% of people say they watch Drama’s during primetime, and Netflix hangs its hat in this category with many quality originals available. Similarly, action and adventure, with 32% watching, is well covered with shows like Sens8 and The OA.

Reality TV is watched by a third of viewers during primetime, yet Netflix has, until now shied away from the category.

Why reality now?

In the US, Netflix has entered a new phase in its life. The company is no longer experiencing explosive growth, so it is natural to turn the attention to subscriber retention. Broadening the content genres available gives a subscriber less reason to return to their pay TV subscription. This means they will watch longer, and value the service more. Reality TV helps this goal in two ways.

SVOD services suffer from consumers joining, bingeing, and then dropping the service. Paywizard found that a third of new SVOD customers joined with the intention of cancelling within 6 months. A broader content selection should help keep new subscribers longer.

The second way reality shows help is in reducing the total cost of content. Simply put, reality is cheap to produce. Particularly when compared to shows like The Crown, which cost $120M to produce. As Beastmaster producer David Broome commented:

“We definitely didn’t break the bank by any stretch.”

Which TV genre is next for Netflix? Certainly, not the 7th and 8th most popular, news and sport. So far Netflix has shown no interest in stepping into live video delivery.

Why it matters

Netflix move into reality TV makes a lot of sense, particularly in the US market where growth has slowed.

Broadening the type of shows available in the service should help keep customers paying for their subscription longer.

Reality TV is cheap to produce, and helps the company get more watchable hours from the money it spends on originals.

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