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Should Networks Benefit from the Business Success of Their Reality Television Stars?
April 7, 2013
It was just a matter of time. In the last decade we saw the music industry’s move to the take-it-or-leave-it “360 deals” that allowed the record labels to share in their artists’ income earned in non-music activities such as acting, modeling, merchandising, book publishing, etc. The 360 deal model was instituted by the recording industry to replace sharply declining revenues. The justification for the 360 deal was that since the record labels used their immense resources to transform their artists into megastars capable of earning significant income outside of their recording careers, the labels themselves should share in those ancillary income streams.
Now television networks are beginning to follow suit, at least when it comes to reality television. According to the Hollywood Reporter, many cable networks are seeking to take as much as ten percent (10%) of their reality stars’ ancillary income. Those networks are no longer willing to miss out on a piece of the action from deals such as Beam Global’s multi-million dollar acquisition of the Skinny Girl cocktail line from Bethenny Frankel of Real Housewives of New York. Count the Kardashians, Nicole “Snooki” Polizzi, and Mike “The Situation” Sorrentino among others who have cashed in own their reality show fame.
So now the question becomes, “should networks and show executives share in the ancillary income streams of reality show stars?” If doing so becomes the new norm for reality TV stars, is it a foregone conclusion that the networks will attempt to extend that profit participation model to scripted show stars?