Saturday, November 13, 2010

The Business of Game Shows



Recently, a 26-year old woman solved a Wheel of Fortune puzzle of seven words with just a single letter excluded. She won 53,000. It made me think about the entire business of Game Shows. Interestingly, there are no numbers or metrics that define the entire Game Show business - most of the information currently available points to the broader, more lucrative "60-Billion Dollar a year Gaming Industry" which includes video games, gaming systems, etc.



The business of Game Shows has a long history, dating back to the 1950's when televisions in homes crossed the "critical mass" of relevance in society. Television Game Shows have traditionally been a format where a network produces a game show which awards prizes to participants, and ultimately is created as an advertising vehicle for the network. Network Gameshows are able to give away prizes because they have advertisers willing to pay for time during the commercial breaks. The more successful game shows can charge more for their advertising time, ensuring their continued success.


As a child, I always imagined that game show contestants made a lot of money and could retire from it, but I now realize that many game shows gave away very little money, or nice prizes which weren't really "life-changing". One of the most successful game show contestants, however is a man named Ken Jennings who made most of his fortune on Jeopardy. Many of you might remember him as being the individual who had a 74-game winning streak on Jeopoardy.


Ken won approximately 2.5 million dollars during his 74-game winning streak.


Here are two charts - the first one is the longest running game shows in history, and the second is a list of the most successful Game Show Hosts in History.


The Top Game Shows and Longevity on the Air.

The Top Game Show Hosts and their Shows


Taxes on Prizes.


The game show contestant winners sometimes are faced with a dilemma as well. Since most game shows are taped in California, the tax code states that any winnings, either cash or prizes, are taxed as well. The original winner of "Survivor" - Richard Hatch - actually went to jail for not recognizing and following up on this fact.

Richard survived incredible torture to become the first winner of Survivor, and won $1 million dollars, but didn't realize he had to give around $400K of that money BACK to the government as taxes ! He unfortunately went to jail for this reason. If the snakes, alligators, and poisonous spiders don't get you, the Taxman will !


On an another note, Incidentally, my favorite Game Show is "Cash Cab!".



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