3:19pm PT by Philiana Ng
CNBC Gets Into Crowd-Funding Business With 'Crowd Rules'
Crowd-funding takes center stage on CNBC's new reality competition series Crowd Rules.
The New York-based series is the latest unscripted effort, debuting at 9 p.m. May 14, for the financial news network under the "CNBC Prime" umbrella. In each episode, three small businesses compete in front of an audience of 100 who vote to decide who wins the $50,000 grand prize. Jewelry designer Kendra Scott and NY1 anchor Pat Kiernan, along with an expert, provide advice and help the studio audience -- made up of MBA students, consumers and business owners -- vote on which company takes home the money.
"This idea is an intersection of two things that were going on in the last year. ... I was trying to figure a way how I could bring crowd-funding to a business reality show on television," executive producer Michael Davies told reporters Monday at NBCUniversal summer press day. "And secondly in researching another project, I stumbled across facts to do with small businesses in America: 54 percent of all GDP is generated by small family-owned businesses. Since the 1970s, they've been responsible for 66 percent of all employment."
Marrying those two factors seemed like potential for a new show that didn't exist. "There were TV shows with big businesses, there were TV shows that focused on commercial or people with new ideas for products or businesses," he said. "There were no TV shows for [the existing individually-owned businesses]."
While episodes won't specifically feature companies with similar areas, like three ice-cream businesses for instance, Davies noted that there are themes for each hour. For example, one installment features "legacy" companies, which are in the middle of transitioning into new hands.
Crowd Rules panelists emphasized the differences of their CNBC offering from that of ABC's Shark Tank, which focuses on the entrepreneur and whose bickering "sharks" are often the entertainment. Depending on who you believe, panelists Kiernan and Scott "agree 80 percent of the time" or "75 percent."
"All three businesses have existing businesses that work that we have reason to believe that they would thrive," Kiernan said. "We're not picking the worst so that we know what the outcome would be."
Why the $50,000 prize? Davies revealed that at one point the amount was actually "much larger." What he found, however, was that $50,000 was already enough for businesses to utilize for marketing or to put in elsewhere. (Companies have about 30 seconds in a final ditch effort to persuade panelists and the audience, who either vote with their head or their heart, what they're going to do with the money.)
Jim Ackerman, senior vp primetime alternative programming at CNBC, noted that the $50,000 prizes will not be given to the winners until after the episodes air, but Ackerman assured that they would receive the money.
Unlike Shark Tank, which relies on the "sharks" to put in money into ideas they believe they can groom into successful products to be consumed by the public, Scott and Kiernan don't put in equity, and company owners don't feel like they're signing away their life.
"It's the right time in the economic cycle because we're not in the depths of a recession," Kiernan said. "This is the time when the economy is on the upswing, and I think the program is in the right side of that track."