How common is it? Mike Fleiss, executive producer of The Bachelor/ette, claims that 70-80% of reality show content is fake in some way. (He exempts his own show, of course, despite all claims from within and without to the contrary.) The list can keep going on.
Usually, the moment comes and goes with a lot of fanfare, but not all that much immediate damage. Longer-term damage can result as people slowly drift to other shows that have not yet had their equivalent ugly moment, or in a few rare cases, are thought to be unlikely to ever have one (Deadliest Catch being a good example of the latter). We keep being surprised every time it happens. It recently happened again with Storage Wars, as bidder Dave Hester, in the midst of a long downward spiral in bidding success, accused the show of planting items in lockers. He was fired from the show soon after, though producers denied it was because of the accusation.
The same issue pops up all over the world, but in Japan, it's common enough that a word has long been around for it: yarase. In the linked piece, a Japan Times article from 2003, it actually is broken down even further, including a second word, shikomi:
Another producer, Mr. B, corroborates Mr. A’s assertions, but doesn’t apologize for them, stating that “many viewers don’t really understand yarase.” He distinguishes between yarase, preparation (shikomi) and direction. When he shoots videos of teenage girls soliciting sex, he likes to have his subjects weep on camera. According to Mr. B, yarase would be “telling the girl to cry.” If you give her onions to draw tears, that’s “preparation.” And if you tell her to imagine what her “dead grandmother in heaven would think” of her selling her body, that’s “direction.”Or in American terms, seeding a Storage Wars locker would be yarase, wheeling in alcohol for Bachelor/ette contestants would be shikomi, and asking leading questions in any confessional anywhere would be direction. It should be noted that this particular quote has another level to it: yarase, and its companions, was employed in a much more insidious context: as part of a news report. This is part of how it got common enough to get a vocabulary for it. No less than National Geographic has been accused of yarase, in their case by Jake Adelstein concerning a documentary on the yakuza.
Oddly, in some cases yarase ends up slightly beneficial to some programs. Japanese game shows are notorious for being further over the top than anywhere else.
For example, take this clip from a show called All-Star Athletic Games in which contestants attempt to avoid getting flung off turntables. The idea here is that, if they fall off, they get flung into a pool of hot water and they have to immediately run off into a kiddie pool filled with snow to cool back down.
This kind of thing is pretty extreme and even the Japanese know it. They also know that if you want to get on TV, you're going to have to mug a bit for the cameras, as Todd Newton explored in 2009 when competing on the show Urakage for Travel Channel one-episode-wonder Are You Game? (Something I remember watching, but for which the Internet appears to have purged all video that I was going to use.) The more extreme elements will get written off as yarase in order to make viewing it a little more bearable.
Not that it always is. The most extreme example of Japanese television might be the ordeal of a man who went by the stage name Nasubi, who was locked in an empty apartment in 1998 for as long as it took to win one million yen (roughly $10,000) worth of magazine contests. He was given absolutely nothing beyond the materials needed to fill out the postcards. Anything else, he had to win, and that included food (which it took him two weeks to win; the producers are thought to have helped him out a bit until he won his first bag of rice), and toilet paper (which it took him ten months to win), and clothing (which he never won at all, unless you count the single pair of women's lingerie that didn't fit). It took him over a year of total isolation- punctuated by a shift in apartment when reporters were about to track down the one he was in, during which they forgot to bring his rice along- to reach the goal... after which he was sent to South Korea to win enough to pay for his flight home. And then enough for business class. And then enough for first class. And then he was sent into another empty box... which promptly fell away as soon as he stripped naked to reveal a live TV audience, the first real human contact he'd had in 15 months.
There wasn't any yarase. In fact, in order to prove it, the producers set up a live feed of the apartment so people could see for themselves. The only real fakery going on was some editing done for the show to make Nasubi seem happier than he really was. In reality, Nasubi contemplated escape several times, especially since he wasn't promised much of a prize: the stuff from the magazine contests and maybe some extra publicity. (The real prize: they made a soup commercial from footage of the producers handing him a bowl of ramen at the end of the Japanese segment of the task, they published the journal he'd been keeping, they sold ad space on the show website, and that all made Nasubi some hefty royalties. If Wikipedia's to be believed, he currently is a drama actor in his native Fukushima.)
Are reality shows faked? Quite often. Are the cast members willing participants? Again, quite often; as far back as the first season of Survivor, Kelly Wiglesworth stated, on-camera, "We're not bad people, we just play bad people on TV." Do we watch anyway? Usually.
But, in a sense, it may be worth asking what would you rather have in the end: the knowledge that some of the insanity and drama you see is staged and that people aren't really like that and would not really be so cruel, or the knowledge that it's not, they are, and they would?