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I only started watching The Real World when they aired the first Vegas season, we didn't have MTV in Canada before that, I watched RW regularly from Vegas until the Sydney season. Might be true they changed the type of people they casted. During the Vegas and San Diego seasons it was still very much relevant, you'd see other media outlets report about the Trishelle pregnancy scare and Brad and Robin going to jail. For the seasons I watched from Vegas to Sydney, there were plenty of good cast members that went onto participate in The Challenge.A lot of people point to the first Vegas season as the turning point, but I think it kinda started a few seasons prior in Hawaii with Ruthie and her alcohol issues. They saw the "value" in selecting some of the most emotionally damaged young adults for the cast, making for some pretty volatile tv moments. Hot tubs, mostly attractive young cast with little to no career goals & free booze pretty much became the standard after that season.
IMO The RW turned to complete **** when Jersey Shore came around, because they tried to cast more Jersey Shore types hoping to create another hit with super trashy people and those types are clearly just there to be on TV and hopefully become famous, this greatly contributed to the decline of RW cast members going on to The Challenge and having any success in the competitions. With exception of Vegas 2, the newer generation of cast members don't really stand out, the past couple of seasons where the RW season isn't even named after the city are the absolute worst