You’re furious when your beloved TV show is canceled by a network. You might be wondering why the show was canceled. The reason for this is frequently related to the amount of profit the show was making. In comparison to how movies make money, TV shows make money differently. Here are different ways how doTV shows make money.
Television, without a doubt, altered the way we consume media. People used to go to the movies to view their favorite shows before the invention of television. When the TV was turned on, however, everyone could watch their favorite shows from the comfort of their couches. The way we consume media on television has changed dramatically throughout the years.
The issue with these systems was that they benefited consumers while harming providers. Because it allowed viewers to avoid ads, the revenue stream was impacted negatively. Later, another device, the Dish Network’s Hopper, was introduced to the market. This product stood out since it fully removed ads from the video stream.
All of this seems like a dream come true for a viewer or content consumer. However, for content makers and broadcasters, it became a catastrophe. Commercials are broadcasters’ only source of revenue, allowing them to continue offering their services. So, today we’re going to discuss how do TV shows make money.
How Do TV Shows Make Money?
There are a variety of ways on how do TV shows make money. Advertisements displayed during serial telecasts are their primary source of revenue. Membership fees, funders, merchandise, DVD sales, and a variety of other sources all contribute to the revenue of television series.
Source: Pexels
Advertisements And Broadcasters
Sponsorship is one of the most important sources of revenue for television shows. Typically, TV program makers profit from proposing a show to a specific network. Every plotline of the show and the budget for the show are usually included in the pitch. The TV network then assesses the plot and actress if the show has the potential to attract a large audience. If a television network believes the show will be popular, it will buy the rights to broadcast it.
The producer is then given the funds to produce the program, and filming proceeds. Through ads, the TV station or the investor earns their funds back. If a TV show lasts an hour, ads take up one-third of that time or 20 minutes.
Streaming Services
Streaming services have now become a significant source of revenue for television series. Ads aren’t used by every entertainment network to make money. Streaming services and cable providers, for example, use various ways. A subscription model is used by streaming services like Netflix, and it is their primary source of revenue. Netflix has a set monthly subscription fee for its streaming service.
These monthly payments account for 80% of their earnings. The money is then used by Netflix to generate original programs and films to attract additional users. As a result, TV shows leverage the Netflix platform to generate revenue by pitching Netflix. HBO and Starz, for example, similarly make money. In addition to your regular TV package, you’ll have to pay some extra costs to watch HBO and Starz.
Investors
There are a plethora of TV shows investors offered. As a result, when creators want to make TV shows, they seek media moguls for money. The pitch to investors is similar to selling to a television network; the production sells the investor on show concept. The producer discusses the budget, plot, cast, crew, and other crucial aspects with the investor. They persuade them to invest in the production.
When investors put money into a show, they will not be repaid by ads like on television. The investor may be given credit for the TV show. Also to a portion of the royalties generated by the program through the network.
Fundraising
It is a new technique for television shows to make money these days. Producers/TV shows receive money from a big number of people who donate little amounts of money. This approach of obtaining a budget is highly prevalent among independent television productions. The following are some of the most popular crowdfunding sites for TV shows:
- Kickstarter
- Indiegogo
- Rockethub
- Ulule
On these operating systems, the producer usually publishes the plot of their TV show. The details about the actors who have agreed to the program are also shared by the producers. To entice investors, several producers share concept art, storyboards, and even snippets of the script. Another benefit of crowdfunding is that it generates interest in the show among the general public. It’s like getting free advertising.
Merchandise
It is also a novel way for TV shows to generate revenue. However, it has generated a large amount of profit for popular films, TV shows, and other media over years. TV shows, like brands, are now making money from merchandise sales. T-shirts, for example, are a great way for TV shows to generate income. T-shirts are less expensive to produce, and fans enjoy wearing apparel that represents their passion for a type of show.
Collector’s items are popular among fans, so producers capitalize on the demand. Specific TV show props, character statues, and other novelties are expensive and limited editions. It contributes significantly to the financial success of television shows.
Advertisements and Subscription Fees
Several TV networks pay for TV shows with a combination of advertisements and subscription fees. Hulu is a primary example of this form of network. Hulu used to have a free and premium version without ads, but Hulu now charges monthly fees. Along with the subscription charges, users are subjected to short advertisements during their TV shows.
When compared to traditional TV networks, the duration of these advertisements is brief. Typically, Tv stations have 20 minutes of commercials for an hour-long show, whereas Hulu has only 10 minutes. The revenue is then used by Hulu to generate its TV shows. Eventually, the TV shows are funded by a portion of Hulu’s budget via premium services.
Bidding Among Networks
If producers can pique people’s interest in it, more people will talk about how much they want to watch it. This can attract TV channels and allow the show’s producers to approach several different TV networks with the show. As a result, each TV network will compete for the rights to air the show. It is a very effective way to generate a lot of revenue for TV shows. As a result, a larger bidding war could earn the TV show a lot of money.
Sales of DVDs
While it may appear to be a dated concept, DVDs are gradually declining in popularity. However, they are a great way for TV shows to generate revenue. Before the advent of streaming services, DVDs were one of the primary ways for TV shows to earn money.
People and fans purchased DVDs of their favorite shows to watch at home. DVDs allow viewers to enjoy their favorite TV shows over and over again, which boosted DVD sales. Even though the number is very small, some TV show fans continue to purchase DVDs of their favorite shows.
Sponsor deals
Several TV show producers look for corporate sponsorships, and it is a good source of revenue for TV shows. If such a TV show can generate more buzz, numerous firms will approach the producer instead to offer sponsorship. Sponsorship is similar to an investment, except that sponsorships are only available around the world of the show.
If Coca-Cola sponsors a TV show, the writers are required to insert a line endorsing their product. Alternatively, you may see Coca-Cola advertisements during the commercial breaks. Since many firms operate with one another, a TV show can typically take on a little funding.
Syndication
Most of you may be unfamiliar with television show syndication and how producers profit from it. A deal between a producer or studio and a television network is known as syndication. The network will pay a fee to the producer in exchange for the right to air episodes on regular basis.
The TV show generates profit as long as viewers watch it with advertising, according to this type of arrangement. It’s similar to royalties for TV series because they’ll continue to make money even if fresh episodes aren’t produced.
Conclusion
Lastly, TV shows earn money in a variety of ways, but advertisements are their primary source of revenue. The more buzz a TV show can build among viewers, the more money can make from advertisements and other sources. Syndication, on the other hand, is the most effective strategy for TV programs to create long-term revenue. So there you have it: some of the most popular ways your favorite TV shows make money.
