Have you ever wondered how do TV shows make money? Do they earn solely from ad revenue? Well, ads are one way that TV shows make money but it is more complex than that. The truth is TV shows can generate money from various sources and this is exactly what we will talk about today.
How do TV shows make money?
1. Broadcasters and Advertising
TV shows receive the budget from a particular network. The producer of that TV show gives details about the show, actors playing in the show, plot of the show, and budget of the show to a network that could potentially agree to pay the budget of the show.
The network in return receives all the rights to air the show and get all the income generated from ad revenue. The network should recognize or at least tries to recognize the potential of the show and how many viewers this particular show gets.
The ads will not be enough if the view counts do not exceed or match the expectation.
2. Subscription Services
Subscription services like Netflix generate income from subscriptions rather than ads. The monthly subscription fee they get is the funding for providing budget to TV shows.
So the producer pitches the TV show to Netflix and if Netflix is convinced then the producer gets the budget. Sometimes Netflix themselves go to promising TV shows and pitch them to stream their shows on Netflix. In this way, more subscribers will get attracted to Netflix since they have original series and TV shows which are not available anywhere else.
Investors also provide a budget to producers if they think that the TV show has potential and can gain lots of viewership. This is similar to what producers do to broadcasters.
The investors can help them with the budget to make the TV show and in return, they get proper credit and some royalties that the TV show generates.
TV shows can get the budget from crowdfunding. There are some TV shows which rely on donations from the public and those donations are used to make the TV show.
There are platforms like Kickstarter and IndieGoGo where producers receive crowdfunding. They will only get crowdfunding if the producer discloses the plot, actors, crew members, and budget of the show. Small investors can also benefit from a platform like Kickstarter by investing early.
Merchandise is a great way to generate more money by a TV show. This process becomes a lot easier if hundreds of thousands of people loved the show.
There is no doubt that fans of a particular TV show would want merchandise of that show. They want to be in those elite groups of people where they have special merchandise for their favorite TV show.
TV shows are largely dependent on the budget which can come from broadcasters, investors, and crowdfunding. A TV show can get canceled or stop broadcasting midway if the show is not earning enough or is not attracting the expected amount of viewers.