Ever wondered how do tv shows make money ? how stations are constantly updating their ‘revenue map’, bringing in income while airing freely ? – this is how much money they make at certain times on certain days – it’s really just an annual calendar, it has to be annual to take into account seasonal variations (viewing drops in the summer) and special events (Christmas, easter etc.).
Channels takes money from advertiser company to run advertisement on channel and advertisement are different type and their time also differ to run on channel.
Mean advertisements is run in time shift 15,30,45,60,120 per mints.
The advertising having more time charges is applied accordingly.
It is considered that the time from 8:30 Pm to 10:30 Pm is prime time caused most the TV runs at this time at home in India.
Because of that advisements charges increase 3 times at this time rather than other time.
So, your solution to “How do tv shows make money are;
- Actual Viewing Figures
These are really more used for revenue creation, i.e. Program sponsorship.
Active viewing figures of a Tv show attracts sponsors, advertisers and product promoters.
The Nielsen system in the US is actually one of the least accurate and most costly viewing management figure systems in the world as it only captures a very small sample of viewing data – but it’s a well known and understood mechanism and nobody’s too keen to replace it because they all know how to manipulate it in relation to how do tv shows make money.
They then commission shows to the budget they can afford for a certain slot, so if it’s a 2am Sunday morning show the budget is smaller than say a Saturday 9pm slot.
They know they’ll get it wrong all the time, a supposed-hit will fail, a smaller show will blow-up – but over the course of a year they balance out and in the absence of a crystal-ball it’s the best system available.
In the US, UK and several other countries the broadcasting channels are bound by rules/guidance to publish viewing figures but that’s not the case for the online-only companies such as NetFlix, Amazon Prime etc.
They get to hold onto their data as they wish and in fact have VERY accurate viewing figures as their playouts are inherently log’able and reportable.
I’m the designer of a similar system to these and we get a staggering amount of data back that we can use to understand viewing patterns and this really does help with predicting future viewing figures.
- GRP – Gross Rating Point
How do tv shows make money through gross rating point ?
Let us first describe to you that there is a measurement of advertisement in TV world.
If you measure the advertisement,
you measure how effective other advert have been performing and how you can leverage that to reach your target audience.
Where different – different advertiser first checks the GRP of the channels
and accordingly TV channels gets money to run advertisement.
Now you must thinking that how is GRP checked? It’s having a simple formula.
It is not seen that at what location your TV channel is being watched
although it is seen that how many people visited to your channel and with the help of mathematical terms, GRP is calculated.
- TRP – Target Rating Point
Ever wondered how do tv shows make money through TRP ?
TRP means a TV show is being watched from which location and how many people are watching the show.
There is a team to check the TRP of any TV show which select some specific homes ,
some are from city and some are from rural areas.
This team connects these all home’s TV with specific device and prepare a list of shows which channels and TV shows are being watched more.
The more the viewers for the show depending on the preferred geographical location,
the more advertisers would want to place their ads to penetrate that location.
This is very insightful on how do TV shows make money.
- Subscription fee
Some channels are free to air mean they don’t charge for it,
but some channel having more TRP they don’t free to air their channel and they charge subscription fees
to watch the channel which takes from viewers by different DTH operators.
This is very straight forward in understanding how to shows make money.
- SPONSORS INCOME
You must have seen that some company sponsors the show and channel some ration of amount keeps itself and some ration gives to shows.
Channels make 80% money from advertisements and 20% from copyrights and subscription fees.
First of all amount of advertisement goes to channel and channel
gives the amount to shows according to TRP and rest of the amount channel keep itself as a profits.
This is significantly understandable in understanding how to shows make money.
In conclusion, TV shows contemporarily alternate between seen or unseen measures of making finance.
We could for example, give a portion of our hard-earned finance to promote the continuous airing of the program.
With this, we do hope we’ve been able to insightly give enough information to quest your thirst of how do tv make money.