If you want to know how TV shows make money, this is the perfect article to read.

It reveals a lot about TV shows and how they really make money, including some insider secrets that many people don’t know about money making potentials of TV shows.


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TV Shows and Entertainment Is Big Business

Lights, camera, action…and oh yeah, money!

Next time you nestle into your sofa with that bowl of popcorn on your lap to watch your favorite TV show consider the cost of how much money it takes to produce that favorite TV show.


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For a one-hour episode of your favorite television program, the production budget, all in, can range anywhere from $5,000,000-$7,000,000 an hour to produce that show.

Perhaps, that is why there seem to be so many commercials interrupting our entertainment.

 

Personal Story

I know I’m showing my age here, but my favorite television show when growing up as a kid was Superman with George Reeves.

I enjoyed the opening introduction to each of the episodes when the man of steel was faster than a speeding bullet, more powerful than a locomotive, and able to leap tall buildings in a single bound.

I idolized Superman.

Then came that fateful day when my mother let me in on a little secret on how they filmed or gave the appearance that Superman was flying.

I was devastated and unfortunately, my superhero was not so super anymore.

I’m sure one less viewer did not impact the revenue-generating bottom-line for the Superman series.

 

15 Best Ways TV Shows Make Money

 

1. Ads

One of the biggest ways that a television show can make money is through advertisement.

This advertisement is promoted during the programming at certain intervals and particular moments within the showing of the episode.

Advertisers hope that the television viewer will watch those ads and purchase their products.

Most likely, the prime example of the cost of advertisement is during one of the most-watched sports programs throughout the year.

Consequently, to buy a spot during the Super Bowl can cost an advertiser, for 30 seconds, $5.6 million.

 

2. Subscription

If a network has produced a show and other entertainment venues wish to buy the rights to that show so that they can utilize it on their channel, they will pay the TV show for that right to do so.

Therefore, a TV show can receive a percentage of the ad revenue or the subscription plans that some of these streaming services provide for their customers.

Check out the following articles for more on watching TV shows, movies, videos, etc:

 

3. Investors 

Investors are part of the revenue-generating stream for TV shows.

This is due to the fact that some producers of various shows will present or “pitch” their idea for a television show to one or more investors.

In that pitch, they include the finances involved, but also try to help the investors visualize the cast that is involved and what is the plot of the TV show.

If the possible show resonates with the investor, there may be a subsequent investment made.

However, the investor does not realize any return on their investment through commercials.

They do receive a return on their investment through royalties that may be generated through the production of the show.

With additional monies through the investor, the show’s production and use of features may be enhanced because of the additional investment monies.

This in turn will create a more engaging show which in turn may help with the ratings.

Of course, all of this adds up to additional monies being realized.

 

4. Bidding

As part of the way that TV shows can generate more revenue, they allow for a bidding process to take place amongst the various networks.

If enough interest has been produced and generated through promotions and the potential of viewers is high, the TV shows will utilize this as leverage.

Because it’s all about money, and a possibility of a hit show looms, then the major networks made a bid for the rights of airing that show on their network.

Consequently, the TV show will earn additional revenue.

 

5. Merchandise

When a TV show is particularly successful and popular, TV shows can capitalize on the success by manufacturing merchandise.

This merchandise is sold to its fan base and to others as the viewers proudly utilize or wear this merchandise reflecting the popularity of the TV show.

A television network that produced the program and the subsequent sales of any associated merchandise can be negotiated with the producers of this program with the manufacturing company of the merchandise.

This is a process to determine royalties received on the merchandise sold.

It is not uncommon for the rate of return on this merchandise to the TV show to range anywhere from 2 to 20% of sales.

 

6. Subscriptions

TV shows that are not viewed on television but are streamed provide revenue for these streaming services.

One such streaming service is Netflix.

The way these streaming services generate revenue is by charging their viewers a subscription fee.

Additionally, in turn, the TV networks charged the subscription service or streaming service a fee for the privilege or for the business action of utilizing those programs that were produced for television viewing.

 

how do TV Shows make money

 

7. Crowdfunding

A fairly new way for a TV show to create money off of programming is through Crowdfunding.

Crowdfunding as the name implies is an opportunity for a large group of people to donate money in order to sponsor a show.

Generally, the types of TV shows that look to Crowdfunding as a source of revenue are classified as independent TV shows.

Often, these independent TV shows don’t have the typical backing of large networks, retail advertisers, or TV show executives.

Typical sites that would use Crowdfunding include Kickstarter, Rockethub, and Indiegogo.

 

8. DVD Sales

Television shows can make additional revenue by selling the programs that have been produced and make them available to customers through DVDs.

Often, these DVDs are packaged by the television shows in increments of the entire season.


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Therefore, the customers can buy this package of DVDs that contain the entire episodes of, for example, West Wing.

They then can “binge-watch” this successful TV series on a weekend and enjoy reviewing and rewinding certain parts that are particularly entertaining for them, etc.

Recent statistics reveal that DVD sales rose by 14.4% and this was an increase over the same time period in the previous year which saw an increase of 12.5% over the prior year.

 

9. Sponsorships

Producers of TV shows in order to get their program on the air will reach out to various companies and corporations for individual sponsorships.

Also, the reverse can be true as sometimes companies will contact the producer.

The difference in a sponsorship versus an advertiser is that the sponsor doesn’t particularly want any recognition in supporting the show other than receiving some sort of recognition for their investment dollars.

A subtle way of doing this is that during the show, say if the sponsorship is Coca-Cola, somewhere in the script, a person is drinking a Coke or happens to mention the product Coca-Cola.

This is not classified as a direct ad with that action being a portion of time within the program devoted to promoting the product through an ad.

This is a more subtle way for the product and company to be identified through the course of the program.

Also See: How Do Radio Stations Make Money?

 

10. Syndication

When a television show first airs and through its subsequent successful series, it will gain more and more popularity.

However, like anything else, all good things must come to an end.

However, in the TV world sometimes there is no end to television production. Often shows live on through syndication.

This means that old episodes of a particular program continue to be played on a variety of stations.

Those stations reap the rewards of that successful syndicated television program and subsequently obtain additional sponsors for the show.

In addition, when those programs are syndicated by a network, they in turn also receive a percentage of those monies.

As an example, the extremely popular sitcom known as Friends still continues to reap rewards for the cast and the show’s creators.

They have reaped additional millions of dollars.

Also See: How Do Churches Make Money?

 

11. Streaming

Another added way that television shows can be brought to the viewer is through streaming.

In days gone by, individuals would set their VCR or DVR to record these programs.

Today, however, the reruns of one’s favorite shows can be streamed through a variety of technological devices.

One prime example is the comedy series, Seinfeld. A recent business deal was enacted in which the streaming service $130,000,000 and $180,000,000 for 180 episodes.

Also See: How Does Grammarly Make Money?

 

12. Network

What may make for a good television series is the way that a television show is produced.

The process begins with an idea for a television program. The producer who wants to bring this TV show to life will pitch the TV show to a particular network.

The pitch contains the show’s plot, the actors involved, and who is indicated possible support. Also, a budget for the show’s production is estimated.

If in the determination of the network that the TV show has potential, the network gives the go-ahead and provides a budget for the producer to create the program.

The network supports the production of the show.

Check out the following articles for more on watching TV shows, movies, videos, etc:

 

13. Commercials

When the show gives the go-head, commercials that are purchased or airtime is then given to the network.

Advertisements comprise one-third or 20 minutes of the 60-minute program.

The standard rule of thumb is that ads will generate, for the company, one dollar for each viewer.

Therefore, if any television show attracts 15,000,000 views your viewers, the company that advertises on this program can anticipate $15,000,000

 

14. Exclusivity

The way that a TV show can increase its revenue is by providing exclusive rights to a particular company which allows them to be the sole or premier supporter of the television program.

A classic example of this is the Super Bowl with, in this case, Pepsi being the premier sponsor of the Super Bowl.

This is seen during the halftime show as the entertainment is presented as “Pepsi Presents.”

 

15. TV Ratings

An important revenue-generating aspect of TV is the associated ratings determined by viewership.

One of the major players in gathering media research is Nielsen. This organization has been collecting data about individual TV viewers and their television watching habits.

Nielsen has been doing this since 1950.

Utilizing a random sampling, the TV viewing habits of those households are tracked.

This is important because the higher the rating is for a viewed television program corresponds to the higher amount those advertisers will have to pay in order to promote their product during that television show.

Therefore, TV ratings are a critical component of how much TV shows and generate in regards to revenue

 

TV Shows Making Money FAQs

 

What Makes More Money? Movies or TV Shows?

Wealth, of course, is dependent upon how successful either the movie or the TV show is.

One prime example would be one of the more successful movies of all time was Star Wars II (The Force Awakens).

Ticket sales for this movie were over $2,000,000,000 and net revenue of $780,000,000 was made.

On the other hand, the Game of Thrones netted HBO a profit of $1.6 billion for the entire 8 seasons.

 

How Much Money Would a TV Show Earn for One Episode?

Depending upon the number of viewers and taking the standard equation of 1 viewer equals $1 in Ad generation, then a TV show that had 1,000,000 viewers would generate $1,000,000.

If it took one-half of $1,000,000 to create one episode, then the net profit would be $500,000.

 

Conclusion

Television used to be known as the “small screen” and movies were the “big-screen” entertainment venue.

Although it may be true in regards to viewing movies and shows physically, television, nowadays, is anything but a small screen business.

Even despite the objects that are used in the entertainment world, and portraying.

Television is a huge business in the entertainment world.

As it relates to money, television is faster than a speeding bullet and more powerful than a locomotive, and able to leap budgets in a single bound.


Again, this company has paid $25+ million to members:

SurveyJunkie (only USA, Canada, Australia residents allowed). You can earn money sharing your thoughts. They have already paid $25+ million to their 20+ million members just for sharing their thoughts and opinions. Click here to join SurveyJunkie for FREE


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Apart from being a seasoned Personal Finance expert who has written for top publications around the world, I bring significant personal financial experience. Long story short... through bad financial choices... I found myself $100,000 plus in debt. I was able to dissolve this indebtedness and regain financial solvency. This financial turn around was accomplished through reading, studying and implementing a financial plan. My financial plan included paying down my debt through budgeting, being cognizant of where my financial resources were being spent, changing my attitude about money and understanding the binding chains of the improper use of credit. Today, and for 10 years, I have been debt free and have invested wisely to enjoy my current retirement. This is allowing me to write to help others make, save and grow money wisely!