How does TV channel earn money ?
Posted: Sat, 10 May 2014, 7:59 pmwhen you watch a channel like AXM the movies channel...its all full of movies, how does this channel earn money ?? Thank you.
TV Channels have multiple revenue stream:
Ad revenue: A major chunk of money earned by TV channels comes from selling advertisement spots. The ad spot rates are directly proportional to the GRPs and TRPs (as detailed in earlier answers). In effect higher GRPs (higher eyeballs) higher ad revenue.
Sponsorship: This is a more recent avenue. Sponsorship include program/event sponsor, wardrobe sponsors, location sponsors. digital sponsor and what not. This help brands grab some more eyeballs.
Subscription: When an end user subscribes for a particualar channel either on cable or DTH or IPTV then the operator typically pays a subscription fee to the channel. This might not be applicable for free to air or smaller channel breaking into the market. Note that this is applicable over and above the carriage fee paid by channel to operators.
Content royalty fee: TV channels generally own the content format of the shows produced by them. So if other channels would also like to produce the shows in the same format then they would pay a royalty fee. For example lets say XYZ channel in US launched program 1 and ABC in Philippines was now produce program 2 in the same format as 1 then ABC would pay a royalty fee to XYZ provided XYZ owns the content format.