TV Shows Business Model
The other day, House of Cards was filming at a church right around the corner from where we live in Baltimore. Quite a site, with trailers all over the parking lot, food trucks, generators, limos, hundreds of people from the actors to all the support staff.
There were tens of thousands of dollars being spent on this and it was just one scene from one show. How do they afford this?
You, The Viewer / Consumer
It is all thanks to you. Between the cable channel fees you pay (no wonder they are high) and the advertisers who want to sell to you, that adds up to be able to pay for everything. It would never work if they were putting on a play with a small audience, or even a big audience for a play. That is nothing in comparison to the millions of people who watch the television shows.
Advertisers
How are companies going to sell their products? They can send you direct mail, put up billboards, or do newspaper, magazine, radio or television ads. And, more recently, online ads. The appeal of television are the large audiences. With television and a number of these others, you can also target your audience. For instance, you probably wouldn’t put an ad for tampons into a dirt bike magazine. You would put an ad for dirt bikes or related products.
Advertisers will pay a lot because of the size of the market and the ability to target the viewer based on surveys that allow the producer of the show and the advertisers to know the demographics of the viewers.
TV Game Shows
Shows like Wheel of Fortune must be an advertiser’s dream. Not only do you have the ads during the commercials, but the whole show is pretty much a commercial. Each night there is a car that the contestants can win that is plugged on the show. Then there is the trip to someplace that is also plugged. Don’t think the show pays for those. Those are paid for by the car company, or the cruise line or travel company. It can be more effective than an ad because people get up to go to the bathroom during ads or go to the kitchen to get a snack. With the in show placement, they know you are going to watch, and it comes off psychologically different than an ad. The trusted hosts are pushing the product.
Between the money from the car companies, the travel companies, the advertisers, there is more than enough money to pay the contestants. Plus you only have to pay the 1 or 2 hosts and the crew that films and a set that tends to stay the same on most shows. It is cheaper to make than a TV drama. I always did wonder though about Do You Want to be a Millionaire. It always seemed that they gave away more money than other shows I was familiar with.