Television: Television Funding

Definition of Television Funding

Television funding refers to the financial means through which a television production is financed. This can include a range of sources such as advertising revenue, licence fees, subscriptions, government grants, product placement or sales from merchandising.

Methods of Television Funding

Advertising revenue is one of the most common methods of TV funding. Advertisers pay to have their products or services showcased during commercial breaks, with rates that vary depending on the show’s timeslot and projected viewership.
Licence fees are another source of funding, particularly for public broadcasters like the BBC. These fees are paid by TV owners and used to finance and produce content.
Subscription fees are common for pay-TV and online streaming services like Sky, Netflix or Amazon Prime Video. Viewers pay a monthly or yearly fee to access the service’s programming.
Product placements involve incorporating a brand or product directly into a show’s storyline or episodes. Brands pay for this exposure, providing revenue to TV producers.
Merchandising and syndication involve selling related products or broadcasting rights to other channels or platforms, bringing in additional revenue.

The Role of Public Service Broadcasters

Public Service Broadcasters (PSBs), such as the BBC in the UK, have a mission to serve the public interest. They are typically funded through licence fees and provide a range of content to appeal to, and represent, all sections of society.
PSBs often produce content that commercial broadcasters might find too risky due to the potential lack of commercial success, for instance educational or minority interest programming.

Impact of Streaming and Online Viewing

The rise of streaming services like Netflix and Amazon Prime Video have significantly reshaped TV production and funding. These services, funded through subscription fees, now produce their own ‘original’ content, increasing competition for traditional broadcasters.
More people are consuming television online, leading to a potential decline in traditional advertising revenue and pushing broadcasters to find alternate ways of funding content.
As the internet is global, streaming services can reach a global audience, which has made it possible for smaller scale productions to be financially viable. It has also increased the production of local content, with a worldwide audience in mind.

Remember, an understanding of television funding provides valuable perspective on the wider industry and market trends. Understanding the various sources of funding and how they impact the production and distribution of content is key to developing a comprehensive understanding of the media landscape.