Have you ever wondered how your favorite TV channels actually make money?
As it turns out, there’s a lot more to it than just delivering top-notch programming.
From advertising to subscriptions to licensing fees, TV channels have a variety of revenue streams that help them stay afloat in a fiercely competitive industry.
So settle in, grab some popcorn, and let’s dive into the fascinating world of how TV channels make money.
Trust me, you won’t want to change the channel on this one!!
How Do TV Channels Earn Money?
Lets explore the different ways in which TV channels earn money, from advertising revenue to subscription fees and more.
Advertising:
While watching any TV show, news or any other thing, several advertisements run in between of all kinds (some on repeat). Right ?
For displaying this advertisement in between the shows, advertisers pay some amount of charge to the TV channels. Every TV channel charges differently when it comes to displaying ads at various times.
This is because each channel has its own unique terms and conditions, which can influence the price they charge to advertisers.
For example, some channels may charge more for ads that run during prime time, when more people are likely to be watching. Other channels may offer discounts for longer ad spots or for multiple ads purchased at once.
Additionally, the specific audience demographic that a channel caters to can also impact the cost of advertising, as channels with a larger and more engaged audience may charge more for ads.
The major source of income for the TV channels is received from the advertisers on displaying their ads.
💡
The revenue of TV channels in India primarily comes from advertising, which contributes around 70-80% of their total revenue.
However, the rate of the ads also depends upon the proportion of TRP as it evaluates the number of people watching the channel.
When the TRP of any channel is high, its rate of advertisements also increases. Curious about what TRPs are? Let’s find out!
TRPs:
TRP is elaborated as Television Rating Point. In this, TV shows and channels are evaluated by their numbers of views per second.
This also determines the popularity and love for the show or channel among the audience.
The higher the TRP, the higher profit TV channels earn.
Now, it comes to how they earn through this? Well, their popularity is alternatively specified by the number of advertisements shown during the show. So basically, TV channels in India do not earn direct revenue through TRPs (Television Rating Points), but TRPs are an important metric for determining the popularity and success of their programs.
As ads are the core for media houses and publications. The amount of money generated through this is distributed among the producers and TV channels in an agreeable proportion.
The highest TRP channels, Colors, Zee TV, Star Plus, Zee News, India TV, Sony, ABP news, and others, have the highest rate of advertisements.
Starting cost for advertising on these TV channels can be Rs 200 per 10 sec and can goes up to a few lakhs for a 10-sec ad.
DTH Cable Operators :
This is one of the very intriguing ways for TV channels to make money. We all have used or heard about the set-up-box connections.
In this, we would have to subscribe to some channels so that we watch them.
When we do so, a little amount of the total charge is given to the TV channels. This generates a good amount of money for the TV channels.
💡
According to industry estimates, TV channels in India earn approximately 25-30% of their revenue from DTH operators
Interestingly, people subscribe to high TRP channels only, the other low TRP channels are just working towards increasing their views. They usually do not charge money as they come free.
Subscription fees:
Some TV channels are only available to viewers who pay a subscription fee, such as cable channels or premium channels like HBO or Showtime.
The fee is usually paid on a monthly basis and can range from a few dollars to over $100 depending on the channel.
Content licensing:
TV channels can also generate revenue by licensing their content to other networks, streaming services, or international broadcasters.
For example, a TV show produced by a network can be licensed to another network in a different country or to a streaming service like Netflix.
Product Placement
TV channels can make money by incorporating product placements into their programs.
This involves featuring a product or brand in a show or movie, often through a subtle or natural integration that feels like part of the storyline.
Event Coverage
TV channels can also generate revenue by covering live events such as sports, concerts, or awards shows.
These events can attract large audiences, which can translate into higher advertising rates or sponsorship deals.
Top Ad Jingles of all time – A powerful marketing tool
Do you remember your last ads jingle? Many people tend to remember ad jingle more than the ad. So, lets look at the Top Ad Jingles of all time.
How Much Do TV Channels Earn?
- As per industry estimates, the Indian TV advertising market was valued at approximately 35,000 crore INR (~$4.7 billion) in 2021.
- The television revenue is expected to grow at a CAGR of 4-5% and reach Rs 826 billion by 2024, according to EY FICCI M&E 2022 report.
- The report says, the ad revenue of TV is expected to become Rs 394 billion in 2024.
- Revenue from subscriptions for TV channels is expected to reach Rs 415 billion in 2023.
What happened to Doordarshan | How it Lost 90% of Its market to Private channles
Doordarshan was one of the most famous tv channels and the only option to the Indian audience in the 90s but how did lose 90% of its audience?
In Conclusion,
With an enormous fan base, TV channels are growing more promptly.
The television industry is a highly lucrative and competitive business that generates revenue from multiple streams as they receive great advertising deals.
From advertising to subscription fees, TV channels use various strategies to monetize their content and keep viewers engaged.
While the landscape of TV channels continues to evolve with the rise of digital media and streaming services, the fundamental principles of generating revenue through high-quality content and effective advertising remain constant.
FAQs
How do free TV channels make money?
Free Tv channels earn revenue by displaying ads between the shows.
How much does it cost to start a TV channel?
To start a non news channel the net worth of the company should be around 5 crores.
What is the benefit of high TRP?
If a channel has high TRP they can charge a higher amount from advertisers.
What is the revenue model for TV Channels?
The two key methods of revenue for TV Channels are:
- Subscriber fee
- Advertising
How many TV channels are there in India?
There are 850 TV channels in India.
What is full form of TRP?
TRP stands for Television Rating Point.
Who calculates the TRP for Television Channels?
TRP is calculated by Broadcast Audience Research Council using “BAR-O-meters”.
