How The TV Industry Works


The film and TV worlds differ greatly both in their creative scopes and the business models used to finance them. The key feature is that both use deficit funding to produce. Films rely on box office and ancillary markets (DVD, VOD etc) to generate profits, whereas TV relies on selling to networks and syndication.

There are three levels in the TV chain:

1) PRODUCTION COMPANIES

Have overall deals with networks and are financed by the studios to develop and produce TV shows on a first look basis. These are analogous to first look deals by production companies. They generally don’t have much money, but rather talent. That is why studios go into business with them.

An overall deal for a TV show typically ranges from $0.5 to 3 million. At any given time, studios may have 20-50 overall deal with production companies to feed their production chain.

2) THE TV CALENDAR
This is a typical production cycle for traditional network TV. Cable TV follows a similar process, although the time frames are altered to allow for year round commissioning.

UPFRONT PRESENTATION/SELLING –  MAY – studios show pilots to networks, other buyers and advertisers.

STAFFING SEASON – APRIL to JUNEwriters get staffed onto shows.

DEVELOPMENT SEASON – JULY to OCTOBER – bought shows are developed into series depending on orders from the networks.

FALL SEASON – SEPTEMBER – new shows typically air after the summer break when ratings season commences.

SHOOTING SEASON – JANUARY to MAY – TV shows are filmed in readiness for the selling season.

Networks hear upwards of 1000 pitches for TV shows annually. They buy 75-100 projects (concepts) at the script commitment stage.

Of these, 15-30 scripts are shot. Around 4-8 are aired as new shows. 2-3 make it to through a whole season without being cancelled. Hopefully, 1 of these new shows will be a hit. That’s a 0.1% chance of commercial success. Still, that’s a thousand times more probable than being struck by lightning!

Typically, an hour of network TV costs around $3 million to produce. Studios sell it to networks for $1.5 to 2 million. The shortfall is made up in syndication (reruns). Although the price per episode drops dramatically (to around $100k), the number of times it is broadcast adds up to real profits.

STUDIOS: Develop TV projects with production companies, finance and own TV shows.

NETWORKS: These are distribution media who are often owned by parent studios, whose production arms feed the network chain. Since the parent networks don’t always distribute TV shows from their parent studios, they can sell them to other networks. “Two And A Half Men” is produced by Warner yet screened on CBS.

There are five major networks in the U.S which control the lion’s share of the scripted television market: ABC-Disney, CBS, Time Warner, NBC-Comcast, Newscorp (Fox). Sony TV is a production house which doesn’t have its own a network due to foreign ownership laws in the U.S.

The influence of Web TV is still an emerging quantity which is doing a good job of disrupting the network TV industry as cable TV subscriptions continue to fall in the U.S. in favor of on demand streaming.

scriptfirm final logo colourFor in depth Film & TV script analysis visit Script Firm.

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