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Tag: TV Channels

  • Revenue Generation Model of Television Channels

    The Indian Television Industry produces thousands of programs in many Indian languages with the Hindi, Tamil and Telugu factions of the industry being the largest.  In 2021, the Indian Television Industry was worth INR 720 billion and is estimated to reach INR 826 billion by 2024.

    Emergence & Expansion of the Television Industry

    Television emerged on the Indian market in 1959 as an experiment which offered two-hour programs for a week.  It soon garnered popularity and by the 1970s television centres were opened in other parts of the country.  The year 1976 saw Doordarshan emerging as a separate government department and in 1982 it telecasted the 9th Asian Games. The 1990s saw the television industry expand with the emergence of private television channels.  It began after CNN broadcasted the Gulf War.  STAR (Satellite Television Asian Region), which was based in Hongkong entered into an agreement with an Indian company giving birth of  Zee TV. Several other channels came into existence during this time including regional channels and international channels like CNN, BBC and Discovery offering different categories of entertainment to a wide variety of audience.  This expansion also gave rise to DTH (Direct To Home) cable operators. By the year 2016, Indian Television boasted of 857 channels of which 184 were paid channels.

    Television has become an integral part of people’s daily lives.  The popularity of the medium is due to its capability to cater to the needs of its audiences through various shows of different genres telecasted through various channels.

    Revenue Generation Model

    As with any commercial enterprise, television industry operates with the basic idea of generating revenue and posting profits.  The various channels generate revenue from three basic streams – Advertisements, Subscription Services, Sponsorships & Product Placements, Licensing owned Content and Re-transmission Fees.

    1. Advertisements

    Television channels sell airtime and slots to advertisers who wish to showcase their products or services during commercial breaks.  The slot and airtime rates depend on the time and on the popularity of the show as well as the time-length of the advertisement itself. Advertisements broadcasted during prime time cost more than those which are broadcasted at low viewership slots, like mornings or early evenings.  Even the TRP (Television Rating Points) ratings of the show affect the airtime rates.

    2. Subscription Services

    This is a two-pronged process.  Some television channels are made available to subscribers, by DTH operators, on payment, which could be monthly or annually.  A part of this subscription fees goes to the channel itself.  This model of revenue generation is largely volume based.

    3. Sponsorships & Product Placements

    Television channels are a high interest sponsorship venue due to their wide and deep audience penetration.  They receive funding from sponsors for programming.  A high revenue is also generated from specific advertiser product placement within their shows.

    4. Licensing Owned Content

    Television Channels also produce and distribute content like programs or movies and generate revenue by licensing or outright selling the rights to other networks or streaming devices.

    5. Re-transmission Fees

    Television channels charge fees from cable distributors and satellite operators to allow them the right to retransmit their local signals.  This can happen for a program that sees high demand.

    Specific coverage of live events like sports, concerts or award shows are also a high revenue generating stream for television channels.  Such events attract large audiences which, in turn, translate into higher advertisement rates.  Another minor, however, effective revenue generation source is the internet. Television channels stream their program episodes via YouTube and generate income on the number of times the program is viewed.  This also works as an advertisement for the program and the channel and can increase their audience reach.

    Trends in the Television Industry

    The delivery of television programs to the audience has undergone a huge change, especially in the recent years. What was delivered through relied antennas has switched to dishes, distribution through cable networks and direct broadcast satellites.  Through the use of Internet Protocol Television, programs are available to watch on mobile phones.

    Conclusion

    The television industry is fiercely competitive and its revenue generation is heavily dependent on capturing the viewers attention and sustaining it.  Effectively, it is that attention that the channels sell to the advertisers.  While the TV channel landscape 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.

    💡
    The revenue of TV channels in India primarily comes from advertising, which contributes around 70-80% of their total revenue.

    • 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
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    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”.

  • How Does KBC Make Money?

    Our race is incredibly curious about everything, from what’s going on in our own residential neighbourhoods to what’s going on in the rest of the world. From childhood, when we were curious about everything, through maturity, when we wanted to know the solutions to every question, we’ve all been on the lookout for answers to any problem.

    Instead of answering subject-related questions in class for the sake of getting good grades on your exams, there’s a show that pays you a lot of money for correctly answering core knowledge questions. Doesn’t it sound amazing that a game show will pay you a million dollars if you answer all of the questions to the end? If not, you can keep the money until you’ve answered all of the questions properly.

    That show is called ‘Kaun Banega Crorepati,’ which is hosted by a prominent star, Amitabh Bachchan and has the highest TRP to date among other Indian Reality shows. We all appear out of nowhere to reunite with our family, especially on weekends to watch Kaun Banega Crorepati, right?  We all enjoy answering questions and want to know the answer to them.

    The show is all about answering questions, and the competitors have presented a total of 16 questions. The ‘Fastest finger Contest’ is the opening round, in which contestants must arrange four answers in seven seconds to progress to the main gameplay. Furthermore, each of the 16 questions has a monetary award associated with it, ranging from 1000 to 3000 to 7 crores for question 16 and four types of lifelines to help you out. You might be wondering how the KBC will get 7 crores to their winners out of nowhere. The answer to your question can be found in this article.

    Presenting Sponsor
    Telecom Partner
    Commercial Breaks
    SMS Revenue

    Presenting Sponsor

    As you can see, the host of the KBC show would list out numerous firm branding as sponsorship before taking a break. These companies are paying a huge sum of money to KBC’s production house to run the show successfully, with 70% of the proceeds going to prize money and the host’s compensation, according to reports.

    KBC Sponsors
    KBC Sponsors

    Hyundai Motor India Limited, Asian Paints Royale Glitz, Ultratech Cement, and Complan are among the title sponsors for the KBC. Co-sponsors include CERA, PharmEasy, IDFC First Bank, LIC of India, and Bharat Matrimony. The Reserve Bank of India is the KBC’s special partner, providing approximately 400 crores in funding.

    Telecom Partner

    The Telecom industry, which provides approximately 100 crores to the show, is another key sponsor. You might wonder what role a telecom company plays in the program; well, it plays a big role in everything from choosing the participation in the show (by SMSing correct answers to become a contestant for the next KBC episode) to assisting the contestant during the game (by using the network to call the contestant’s helpline).

    KBC gets a high rate of sponsors from telecom industries, as the show relies much on public relations. As I previously stated, if the player did not respond to the question, he or she would be given three lifelines. It would be advantageous if a friend’s phone and an audience call were both linked to the cellular network. For instance; Idea Cellular Paid 35 Crore for the show in 2010.

    Commercial Breaks

    As we all know, ads act as a beneficiary for any type of business, both for the organization and for the audience. You may well have heard that before leaving for a break, the show’s host list-out various sponsored brands like ‘Cadbury-sponsored and co-sponsored by Byju’s.

    Furthermore, KBC lasts an hour and a half, during which they air roughly 5-6 commercial breaks. These are the slots in which a company can showcase/telecast its products and services to its target audiences.

    Typically, the sponsored brand or any other brand pays a fee to the show in exchange for the show promoting its products during commercial breaks. The above eight advertisers account for 75% of the show’s commercial inventory. The remaining 25% of ad inventory, according to estimates, will be auctioned to spot buyers for over Rs 4 lakh for 10 seconds of an ad.

    SMS Revenue

    Before participating in the competition, contestants must first answer the questions that have been placed underneath the previous episode’s program. People enjoy getting in and doing their best to answer it by submitting the correct answers to the prescribed or given number.

    You may have noticed that a question is posted with the request that viewers answer it and send it to a phone number ‘xxxxxxxx’ below the showtime. Also to register for the show you have to answer a set of questions and KBC charges a small amount to each user sending the SMS which is usually Rs 3/ – per SMS.

    How do TV channels make Money? | How much TV channels earn?
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    Conclusion

    Since 2000, Kaun Banega Crorepati has been one of India’s most popular television shows, presently in its 13th season. The Big B, Amitabh Bachchan, hosts this show, in which players are chosen based on their speed in answering a certain question before moving on to the main game.

    In the main round, 10-16 questions were answered, with prizes awarded based on the weighting of the questions. The winners receive a monetary award based on the number of questions properly answered via a check, which is credited to the winner’s account in 4-5 business days.

    FAQs

    Does KBC give full money?

    Yes, KBC does provides the full money to the winners and the taxes are paid later on.

    How is KBC funded?

    KBC receives money from a variety of sources, including the telecommunications network, sponsorship from well-known brands, advertising, and an Internet communication company. KBC earns money mostly from sponsorship from renowned companies such as Byju’s, Cadbury, and Axis Bank. The Reserve Bank of India is a particular sponsor of KBC.

    How much does Amitabh Bachchan charge for KBC?

    Amitabh Bachchan charges Rs 3.5 crores per episode of KBC.