TV Production Business Model

• Based on a 2017 updated report, audio-visual production companies such as TV production firms typically spends on the following: "pre-production costs, artistic production costs, technical production costs, and post-production costs."
• The pre-production costs typically include the following: "story-line and screenplay preparation, project research and development, feasibility study, and pre-recruitment of technical and artistic resources."
• As for the artistic production costs, these usually include the director and the cast.
• For the technical production costs, the following are usually included: "producer fee, editing, crew, extra talent, wardrobe, set, location, transportation, music, publicity, fringes, insurance, and equipment."
• With regard to the post-production costs, film and lab editing expenses are typically included.
• From an economic perspective, audio-visual solutions are classified as "experience goods."
• From an accounting perspective, these products are part of "intangible assets."
• The potential of TV audio-visual products to earn revenues will also be dependent on the willingness of the audience to pay for the possibility of viewing the product.
• This can then convert them from potential to actual paying viewers.
• The higher this conversion can happen, the bigger the earnings of these TV shows.
• The ratings of TV shows also impact the revenue of the producers.
• The rising demand for TV shows and the "evolution of distribution platforms from increased internet" are the factors that are propelling the earnings of the sector.
• Technological innovations are also expected to enhance customer interest and engagement.
• Revenues are linked to the potential of bringing in more paying viewers on several "markets of exploitation."
• Some of these markets include the following: "theatrical, home video, Pay TV, PPV, free TV, new media, ancillary, and derivatives, and foreign markets."
• Revenue sources of TV production companies typically come from the following: "advertising revenues, subscription by viewers, fee paid by viewers and public funds, private broadcasters, and public broadcasters.