The first television network to maintain regular service was launched by the National Broadcasting Company (NBC) in June 1947. The NBC initially served New York City, Philadelphia, Washington, and Schenectady, with the network spreading west across the United States via interconnected partner stations. By 1951, there were four different networks in operation with most only broadcasting for a few hours each day. This number increased in the following years as television sets became more affordable for the average consumer. Today, television is a staple form of entertainment for billions of consumers around the world. This has attracted multiple and varied monetization strategies.
Advertising
Advertising is the primary way TV networks make money. Networks that do not create their own television shows instead purchase shows from producers that they believe will be popular.
Advertising revenue has been falling in recent years as consumers record television shows to watch later or download them on the internet.
Subscriptions
Television networks also sell subscriptions to consumers. Cable networks like HBO offer access to exclusive content if the consumer is willing to pay for the privilege. Note that in most cases, the cable network still earns money from advertising revenue too.
Some cable providers use this revenue to develop content of their own to keep consumers subscribed. Though strictly not a television network, the subscription-based revenuemodel has also been used to great success by Netflix.
Merchandise
Like any brand, television networks can also make money selling merchandise from television shows where they are licensed to do so.
HBO operates an online Game of Thrones merchandise store where it sells sweaters, shirts, mugs, framed prints, and dragon eggs, among many other items.
eCommerce sales have added an important additional revenue stream for TV networks, removing the middleman and allowing fans to interact with the network directly.
Sponsorships
On occasion, the television network may accept sponsorship money from another brand to have its products featured during a show. This is another form of advertising known as product placement.
Cookie brand Oreo has an established partnership with the sitcom Modern Family and was also featured on Friends. AMC period drama MadMen also advertised Heineken beer throughout its seven-season run.
Several sponsors may compete against each other to have their products featured, which maximizes profit for the TV network.
Key takeaways:
The first network to maintain a regular TV broadcast was the NBC in 1947, with the popularity of television entertainment spreading across the United States as televisions themselves became more affordable.
Television networks make money by selling advertising spots to brands looking for exposure to large audiences. Some also sell premium subscriptions in addition to advertising revenue.
Television networks that own the rights to certain content can sell branded merchandise through online stores. Many also sell sponsorships to brands that want their products featured in television shows.
YouTube was acquired for almost $1.7 billion in 2006 by Google. It makes money through advertising and subscription revenues. YouTube advertising network is part of Google Ads, and it generated more than $28B in revenue by 2021. YouTube also makes money with its paid memberships and premium content.
Blogging is a prevalent and well-established practice, with popular blogging platform WordPress powering many websites on the internet. While a few successful bloggers really make money, those who do usually monetize through affiliate marketing, Google AdSense (or other advertising platforms), sponsorships, memberships, or selling their own digital and physical products.
TikTok, owned by the Chinese tech giant ByteDance turned as among the most successful native micro-video platforms, and it became the go-to platform for millions of young users. Thus, the “TikToker” has already become the evolution of the “influencer” from platforms like Instagram. Those TikTokers make money in a few ways, such as monetary gifts, sponsorships, advertising agreements, affiliations, and more.
Online influencer marketing is a relatively new creation, but it has fundamentally changed how brands communicate with consumers. People with targeted audiences are now the focus of advertising efforts. Influencers can tap from small to larger audiences thus, giving companies another way to promote their products. Indeed, influencers make money by selling digital products via sponsorships and affiliations, brand ambassadors programs, and physical products.
Podcasts make money in several ways. The primary sources of revenues from podcasting come from affiliate marketing, advertisements (in the form of pre-roll, mid-roll, post-roll), sponsorships, selling your own products, or by using podcasting to sell consulting services. Podcasting is an effective marketing and distributionchannel, and it can be integrated within a businessmodel.
Influencer marketing involves the marketing of products or services that leverages the popularity, expertise, or reputation of an individual. Influencer marketing is often associated with those who have large social media followings, but popularity should not be confused with influence. Influence has the power to change consumer perceptions or get their audience to do something different.
Instagram makes money via visual advertising. As part of Facebook products, the company generates revenues for Facebook Inc. overall businessmodel. Acquired by Facebook for a billion dollar in 2012, today Instagram is integrated into the overall Facebook business strategy. In 2018, Instagram founders, Kevin Systrom and Mike Krieger, left the company, as Facebook pushed toward tighter integration of the two platforms.
TikTok makes money through advertising. It is estimated that ByteDance, its owner, made over $17 billion in revenues, for 2019. While we don’t know the exact figure for TikTok ads revenues, given it counted over 800 million users by 2020, it is a multi-billion company, worth anywhere between $50-100 billion and among the most valuable social media platforms of the latest years.
Discord makes money in several ways. From its Discord Store, where users can buy premium games, to the seller shops, that primarily works with a 90/10 revenue share for developers and game sellers. And the ability for sellers to get more visibility on the platform by adding features to the game visibility.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
