What is Involved in TV Production?
The production of TV Shows is different from film in many ways. Below are the major ways that the two industries differ.
Behind TV Production
Film production involves a large team of independent producers, whereas Network Television is mostly dominated by major studios and a few large independent producers. The few independent producers involved in making a TV show will often have production-financing deals with a large studio or other independent producers. The industry requiring the cooperation and symbiosis of producers and studios is an unfortunate result of the high costs of producing new and original programming. The high costs eclipse first-run license fees and so producers need to make long runs of at least 22 episodes in order to run in a 5-episode week and profit from foreign sales and reruns.
TV Productions and Deficit Financing
Deficit financing is one of the most, if not the most important aspect of Network TV production. It ultimately determines whether or not someone can produce. Knowledge of how series are financed and created is useful in understanding deficit financing.
The Federal Communications Commission (FCC) restricts a TV Network’s ability to control Network Programming in order to create a competitive environment. This FCC restriction hinges on most prime-time series not being owned by a Network, but rather licensed to them by independent producers.
How Networks Pay for Prime-Time Series
In order to make their programs more attractive, TV Networks require producers to budge each hour of a new series over $1.1 million. Starting license fees are around $800,000 to $900,000. Networks also pay arrangement, creating a budget deficit for TV producers of anywhere between $300,000 to $500,000 per episode
How Do Independent Producers Recoup The Deficit?
A recoupment strategy can be a tenuous process. Most producers could recoup the difference by having a repository of around 60 episodes, meaning 22 episodes for three or four syndicated years. This recoupment strategy is fraught with possible issues, including:
- TV Networks may not renew past a pilot
- The series may not be successful upon syndication
- Even a successful show may take several years to become profitable
So, the following caveats may be worth considering:
- TV producers must be large, experienced, and diverse. They must be able to front the entirety of the the required production money in hopes of recouping the deficit in the future
- TV Producers must have a balanced programming portfolio, including one or more prime-time series. Ideally, a mix of programs in different stages of development and syndication should be yielding profits
- TV producers must be aware of two evolving trends. First, the growing number of new programming channels and the new media to broadcast and monetize programming. Second, unscripted programs may not have reruns, but there are other opportunities to monetize.