Revenue Generation from Watching an Hour-Long Television Program

The revenue generated from watching an hour-long television program can vary widely, depending on several factors, including the type of program, the network, and the advertising rates. This article will explore the revenue generation from both advertising and streaming services, and provide a breakdown of the potential revenue for a popular show.

Revenue Breakdown

Advertising Revenue: Television networks primarily earn revenue through advertisements. The cost of a 30-second ad during prime time can range from $5,000 to over $500,000, depending on the show's popularity and viewership. On average, networks might earn about $20 to $30 per viewer per hour in advertising revenue for popular shows. This can be significantly lower for less popular programs.

Streaming Services

For streaming platforms, revenue mainly comes from subscriptions rather than ads. The revenue generated per viewer can differ based on the number of subscribers and their subscription fees. Unlike traditional television, streaming platforms do not rely on Nielsen ratings as a primary indicator of viewership.

Total Revenue Calculation: If a show attracts one million viewers and earns an average of $25 per viewer in ad revenue, the total revenue for that hour-long program would be approximately $25 million. This demonstrates that while the revenue generated from watching an hour-long television program can vary, it's generally in the range of $20 to $30 per viewer for ad-supported shows, with total revenues depending on the overall viewership and advertising rates.

Regionally and Nationally

The revenue generation from television programs is heavily influenced by regional and national factors. Let's consider the Regionally perspective first:

SQAD Cost-Per-Point: In a specific region, the cost per ratings point is determined. Take the SQAD Cost-Per-Point and multiply it by the Nielsen rating. One single television ratings point (Rtg or TVR) represents 1 of viewers, which is approximately equal to 1 million household viewers. Nationally: There are published rates for the whole nation, which are available. For instance, in the 2004-05 season, a single national household ratings point represented 1,096,000 households.

Specific Example

A specific example can illustrate the revenue generation from a high-demand program. In 2009, Sunday Night Football, which was one of the costliest TV shows, charged an average of $339,700 for a 30-second spot and had 18.8 million viewers. This would make the cost per viewer for one 30-second ad approximately $0.018.

Since a network-televised game has ten prescribed commercial breaks during each half, we can assume that 4-5 30-second spots per break would generate between $0.72 to $0.90 per viewer. This is based on data for a highly expensive show in 2009 and is a rough estimate.

Conclusion

While Sunday Night Football almost hits the revenue mark, a 30-minute sitcom would not. Top sitcoms generate between 12.5 to 18.5 million viewers but, given they only contain 16-32 commercials, even if they earned $0.01 per viewer, NBC's '60 Minutes' in 2009 was 93.7k per spot, assuming the same viewership as today, that would be $0.006 per viewer, making the revenue potential at best $.32 cents per viewer for '60 Minutes' ranked 12 today.

It's crucial to note that the concept of the undervalued 99 cents idea might not apply because the bandwidth infrastructure is built into delivering broadcast television. If you're planning to deliver 18.8 million viewers for a program that can sustain 10 commercial breaks, you need to plan accordingly, as it will significantly impact the cost.