How do television networks and radio stations make profit?
I’ll break it down into the segments for you – but the networks and stations all make their money from advertising. You should note that television advertising is a multi-billion dollar a year business. It’s much bigger than you’re giving it credit for. Television networks: The best approach is using an example. For example, ABC wants to creat Lost. They pay for a pilot and make a few episodes. They air the show on all ABC affiliates in prime time – when most viewers are watching and when advertising costs are very high. Since it’s in prime time, they normally keep all but two or three of the commercial spots that air during the 1 hour show. This is true if they own the local ABC affiliate or not. Then they package a national advertising deal with Pepsi or Bud Light or Ford or whatever and sell it. They make a boat load of money and they made even MORE than that when it “first started” . . . . today, it’s tougher on TV b/c of the internet and cable channels, etc. Television and radio s
