Getting To Grips With The TV & Film Industry

The BBC is the largest broadcasting organisation in the world and is a public service broadcaster, established by a Royal Charter and funded by the licence fee that is paid by UK households. It was founded on 18th October 1922. The BBC uses the income from the licence fee to provide services including 8 national TV channels plus regional programming, 10 national radio stations, 40 local radio stations and an extensive website. BBC World Service broadcasts to the world on radio, on TV and online, providing news and information in 32 languages. It is funded by a government grant, not from the licence fee. The BBC also has a commercial arm, BBC Worldwide. Its profits are returned to the BBC for investment in new programming and services. It's headquarters are based in London but the area it serves is worldwide. The BBC has diversified into many different things such as the internet, radio, nes, television and interactive television. The BBC cannot do any form of advertising either as it is a Public Service Boradcaster. They also can't make any judgment or be biased towards any political parties.

Film Financing

There are many ways in which films get funding to make a film. Im going to be talking about the four main methods which help to get the money they need to fund a film. These four methods are Government Grants, Tax Schemes, Debt Finance and Equity Finance.


The term Governement Grants means where a number of governments run programs to subsidise the cost of producing films. For instance, in the United Kingdom the UK Film Council provides funding to producers provided certain conditions are met. Also, for exmaple, states in America such as New York and Oklamhoma provide a subsidy on the basis that all guidelines are met, and all or part of the film is filmed int hat state.These Governments are willing to provide these subsidies as they hope it will attract creative individuals to their territory and stimulate employment. Government subsidies are pure grants most of the time, where the government expects no financial return.


Tax Schemes are created which effectively sell the enhanced tax deductions to wealthy individuals with large tax liabilities. The individuals pay the producer a fee in order to obtain the tax deductions. The individual will often become the legal owner of the film or certain rights relating to the film, but the producer will in substance continue as the real owner of the economic rights to exploit the film. Also, films with little commercial or artistic merit are produced simply to generate tax deductions.


Debt Finance is based on pre-sales and television pre-sales. Based on the script and cast, pre-sale is selling the right to distribute a film in different territories before the film is completed. If a film has a big name in it and the rights are sold, they expect the film to do well once it has been made. Once the deal has been made the distributor will insist that the producer delivers on certain elements of the content and cast. Upon the singing of a pre-sale, a deposit of 20% will be made by the buyer into the films bank account. Although it is more usual for a producer to sell the TV rights of this film after it has been made, it is sometimes possible to sell the rights in advance and use the money to pay for the production. In some cases the television station will be a subsidiary of the movie studio's parent company.


The fourth method is Equity Finance. Equity financing requires the filmmaker to sell interests in either the film or film company in exchange for the funding. The of this method is that the investor will only recieve his money back if the film shows a return. If a filmmaker sells 50% of the corporate interest to an investor, for example, then the investor will lose his entire investment if the film is a complete failure. If the film is a tremendous success, the investor will receive 50% of every £/$ of profit, which is far more than what a lender would get.

Television Funding

TV channels make their money through different types of funding, depending on the type of broadcasting. There are 3 types of broadcasting which are Public Service, Commercial and Subscriber. An exmaple of a Public Service Broadcaster is the BBC. Its television service makes it's money by the government through the liscence fee, syndication, competitions and merchandising. The liscence fee is £145.50 a year, which works out as £12.13 a month and 66% of this value goes to the BBC. They make more of their money through syndication by selling the rights of shows and programmes to other networks so they can broadcast them too. Eastenders is an exmaple of a syndicated program through the BBC. The rest of their funding is made through merchandising and competitions. The BBC merchandises many things and it has its own website and shop so customers can purchase these items. the rest of their moeny is made through competetions. The BBC hosts competitions, which persuades epople to phone up and vote. Its the cost of the voting which contributes tot he funding of BBC television.


On the other hand, Commercial Broadcasters such as ITV and Channel 5 make their money by advertising, aswell as sponsership, syndication, competitions and merchandising. ITV was the country's first commercial television provider. Advertisements are the main source of income for ITV so they try to have as many as they can throughout programmes. ITV aim to build and bring brands to life by sound, vision, motion, emotion and impact. Commercial Boradcasters as well as Public Service Boradcasters make their money through syndication. An example of a syndicated program is Coronation Street, as it is shown on +1 networks. A significant number of Channel 5 programmes are syndicated too, for example Home and Away and Big Brother. Syndication starts off in the country in which the program is first issued then it can expand to international usage. Like the BBC, ITV and Channel 5 host a lot of competitions. For example, the X Factor makes millions of pounds through its voting on the acts. This is also a popular show therefore advertising revenue can be higher. Live phone-ins and text messages that are voting for something is what makes the company's a bit of money. Both of these TV companies also use merchandising to gain money. On their websites they have links to their merchandisning sites where consumers can buy stuff that has been shown on programs.


Channel 4 is part Public Service and part Commerical Broadcaster. It is not publicly funded but it is independent on the Government. They are predominantly funded by sponsorship and advertising.and governed by a unitary board made up of executive and non-executive directors, who are responsible for ensuring that Channel 4 fulfils its remit and delivers its financial responsibilities. Channel 4 also has sponsorships. These sponsorships can give a brand instant fame and make them stand-out. It's great for raising awareness and Channel 4 offer a creative process with acareand insight, so they can deliver the best return on investment. Like the BBC, ITV and Channel 5, Channel 4 also make money through syndication and competitions. Channel 4 syndicates programmes such as Hollyoaks and The Big Bang Theory.


The last one are Subscriber Boradcasters. These are Sky and Virgin Media and are different from the others because customers subscribe to their network and pay for the packages that they offer. The packages contain direct broadcast satellite, television, broadband and telephone services. Sky and Virgin both make money through advertising too, aswell as syndication, competitions and merchandising. Also, the quality of the programmes shown depends on whether a person will subscribe to them, so its important for Sky and Virgin to show great programmes so they can attract the customers to subscribe to them. Otherwise they wouldnt make much money. There is a lot of competition between these 2 companies, and they are constantly bringing out different packages in hope of new customers subscribing to their networks.