Operating Model

Posted: September 24, 2014 by Alan Hardcastle in CMP 14_16
Tags: , , , , , ,

The Operating Model refers to how the broadcasting company pulls money in (funding) and spends it (budget) in order to make money (by reaching their target audience).

We can look at the 3 main models in the UK – BBC, ITV and (halfway between) Ch4. Fro the moment we will avoid subscription models such as Sky (Sky sports topping ratings with about 1.5m for an event pus sky behind Ch5 in ratings, so we will stick with the main broadcasters).

BBC

Semi-autonomous, paid for by License fee. The Trust exist to ensure they spend the public money reasonably – so they publish an annual report of finances. They gather ideas through commissioning. Members of the public, producers and production companies can all pitch for a commission, showing they can meet the requirements fro the audience, budget creative and legal requirements for that channel, genre and time slot. Often there are specific target audiences, but in general BBC1 aim to appeal to a mass audience.

They have the means of production in house. They own studios, and rent them out to other companies. They often use in house production teams, and hire in freelancers.

ITV

ITV as a series of channels is  funded by advertising and owned by ITV PLC, which means there are shareholders. They commission shows based on demands of their advertisers – so they are always attempting to commission mass appeal shows.

Again, ITV PLC own studios which can be used by ITV productions and independent companies alike. Most production personnel tend to be freelance.

Advertising revenue is a complex subject. IN general, the cost of an advert depends on production costs of the advert, the time slot and the popularity of the show. Premium shows such as Coronation Street will cost £1k’s, whereas shows in the middle of the night may cost £10’s

CH4

Ch4 exist as a commissioning body, supporting UK productions and independent production houses. Pubic cannot pitch an idea directly, they must be associated with a production company beforehand. Ch4 is funded by advertising revenue, but unlike ITV1 or BBC1 has a remit to appeal to a minority audience.

Funding and Budget

So, in general  – the funding is where the money comes from – adverting, TV License, commissions etc – and the budget is where it goes – Studio hire, freelancers, sets, rights, logistics, artists…etc. Look at the commissions and get an idea of how much in general is set to one side to make a show.

Get a draft going for next week that explores and explains these elements and links into what we looked at last week.

 

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