Public service broadcasting is television that is free and does not use commercials. They make there money by either government funding through TV licensing, selling merchandise or formats.

Commercial broadcasting is television that uses advertising and commercials to fund their channel along side premium rate voting, competitions and TV show sponsorships.

Subscription channels are channels that you have to pay for before you watch a single programme they may also use commercials but often once the subscription has been paid for its advertising free.

The TV Industry

The BBC are a public service broadcasting company in the UK and have been from when the company started. I know this because the BBC is funded by TV licensing and they show no advertising on any of there channels.

ITV are a commercial service broadcasting company in the UK. I know this because ITV use advertising on all of their channels and also use premium rate voting, competitions and sponsorships on many of their TV shows.

Public service broadcasting make money through their audiences by making them pay for TV licensing which they will use to fund their company. Another way public service broadcasters make money off their audiences is through merchandise as audiences will watch their TV shows and then buy related products or DVDs produced by the same company as the channel the programme was on.

Commercial service broadcasters make money through their audiences primarily through advertising on their channels. Another way they make money off their audiences is premium rate voting, this is when the broadcaster produces TV shows where the audience is allowed to pay money to vote for their favourite candidates or for changes to be made in the programme, for example Big Brother and I'm A Celebrity Get Me Out Of Here. Another way commercial service broadcasters make money is through competitions where the audience will be allowed to pay to take part in a competition and have the chance to win a prize. Another way commercial service broadcasters make money is through TV show sponsorships, this is when an advert will come on directly before a show is on and it will say this show is sponsored by whatever the sponsors name is.

Subscription channels is probably the most obvious one in terms of how they make money of their audiences. Subscription channels will make the audience pay for whatever it is their watching so they wont need to make any more money and they will consider this as a benefit as they don’t need to include any other forms of funding their company.

How broadcasters make money from their audiences

Advertising – showing commercials before and in-between TV shows

How TV Companies are funded

License fee – making the audience pay for the channel so there is no advertising

Pay per View – paying every time you watch something

Sponsorship – making sponsors pay for sponsorship rights

Subscription – making the audience pay for the channels they watch

The BBC

ITVThe Only Way Is Essex

Netflix

Sky Box Office

License fee – the advantages of using licensing fees are that you don’t need to use many other forms of funding as licensing fees are such a direct, clear payment so as long as the company asks for enough money and gets enough viewers they wont need to find any other forms of funding. The disadvantages of using licensing fees is that as the audience pay for the channel directly that channel often wont be allowed to use advertising or other forms of funding as the audience wouldn't pay for a company which is also trying to sell them advertisements.

Pay per View – the advantage of pay per view is that as soon as the audience decide to watch the show they have already paid the company money. The disadvantage of this is that this show may not get nearly as many viewers as a show that you don’t have to pay for up front.

Sponsorship – the advantage of sponsorships is that the company get large sums of money off other companies for their shows and the audience will not have to pay anything. The disadvantage of this is some people don’t like advertising and also the sponsorship may have a small control other what happens in the show so for example if the show did something the sponsorship didn’t agree with they might drop out of the sponsorship deal.

Subscription – the advantage of subscription channels is that the company gets money directly of their audiences monthly. The main disadvantage for subscription channels is a lot of people will not pay for them meaning they will not get as many viewers as free channels.

Advertising – the advantage of advertising is companies will get money off other companies just to show their adverts in-between the channels shows. The main disadvantage of advertising is that many people don’t enjoy watching advertising and during advert breaks the channel could loss viewers.