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How, and how much, do the makers of TV shows get paid?

  • How, and how much, do the makers of TV shows get paid? In a http://www.reason.com/news/show/116787.html, they say they have no problem with people downloading the show. My first thought was, "but doesn't that cut into their profits?", but then I realised I hadn't the faintest idea how the creators of TV shows get paid for their creations, or how much. Or if it's even "profit" we're talking about. Selling movie tickets is a business anyone can understand. It's essentially no different from selling potatoes. If people buy more tickets, the film earns more money*. Same with DVD sales. Sell a billion tickets at five dollars each, and somewhere along the line, $5,000,000,000 is changing hands. But how does TV work? Does a TV series get bought outright for a flat fee, as in, Matt and Trey get a million bucks for a season of South Park and that's it, no matter how well or how badly it rates? And if it rates through the roof and the TV network makes extra money by charging advertisers extra, Matt and Trey get no more? But they use that as a bargaining chip next time around and demand two million? Or do they somehow get a financial share of the show's ratings success? And what's the difference between something like "South Park", which is relatively cheap to make, and the creators can presumably do most of it themselves and deliver it as a finished product, and something like "Heroes" where a huge cast and special effects and location shooting mean that it costs millions per episode and the studio is making a big investment in your project before it can even get started?* I'm aware by the way that Hollywood uses occult accounting methods so that no film ever makes a profit on paper and that just because you created a film that made a billion dollars, it doesn't mean you ever get a cent. That's not the point.

  • Answer:

    Writers and writer-producers are paid a cash fee per original episode by the production company. In union productions, the minimum writer fees are set by collective bargaining agreements, but most writers are paid in excess of that amount per individual contract. For each repeat of the show by the network, and each redistribution of the show (syndication, DVD, foreign sales, authorized downloads, etc.) a residual fee is paid under a complex mix of individual and guild contract provisions -- as a general rule, the payments diminish over time. Now, if you are a show creator and you had some leverage when you created the show, you might also have retained an ownership interest in the show. That's where the really big money is -- you get a great big slice, not just based on residuals, of all sales after the original network contract. Syndication, foreign sales, and (lately) DVDs are big drivers, but another very rich source is the renewal of the network contract after its original term runs out. Whenever a creator is known or rumored to have made a 9-digit fortune from a television show (like Jerry Seinfeld and Larry David, or Matt Stone and Trey Parker) it was their moxie in keeping a heavy equity interest in the show at the very beginning that made it happen. Illegal downloads will only ever disturb creators if they see them as costing them money. Thus far downloading seems well-correllated to increased legitimate (and remunerative) viewership of the show in question. Even when it starts to cut in (if it ever does), most creative types will see the illegal downloads as free promotion for new stuff they might do, and, thus, still accretive to their total income.

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To my understanding, it's different for everyone. Everybody negotiaties their own deal. Some people will take a smaller salary up front for a larger piece of the back end. In cable, most like to be paid up front because there's no money on cable for residuals. All that being said, once a show passes 100 shows, it's generally considered a cash cow, as it is plenty of episodes to be syndicated forever. As the creators of SouthPark, I'm quite Trey and Matt see a piece of every pie. DVD sales, Advertising, Syndication, World Rights, Merchandising, Rentals etc. When they say they have no problem with people downloading stuff off the internet, the last thing on their minds is that people downloading are bypassing traditional modes of commerce, thus taking money from them. I think Trey and Matt deeply understand that having people trading this stuff back and forth, even if it's for free, only strengthens their brand. This is something I firmly believe that everyone in broadcasting and media will have to understand eventually. I had started to write a whole rant about ubiquity being the key to success, and involving Microsoft in the debate, but it seemed like a hijacking.

asavage

Correction: MOST of the time there's no money for residuals. Again, it likely changes deal to deal. As a creator of a desireable property, one has much more lattitude to get the deal they want than someone who plays a night watchman every other episode.

asavage

I work for a documentary show. The show buys works from documentarians. Specific in the contract are re-broadcast rights for a specific period of time and the right to allow the program to be downloaded from the Internet (it's a non-profit). Occasionally, the segment producers will opt out of the latter two for less money if they hope to show the film at festivals or something and don't want it to over exposed.

Mayor Curley

Someone will have a better answer, but I know that it sometimes matters how the creators are credited--they can get paid separately each for "Created By," "Produced By" "Executive Producer," "Directed By," "Written By." I think this is how Jerry Seinfeld and Larry David made such a killing off Seinfeld compared to the other stars of the show.

Brian James

Didn't south park start out as an online cartoon? If it wasn't online first, it was definitely promoted online. Everyone at my college passed the link around and watched it. Most likely Matt and Trey are just very savvy about viral internet marketing.

b1tr0t

Viral marketing = more interest in show = more viewers of show = more profits from ads = bigger paycheck for stars.

softlord

The South Park guys are mega rich by most standards--of course they don't care if you download it. About a year or two after the show started, I read an article where their new contract gave them $18M from merchandising rights alone. Also, you'd be hard-pressed, I think, to find any tv writer who cared if you downloaded their shows. Like most artists, they want their stuff enjoyed by as many people as possible. In addition, once the show's been created, they've been paid the bulk of their cash (at least for shows that won't see syndication). It's the networks that are pissed about downloading because they make much of their money off eyeballs--the more people who watch a given show, the more they can sell commercial slots for during its broadcast.

dobbs

I think I've derailed my own question by starting off with that thing about Matt and Trey. My question really is more "how do people in general get paid". And the most informative answers have phrases in them I'm not sure about like "back end" and "residuals" and so on. Can someone do a "like I'm a ten-year-old" version? But this: >once the show's been created, they've been paid the bulk of their cash (at least for shows that won't see syndication). seems like the rough guess I was making. If Matt and Trey have a movie in cinemas, they continue to earn money from ticket sales as long as that movie is being shown, and more tickets is more money. But if Matt and Trey have a show on TV, it's already over as far as money's concerned. They've signed a contract to produce 22 eps, handed in the first few and have already been paid. Even if every single person in the whole country watches that show every single time it's on, they get no more money?

AmbroseChapel

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