Question about tv station licence fees and enterprise

[Mark Greatrex]

Hi there. I was watching the shuttlepod show interview with Rick Berman who said that the license fees the television networks were paying for enterprise were reduced to make more stations want to take the show, and it sounded like because they werent making much money with enterprise, and it was an expensive show to produce compared to their other shows at the time, reduced the value that the studio saw in star trek. But does anyone know how this might have worked? Did they rely on the television networks money from the licenses to have enough to produce the show, or did some of that also come from the tv networks and advertising. (I guess only those that worked at these places might know) Hope that's not too confusing, just something I've been interested to find out about....

 

[Mark Greatrex]

Correction this should have said (Did they rely on the television stations money)

 

[Takeru]

For network tv generally speaking a studio sells a show to a network, the network pays the licensing fee. The network then airs the show and makes money from ads, the studio doesn't get anything from that, the ads are for the network to recoup the licensing fee and hopefully make a profit.

The studio has other revenue streams, syndication if the show runs ling enough, international sales, home video etc. but the network sees nothing from that.

So a show can be not profitable enough or unprofitable for a network but still generate profit for the studio, so a studio might lower the licensing fee to give the network an incentive to keep the show around even if that means the studio makes little profit fro the fee itself. Maybe international deals are very profitable or the studio wants to get enough episodes for syndication because that will be beneficial for them I the long run.

So early in a show's run a studio relies on the licensing fee a lot, later in a show's life that can change.