ENGESKI JEZIK 4

Ways of financing television

DRAŽEN DOMINKOVIĆ

Five new words

• bumper• pay TV• compulsory• couch potato• teleprompter

Funding of television

‘’...television is very expensive toy that spends a lot of money'‘

3 ways of financing:

WAYS OF FINANCING TELEVISION / ENGLESKI JEZIK 4

Government funding

Commercial sources

Television licence fee

Commercial TV Vs. Public TV

• Commercial televison• More viewers - more advertisers

• the program adjust to audiences who are interested advertisers

• Public television• Public service

• Television for all citizens - special legal obligations

• children's, educational, scientific, documentary and cultural program

WAYS OF FINANCING TELEVISION / ENGLESKI JEZIK 4

Television licence fee

• official record of payment for the reception of television program

• paid by all owners of the receiver

• relatively great freedom in compiling the program

• two-thirds of the countries in Europe ( first country- UK)

WAYS OF FINANCING TELEVISION / ENGLESKI JEZIK 4

Television advertisement

• for most privately owned television networks - only source of income

• almost all public TV – part of the income

• restrictions

WAYS OF FINANCING TELEVISION / ENGLESKI JEZIK 4

Task – fastes response

• Can you recognize the brand?!

• Men vs. Women

• 5 commercials – scoring:• Correct product type – 1 point

• Correct brand- 3 points

• Wrong answer- minus 2 points

WAYS OF FINANCING TELEVISION / ENGLESKI JEZIK 4

PAY TV• the audience was saturated with a large

number of commercials

• television program without commercials -> regular monthly fee

• The first subscription cable channel HBO( Home Box Office)

• directly depends on the judgment of the audience

WAYS OF FINANCING TELEVISION / ENGLESKI JEZIK 4

Government funding

• negative side- servants of the government

• Belgium-government funding + licence fee

• Estonian public television - ETV –government funding

WAYS OF FINANCING TELEVISION / ENGLESKI JEZIK 4

Other sources of income

• Sales programs (BBC)

• Publishing (weekly)

• New media (electronic media)

• Copyright (characters)

• Selling advertising blocks

• Sponsorship (USA)

WAYS OF FINANCING TELEVISION / ENGLESKI JEZIK 4

United States of America

• Television took over a radio commercial model

• The first official, paid television advertisement - NBC (NBT)- on July 1, 1941

• Bulowa watches ($9.00)

• PBS (Public) – no ads, sponsorship allowed

WAYS OF FINANCING TELEVISION / ENGLESKI JEZIK 4

The fundamental principles of television advertising

• Communications Act- 1934 - advertising must be clearly separated from program

• In the 1960s a typical hour-long American show -51 minutes excluding advertisements ; today - 42 minutes long

• In 1971 - prohibited advertising of cigarettes and tobacco products

WAYS OF FINANCING TELEVISION / ENGLESKI JEZIK 4

The Most Expensive 30 Seconds on TV

• the most effective mass-market advertising format

• Investing huge money in advertising – 1983rd - $ 15 billion

• 30-second TV spot during Super Bowl - US$4 million – (seen by 100 million viewers)

WAYS OF FINANCING TELEVISION / ENGLESKI JEZIK 4

Top 10 most expensive commercials ever made

10. Apple – '1984' (Ridley Scott) – $ 1.5 million

9. Go Daddy - $2.4 million

8. Ferrari/Shell - $4.5 million

7. Honda - $6 million

6. Pepsi (Britney Spears) - $8.1 million

5. Carlton Draught

4. Chrysler (Eminem) - $12 million

3. Aviva (Bruce Willis, Ringo Starr, Alice Cooper) - $13 million

2. Guiness - $16 million

1. Chanel (Nicole Kidman) - $33 million

WAYS OF FINANCING TELEVISION / ENGLESKI JEZIK 4

The influence of sponsors: censorship

– Chevrolet- TV show ‘Gunsmoke’ – banned phrase - ‘fording a stream’ (cross the river) -associated with a rival company Ford

– American Oil and Gas Traders- movie ‘Judgment at Nuremberg’- banned phrase -‘the gas chamber’ - puts gas in a negative context

– The $ 64,000 Question - sponsors supplied the answers

WAYS OF FINANCING TELEVISION / ENGLESKI JEZIK 4

Europe: financing of public television

no ads:

BBC,Belgian (state budget + licence fee) ,Finland (25% of

commercial) ,Norway, Sweden, Estonian (ETV - only the state budget)

financing exclusively from commercials: Monaco, Spain, Portugal

mixed (all others)

WAYS OF FINANCING TELEVISION / ENGLESKI JEZIK 4

European Regulations on Advertising

• Advertising at 15% of total daily broadcast program

• EU Guidelines for Public Television-minimum produce 55% of domestic programs, and 10% ordered from local independent producers

• Commercial TV-15% of own production, 55% of programs in the local language

• forbidden to advertise - cigarettes and tobacco, prescription drugs

WAYS OF FINANCING TELEVISION / ENGLESKI JEZIK 4

Licence fee in Europe

REKLAME I NAČINI FINANCIRANJA TELEVIZIJA / TIPOLOGIJA MEDIJA

€5,81 €46 €65

€113,5 €131 €137€170

€215,76

€323

€385

€ per annum

€ per annum

Croatia• HRT - Croatian Radiotelevision Act

• a percentage of the average net salary in the previous year, currently equal to 1.5%– all owners of equipment capable of receiving TV and radio

program (about €137 per year per household)

• 70% licence fee / 30% marketing – advertising limited by law to 9% per hour

• Commercial TV : RTL, Nova TV ...

WAYS OF FINANCING TELEVISION / ENGLESKI JEZIK 4

Questions

• How is TV funded?

• What was the first advertisement on commercial television and when was it shown?

• How much does it cost to advertise during the Super Bowl?

• Which European country has the most expensive TV subscription(licence fee)?

• What is Pay TV?

WAYS OF FINANCING TELEVISION / ENGLESKI JEZIK 4

More questions

– Can commercial breaks during the film spoil the artistic impression of the film?

– Is licence fee for HRT too expensive, and what do you think of the quality of television programin Croatia?

– Should alcohol or tobacco companies be allowed to advertise? Why or why not?

WAYS OF FINANCING TELEVISION / ENGLESKI JEZIK 4

Conclusion– Television needs a lot of money

– commercials- an important factor in the survival of all commercial, but also many public television

– they offer many dangers, but there are numerous laws and codes that must be respected

WAYS OF FINANCING TELEVISION / ENGLESKI JEZIK 4

Literature

– http://www.clicktop10.com/2013/09/top-10-most-expensive-commercials/

– http://www.nielsen.com/us/en/newswire/2013/the-super-bowl-the-most-expensive-30-seconds-on-tv.html

– http://www.hrt.hr/pristojba/sto-je-javna-televizija-i-zasto-se-placa-pristojba

– Damir Matković, Televizija igračka našeg stoljeća, AGM , Zagreb, 1995.

REKLAME I NAČINI FINANCIRANJA TELEVIZIJA / TIPOLOGIJA MEDIJA

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