It would take huge capital to establish massive cable news channels like CNN, ESPN, and Fox News. You would also require resources to run the business.
You have to splash the cash to cover and report events happening across the globe. Most news stations even have reporters covering events in different parts of the world.
However, some of these businesses are privately owned, while some are publicly owned. Nevertheless, revenue generation and profit are crucial to sustaining a news station or other businesses.
Now, here’s the question.
How Do News Stations Make Money?
You need to consider some points to determine how news stations generate revenue. The first question is, what type of news channel are they?
Two types of TV news channels exist. They are as follows
- Broadcast news channels
- cable news channels
How broadcast news channels make money:
This is free news broadcast provided over the main channels such as ABC, CBS, and NBC. These TV stations usually make their signals available to individuals who have TVs and can catch the signal.
Access to broadcast news stations is free. In other words, users don’t need to pay any subscription fee.
How do broadcast news stations generate revenue? They make their money by selling advertising space to interested companies. In other words, companies pay a certain amount of money to the broadcast news station to air their ads and commercials.
The money these news stations make goes into bill payment and probably, for expansion and other things.
How cable news channels make money:
Unlike broadcast news, users have to pay a subscription fee to access cable news channels.
The subscription amount for cable news channels varies from one channel to another. It is also for a specific period. And once your subscription package ends, you’ll be unable to access their content until you subscribe.
So, cable news stations generate revenue from subscription fees users pay. They don’t offer content for free. Examples of cable news channels include Fox News, CNN, and ESPN.
Broadcast new channels are free. But not everyone is able to receive their signals or fancies them. Thus, the alternative for people in this category is cable distribution companies.
Examples of cable distribution companies include Spectrum, Direct TV, Dish Network, Hulu, Netflix, etc. These companies run their cables to the houses of interested users. And once you start gaining access to content, you have to keep paying a subscription fee to sustain access.
The cable distribution company changed the broadcasting entirely. They brought a wide array of content producers, such as CNN, Fox News, Discovery, etc.
However, each news station or channel has a special agreement with the distribution company. The contract usually entails how revenue generated from advertising and subscription fees are shared.
Distribution companies understand that businesses are more than willing to break the bank for TV shows or channels with large viewing. So, any individual news channel that attracts a higher audience would receive a higher portion of the revenue generated via subscription fees and ads sales.
That said, cable news channels such as Fox News, CNN, and ESPN make money from ads sales and subscription fees.
A Handy Tip: Both broadcast news channels and cable news channels explore other ways to boost revenue. With people now spending more time online, the focus is shifting. These channels now generate revenue by selling advertising space on social media accounts, official websites, and video streaming sites, such as YouTube.
How Can You Kick-Start A News Station?
Starting a news channel may seem like the worst business idea to most people. Why? It looks complicated and capital intensive. It also seems businesses like news stations are reserved for the rich and influential figures in society.
On the surface, the claim about news stations being a complicated business seems true. But if you conduct your research keenly, you’ll discover how easy starting a news channel can be.
Don’t get it twisted. This business comes with several challenges, but then, there’s no business without a challenge. Nevertheless, if you’re determined, you’ll surmount any obstacles that come your way.
Furthermore, anyone can start a news channel. Just make the right moves. And keep in mind that embarking on this project can prove beneficial if you’re hoping to pursue a career in the media or understand firsthand what it feels like to own a news channel.
Here are tips to help you kick-start a news station
Tip#1: Search for channels available for lease:
Most people don’t know the law requires cable operators to provide channels for lease. It is called leased access and applies to cable operators controlling over 36 channels.
This leased access is available to everyone. So, if you have an interesting program, and you wish to air it, take advantage of this lease. You’ll have to pay a subscription fee every month. And keep in mind that the bigger the company, the more you may have to pay.
A Handy Tip: Understand that cable distribution companies do not lease channels for x-rated content. The law forbids them from doing such. And the program you’re looking to air should also be worthwhile.
So, now that you have discovered you can lease a channel, contact your cable operator of choice to learn about their subscription fee.
Several factors determine the monthly subscription amount you’ll be paying. These include the length of time, cable system you’re the channel on, etc. You can contact your cable operator of choice to know more.
Tip#2: Gather your technical equipment:
Once you have negotiated with the cable operator and agreed on a monthly fee, start acquiring the technical equipment you need to broadcast your content.
It would also make sense to seek the opinion of the cable operator on what equipment they approve. If they request you purchase the highest quality and most expensive equipment, ask for a list of acceptable options.
However, keep in mind that cable operators don’t accept VHS recordings. Nevertheless, you can create live-streaming content for your proposed channel using video streaming equipment.
Tip#3: Get the word out:
Hurray, you have launched your channel and started doling out quality content. Another important aspect of your new channel you shouldn’t ignore is marketing.
You must let people know you have a brand new channel but consider using inexpensive marketing techniques. Go to local events to engage people. Use social media and other affordable methods to make your new channel well-known.
Tip#4: Seek revenue-generating opportunities:
You have to be extremely careful when seeking advertising opportunities on your new channel. Know what businesses to approach and the ones to steer clear of. Approaching companies your cable operator is already working with can affect your relationship with the company.
Conclusion
So, how do news stations make money? They make money via subscription fees (cable news channels), commercials, social media accounts, streaming services, and official websites.
The amount a news station makes depends on the audience size. News channels with a larger audience will generate higher revenue. The reason is that companies will be willing to pay more to have their commercials aired on the channel.
We also discussed how to start a news channel. You can read to get clues on the steps you need to take. You may also consider approaching the cable company to learn about their requirements firsthand.
