Cost per episode

Definition

Cost per episode refers to the total production costs incurred for each individual episode of a television series. This financial metric is crucial in the program development process as it directly influences decisions regarding budgeting, potential advertising revenue, and overall profitability of a show during pilot season. Understanding cost per episode helps networks evaluate whether a show can attract sufficient viewership to justify its expenses.

5 Must Know Facts For Your Next Test

1. Cost per episode can vary significantly depending on factors like cast salaries, location, special effects, and overall production quality.
2. Networks often use cost per episode to determine how many episodes to order after pilot season based on projected viewership and advertising revenue.
3. Higher cost per episode shows typically require larger audiences to break even or generate profit compared to lower-cost productions.
4. During pilot season, the estimated cost per episode influences decisions about which shows get picked up for full seasons, impacting network programming schedules.
5. Cost per episode analysis helps networks prioritize projects that align with their financial goals and audience expectations.

Review Questions

• How does cost per episode affect decisions made during the program development process?
  • Cost per episode plays a critical role in shaping decisions during the program development process by helping networks assess the financial viability of a show. When determining whether to greenlight a pilot or order more episodes, networks consider projected viewership and how those numbers relate to production costs. A higher cost per episode might necessitate a larger audience to ensure profitability, influencing which shows are ultimately developed and aired.
• Discuss the relationship between cost per episode and advertising revenue in the context of pilot season.
  • The relationship between cost per episode and advertising revenue is significant during pilot season because networks must evaluate if potential ad sales can cover production costs. A show with high production values may have a higher cost per episode but could also attract more viewers and therefore more advertisers willing to pay for commercial slots. This balance helps networks decide which pilots to pick up based on their estimated return on investment from advertising sales.
• Evaluate how understanding cost per episode impacts strategic decisions made by network executives regarding new shows during pilot season.
  • Understanding cost per episode is essential for network executives as it informs strategic decisions about which new shows to invest in during pilot season. By analyzing projected costs alongside anticipated audience engagement, executives can identify shows with the best potential for financial success. This evaluation can lead to prioritizing projects that fit within budget constraints while still promising high viewer ratings, ultimately shaping the network's programming strategy for the upcoming season.

Related terms

Pilot Episode: A pilot episode is a standalone episode of a television series that serves as a prototype to sell the show to networks and gauge audience interest.

Budgeting: Budgeting involves planning the financial resources needed for the production of a television series, including salaries, sets, and special effects.

Advertising Revenue: Advertising revenue is the income generated from selling advertising slots during commercial breaks in a television program, which is essential for covering production costs.