Funding

Where does funding for the following come from?

Films get financed in many different ways. For example, they get funding from private sources such as pre-sales. Pre-sales are made before the film is generally made/ released or available to purchase. The reliance on pre-sales shows the film industries dependence on movie stars, directors and certain film genres. Certain films only have a very low number of production company's supporting them such as the first Harry Potter (Harry Potter and the Philosopher's Stone). This shows how popular films such as this always have a main production company supporting them and other small company's. Franchises such as this only need minimal production companies funding them as it was obvious to the producers this particular film would be a success as Harry Potter is a very popular children's series of books by J.K. Rowling. The production companies supporting this are Warner Bros, Heyday Films and 1492 Pictures. Also, there are very few production companies as Warner Bros will be responsible for most of the funding as it is a very large company and due to the amount of money they already they have, they can afford for the movie not to be a success in comparison to the smaller companies, which would be taking out loans to offer to the makers of the film as this will result in making profit if the film becomes a success which in this case it was and continued to make a further 7 movies for the Harry Potter franchise. Warner Bros also make money themselves from allowing people to view their movies in the Warner Bros cinema, which is a good way to make money as people will pay to see each of their films as soon as they go out and due to this being their own cinema, they can charge people however much they think is acceptable due to the amount of money they want to make on the films. This is also the same as the Marvel films which are part of a conglomerate as they are partially owned by the Disney company, which is one way the movies find the next films of a franchise as the Disney store can sell merchandise from the films. However, in comparison to Harry Potter, the most recent Marvel film (Avengers: Infinity War) only had one production company funding them, which was the Marvel Studios as the Marvel films made before this were such a success as this is what funded the next Marvel films. This is also how they are funding the final Avengers film (Captain Marvel) and because of this, the Marvel company will never sell the rights to Captain America, Iron Man, etc, as it is too profitable for the company although they may lend the character to someone such as a food company, which would possibly use the character in an advert. In comparison to this, certain films have many production companies supporting them as is it possible the film may not be a success. An example of this is the 1998 independent film 'My Name Is Joe'. This was a very cheap film to make which resulted in production companies not having to put as much money towards it. This was good for the production company's supporting this film as the film turned out to be quite a success of that year, which resulted in them making a rather big profit on the amount of money they gave to the film-makers. This particular film was supported by 13 small production company's as large companies such as Warner Bros wouldn't have thought the film would be a success. One of the main things funding is used towards is paying the cast as this will take up most of the revenue. Some cast members will get paid upfront, however, some cast members possibly more well known actors, will agree with the producer that they will get a certain percentage of the films profit after it has been released as this can be a amble due to if the film is actually successful or not. Much money is also raised through crowdfunding. This is the funding of a project by raising money from a large number of people who each contribute a relatively small amount of money each, usually via the internet. This is usually done by small independent films as it is unlikely for a large film company to contribute a large amount of money into such a small film as it is possible it might not be a hit with the public. Members find out about projects to contribute to through crowdfunding websites such as Kickstarter. Kickstarter is the worlds largest crowdfunding website. By the public contributing this way, the film makers could offer the contributor's a certain amount of profit from the movie if they consider contributing more money as this enables the company to produce the film quicker the more money that is donated. Companies are also able to get National Lottery grants from £500-£10,000 as this aims people to get actively involved in projects that could benefit them. All kinds of people have access to a lottery grant as long as it is clear they can pay it back within the time given. By the national lottery allowing people to do this, this enables companies to start off their own business. For example, small production companies can do this as they are just starting out and they believe they can make the money back to enable them to pay it. 

• TV programmes on commercial channels - Terrestrial

Terrestrial channels are channels you do not have to pay for when you get a television as these channels make the money from the government. The government then make this money from everybody having to pay TV license every year as this is constant funding due to 99% of households have a television. This is also a reassured funding as TV owners have to pay for this every year as long as they have a television.

• TV programmes on commercial channels - Satellite/ PPV and Cable

PPV (pay per view) can vary on how its money is made. For example, Netflix is pay per view as they need a way to keep the funding constantly going in order to keep it going. Some of the money comes from people having to pay to view the films/ series on it. The main primary source of revenue for Netflix is subscriptions, which is subscribers who pay to access content on Netflix and to get DVD's delivered to them and that is the main way the company makes money. Viewers three different subscriptions they can buy each month all of which have different monthly prices. 

• Basic - content can be streamed in standard definition.
• Standard - content can be streamed in high definition. 
• Premium - content can be viewed in ultra high definition.

This varies as this is a way for the company to make as much money as possible. This is also similar to Amazon as viewers pay a monthly subscription to watch particular films and series. Revenue for Amazon is generated through commissions and other charges from sellers. Through Amazon Prime, viewers can subscribe monthly to watch what they want but if they want access to all the films instead of just a small variety. By people paying monthly, this is a guaranteed way to always make money despite the fact people can cancel at any time. In order for companies such as Netflix to assure other companies will see the adds.

• Newspapers

Many newspapers require payment to purchase. However, there are certain newspapers people don't have to pay for to own. For example, Metro, CITY A.M, etc. This shows how newspapers main source for funding isn't from the people buying them because if this was the case, it must cost considerably more to make the newspapers. The main source for funding is from companies paying for adverts and it is often they get that much for this, that all that money covers the cost of making the newspapers and they can give them away for free. However, they have to reassure the companies paying for the adverts that they will be seen. For example, they will have to show the company where their adverts will be as they will not pay for a advert that will not be seen. Also, there are newspapers that require payment, which goes to show people are more willing to pay for these as they are so popular. This means the newspaper company will be making money from selling them and advertisement for other companies. Also, there are online newspapers which also get their money through advertisement but do not usually require payment as they are online. The money made from advertisement will cover all the costs as companies are more willing to pay more or these advertisements as everything is becoming available online which is much easier for many households as they don't have to leave the house. This also saves newspapers money as they do not have to pay for the making of each newspaper as the same one is available to everyone online and they will also not have to pay the costs for the location of making the newspapers as they could have an office or have people working from home editing the online newspaper for people to see. One of the key things some of the funding is used towards is the transportation of journalists especially if they have to be sent to another country to cover a specific story for the newspaper. 

• TV programmes on BBC

The BBC does not broadcast advertisement, but instead get funded from the television license fee, which TV viewers are required to pay annually. This includes viewers who watch real-time streams or catch up services of the BBC's channels online or via their mobile phone. The BBC are always certain they will get funding as people can not watch their TV without paying their television license fee. The government set the TV license to pay for the television programmes, radio, and online services of the BBC. Guaranteed income agreed with the government means they have to do certain things that the government wants. 

• Websites

The main income for websites is through the advertisements on their websites for other companies as companies will pay them either a monthly sum or yearly pay to feature the add for their website. Revenue isn't needed to make the website as it is often it is free to create your own website.