I’ve never understood it. Is it based off of viewership? If so how does that work? I’m not paying a fee to watch individual episodes. Does it comes from Advertisements? If so, why would it matter how many people watch the show?
In: Economics
Advertising and licensing.
Companies pay money to have their commercials aired with that money going towards the cost of producing the show. Producers can charge higher costs to advertise during popular shows with lots of viewers, providing a large incentive to make a hit show and replace unpopular ones.
From there, the producers can license the content to be sold/streamed elsewhere. Netflix, Hulu, Amazon, etc. all have to pay the producers for the right to stream their shows.
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