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
From commercials.
This is why ratings are tracked. If you can claim “30% of American households watch our show every Tuesday” and back that with viewership data, then you can command a pretty penny from advertisers. A 30 second commercial during The Big Bang Theory will command a lot more than a 30 second commercial at 2AM during a re-run of some Steven Segal direct-to-video movie. (interestingly that’s how he still makes money)
There might be some kickback or fee pass-thru from cable providers to _some_ specialy studios like HBO, Showtime or Turner Classic Movies, but generally its commercials.
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