ABSTRACT
Having explored the overall structure of the television industry and the basic parameters of the studio-network license relationship, people can fully understand the type of basic financial model that studios use to evaluate the financial prospects of a series. The studio assumes a modest allocation of costs for studio marketing expenses to support the show during its unsuccessful first season. International releasing expenses—which are driven largely by guild residuals—have grown almost in proportion to the improved international revenue. But the major economic driver here is domestic distribution revenues, which are estimated at between approximately $1.52 million and approximately $2.39 million per episode. In order to produce that series in the first place, the studio must have maintained significant overhead expenses in the form of offices and other facilities, executive salaries, and other day-to-day costs of doing business.
