Ah, the fall TV Season.  Premieres for new and returning shows, plenty of online chatter and excitement, TV ad revenue charts…  Wait, what?  Yes, for you number junkies out there, this is when the value of each TV show is measured by the rates it can charge for advertisements that will appear during its time slot. It's a gauge of the popularity, economic power and potential longevity of each show.

I’m sure you all are wondering what this has to do with Supernatural.  Back in 2009 and 2011, I explained Supernatural's financial health by the numbers (the numbers that were known anyway).  The accounting was pretty straight forward back then. In recent years, however, accounting for TV has taken a drastic right turn. This time, tracing the revenue has turned into a full fledged research project and the picture is still pretty murky. The issue is still vital to Supernatural's continued success, however. With the new measurements and with the show hitting the ten year mark, do advertisers still think Supernatural is worth their attention, and money? We all know how much fans love the show, but it can't survive without advertisements so what do the numbers say about Supernatural's status compared to other shows? Does it have enough power in the marketplace to go the distance?

The Upfront Dollars

Just like all other TV shows, Supernatural makes money for it's network with ads.  Recently Ad Age came out with it's annual report of what every broadcast show is making for a 30 second advertisement. The report is based on a survey of the 'upfront (early) commitments' of six major ad agencies.  As a bonus, this year Variety did their own survey and published their results.  They too surveyed six agencies, although their figures are slightly different, meaning they polled different agencies.  

Why are these figures important?  Despite extra revenue coming from sources like online streaming deals, DVD sales, international syndication, and second run syndication, those streams usually only benefit the companies that produce the shows. TV ads are where the broadcast networks still make most of their money, while cable networks benefit from the dual income of ad revenue and subscription revenue.  The amounts on these lists only show the upfront commitments.  Usually networks only sell about 75 to 80 percent of their ad capacity during the upfront process.  Any advertising that is not sold upfront goes to the scatter market, aka companies who want to buy ads closer to air time.  Ads sold in the scatter market usually get a higher price, but what’s here doesn’t reflect that other potential revenue. 

In the past, the idea was better the ad revenue, the more favorable your show is to the network.  This means your show is likely going to get more promotion, a lucrative timeslot, and chances of survival to next season are much better too.  Granted it wasn't a guarantee, but it helped.  In the days of TV 2.0 though, there are many other factors now that must be considered.   

After the networks' upfront presentations in May, networks spent the next several months convincing advertisers to commit to buying ads for the various shows in their fall and winter lineups*.  Due to lower live viewing, overall upfront ad revenues for broadcast networks declined to $8.05 billion - $8.69 billion overall.  In 2014, it was $8.17 billion to $8.94 billion. That a decrease across all shows.

The numbers this year were very interesting. One thing that that Ad Age and Variety lists have in common is that the NFL is the biggest winner.  That is nothing new compared to previous years.  Sunday Night Football averages $603,000 per a 30 second spot! ($637,330 on Variety’s list).  Since football is in its own stratosphere, I’d rather focus on scripted broadcast programming. 

The most highly rated, number one show this year, a show that just happens to air at the same time as Supernatural, is Empire.  They command a whopping $497,364 per 30 seconds according to Ad Age, and even more according to Variety at $521,794.  Other top performers for that network: The Big Bang Theory, How to Get Away With Murder, The Voice, Modern Family, and Scandal.  There is one highly anticipated new show on the list at number ten, NBC’s Blindspot, which incidentally is a Warner Brothers show for those keeping score at home.    

Out of the current shows, the two I would say are in trouble are Fox’s Sleepy Hollow and NBC’s The BlacklistSleepy Hollow not only had a big crash in ratings (and quality), but the move to Thursday at 9pm, a traditionally under performing slot for Fox, hasn’t helped at all.  Their rate has gone down to $98,253 from $202,500.  Thursdays hasn’t done much for The Blacklist either, although their decline to $193,793 from $282,975 is more respectable. 

The CW Numbers

Overall, The CW finished their upfront season up 12 to 15 percent while all other networks saw declines.  They also picked up 30 new advertisers.  The CW is coming off its best season ever, thanks to a big hit show known as The Flash.  The show not only ended up being the number one CW show last season, but the highest rated show the CW has ever had.  That commanded a huge premium ad wise, especially when the show has had a ton of buzz in the off season.  The Flash is up a whopping 39 percent, from $50,775 to $70,687 ($68,501 per Variety).  Arrow seems to be holding up very well, too, with a slight 2% increase from $47,040 to $48,056 ($53,285 per Variety), which matches the slight ratings increase the show had from season two to season three.  Also, likely because of their move to a more prominent spot with The Vampire Diaries on Thursdays, The Originals increased by 2% from $32,140 to $32,634 ($31,492 per Variety), despite the fact that their ratings heavily declined after their move to Mondays last season. 

The news isn’t as good for aging CW shows though.  Supernatural is down 12% to $35,631 per 30 second spot, while last year they got $40,440 per 30 second spot (Variety estimates $38,293).  The reason for the decline is self explanatory, Supernatural’s ratings declined from season 9 to season 10.  The biggest CW decliner by far though is The Vampire Diaries, which had a huge drop in ratings this past season.  Their ad revenues are down 25%, from $59,620 to $44,924.  America’s Next Top Model dropped heavily as well, 29 percent, going from $23,900 to $17,082 ($17,267 per Variety). 

Supernatural By The Numbers

I’m sure you’re wondering what this drop in ad power means for Supernatural. Should Supernatural be concerned about a revenue decline?  Not really.  When a show gets as old as Supernatural, just making episodes is pure money, especially when over 200 episodes are in the archive.  How much revenue does Supernatural pull in?  Pinpointing exact figures is impossible since parent company Time Warner doesn’t report on financial figures by TV show, but there’s enough info out there to get somewhat of a picture. 

Warner Brothers Television, owner of Supernatural and The CW, and a division of Time Warner, earns revenues four ways according to the 2014 Time Warner Annual Report:

-          Distribution of television programming in the US for initial airing.

-          Distribution of television programming after initial airing in the US to basic cable networks, local television stations, and SVOD (Streaming Video on Demand) platforms.

-          International license rights to Foreign TV networks, premium and basic television services, SVOD and other digital services.

-          Sale of television programming on digital formats (aka iTunes and Amazon VOD) and physical discs (aka Blu-Ray and DVD).  

Supernatural is not only still in initial broadcasting mode on The CW, but because of their number of episodes they are available for second run syndication (after initial airing) as well.  Combine that with the large international distribution and it being a popular seller of DVDs and iTunes, Supernatural brings in revenue from all four areas for Warner Brothers. 

Supernatural is not a money maker for The CW. (These numbers won't take long...) It cost approximately $4 million per episode to make in season ten (it was half that in earlier seasons).  The CW pays approximately half of that (could be more, half is a safe estimate) in license fees (to Warner Bros).  Doing the math, commercials take up around 15 minutes in a 1 hour time frame (shows on The CW are traditionally shorter than other broadcast networks).  That’s 30 potential 30 second commercials, but often times that involves some ad time for the local affiliates and network promos for other shows.  So let’s say that the CW uses half of those slots.  $35,631 X 15 = $534,465.  Granted it’s more than this, since The CW only sold about 80 percent of its inventory and the other 20 percent is being sold on the scatter market.  For upfront money though, let’s go with a nice round number of $550,000 per first run episode.   That means that “Supernatural” only earns its network in ads $12,650,000 in upfront commitments for the season.  When the license fee is in the $45 to $50 million range, that’s a hefty difference.

The CW also earns ad revenue for online viewing on CWTV.com.  It is estimated that 30 to 40 percent of viewing of CW shows is done online, so those ads are growing increasingly important as well.  Often times The CW will sell as part of an advertising package ads for online viewing as well as what airs on live TV.  There is also a risk that The CW will have to issue a credit to advertisers if a show does not live up to it's projected ratings.  It is not well known though how much online viewing and DVR over 3 days counts in those ratings.  

For Warner Brothers, their job is to recover the $90 to $95 million in costs it takes to make Supernatural in a season.  Considering they recover a chunk of that from The CW in license fees (a network they have ownership stake in so essentially they are paying themselves), the rest has to be found from the other streams.  A show this age typically makes around $500,000 to $700,000 in second run syndication.  The Netflix deal is rumored to be in the $700,000 range.  Multiply that times 218.  Yes, that is roughly $150 million for the full catalog…so far.  That is what they get from Netflix.  That deal in 2011 was originally a 4 year deal and is up for negotiation again this year.  The CW will be handling re-negotiations of all their shows this year and it’s unknown at this time if they’ll be able to maintain the fees of the original deal or even get more since CW shows have been very popular on Netflix.  But $150 million for 4 years is not a bad deal at all. 

Supernatural is also in a successful second run syndication deal with TNT.  The exact dollar figure per episode is not known, but it can be safe to say that each syndication cycle (that timeline is also unknown) will easily bring in $100 to $150 million.  There are also deals with Hulu, Xfinity, and other SVOD services where dollar figures have not been disclosed. 

International distribution gets really interesting.  In 2014, fifty percent of Warner Brothers' revenue was earned from outside the US.  Warner Brothers produces and distributes over 60 shows and often sells their inventory internationally in bundles.  It’s hard to determine what cut of those revenues go to each individual show (a contention point for creative talent trying to make residuals), but safe to say Supernatural is in just about every major market.  Considering Warner Brothers distributes to 175 countries, that is a wide open potential market!  This distribution also includes the numerous SVOD services that are expanding internationally.  Time shifted viewing is becoming more of a thing in other countries too.  The assumption is that whatever Supernatural pulls in revenue in the US, it is easily doubled when international revenues are factored!

As for DVD sales, back in 2009 it was known that Supernatural had sold nearly 2 million DVDs in the first four seasons.  Based on estimated sales since then (getting confirmation of exact sales numbers is the equivalent of trying to get the nuclear launch codes), that number is now in the 6 million plus range.  Estimated revenue overall for Supernatural DVDs, $150 million and counting (season ten has not been factored into this). 

Sales on iTunes and Amazon VOD is a complete unknown.  The studios usually get about 70 to 80 percent of the cost of the episode.  So if an episode is $1.99, Warner Brothers gets approx. $1.50 of that.  Multiply that times 100,000 (which could be generous considering the free viewing one can get from CWTV, Hulu, and Netflix), and we’re looking at $150,000 per episode.  A small piece of the pie, but more for the pie nonetheless. 

Remember though, that’s not all pure profit for the studio.  Costs like residuals bite into it.  A lead actor gets 2% residuals from the syndication deals, so Jared and Jensen knock off at least 4% of the syndication money.  Misha, Mark, and any other actor that has been on the show also get their little piece for the episodes in which they appear, as well as all producers and directors.  There’s also promotional costs as well.  All that hub-bub at Comic Con ain’t free! Still, even with these costs, the profit margin is rather healthy. 

Another thing that greatly helps Supernatural is the rule that if the network a TV show is airing owns the show, or at least if a company under the corporate parent of the network owns the show, then that is considered an inside show and more profitable.  That’s a double win for the corporate parent because they get the ad revenue and the distribution revenue.  Supernatural is owned by Warner Brothers, who is 50 percent owner of The CW.  Warner Brothers is owned by Time Warner.  Supernatural airs in syndication on TNT, which is owned by Turner Broadcasting, which is owned by Time Warner.  TNT, earning ad and subscription revenue for airing Supernatural reruns, is paying money to Warner Brothers, who is earning money for the show other ways, not to mention getting ad and license revenue from The CW, which they own 50 percent.  All sides of the transaction go up to Time Warner’s bottom line.  Oh yes, it’s a crafty little business, isn’t it?  It’s also why your favorite show may not have made the fall lineup and/or gotten a full season order because they weren’t owned by their network (still bitter about Person of Interest). 

You’ll never see the exact numbers for Supernatural on a balance sheet or income statement BTW.  Financials for TV shows are a best kept secret by the studios, who usually lump all revenue and costs together.  It is a well known fact in the industry that TV is the true money maker for studios, not films.  But just like films, the industry loves to hide the true profit.  It’s good for business. 

The Social Media Factor

j2tweeting

While money is the bottom line, there’s something else at stake now, something equally as important as ad revenue.  Even though Supernatural is a cash cow, it doesn’t come close to making Friends or even The Big Bang Theory money.  The most important role Supernatural plays at this time is standing out among the crowd, something that’s getting near impossible these days.  The landscape is very different since 2011.  The biggest change is there is too much TV content out there.  There are close to 400 scripted shows alone in 2015.  It’s too much for people to consume.  According to an article in Broadcasting and Cable , TiVo found that of its subscribers, they recorded on average 85 hours of programming.  After 42 days 33% remained unwatched.

So how do networks get people to watch their shows in a timely manner and get them to keep watching every week?  Enter Social Media.  There is no money in Social Media.  What it does is offer a cheap and effective promotional tool that reaches the exact audience to whom networks want to sell their product.  With so many shows, PR departments need to go out and find the niche market, aka the viewers that not only watch a particular show, but will obsess about it online and create a lot of buzz.  These days, a network just can’t put a show out and advertise it.  They have to go to Social Media platforms, engage fans and get them fired up about what is coming.  The goal is same day viewing, or just viewing that doesn’t involve festering on the DVR for months.   This can be DVR, mobile, online, or anywhere the show can be seen.   It’s become a huge effort on the part of publicists, so much so that actors and producers of the shows must get involved as well to boost engagement.

Social Media is exactly the reason that Supernatural is a very crucial brand for The CW and Warner Brothers.  It takes a lot to get a viewer’s attention, especially with new shows.  For long running shows like Supernatural that already come with a fiercely loyal and dedicated fanbase, that is a brand that builds a legacy of an entire network.  Bottom line, it keeps that network in business.  It keeps the show going to the point where it can become a well known brand that brings in recognition (and money) long after the show ends.  For Supernatural, a cult brand like it will go on years after the show has ended. 

In many cases ratings are becoming secondary.  Shows and networks can survive on fewer viewers now, but they need to be visible.  Cable networks that have gone into original programming are finding out the hard way that having just one successful show isn’t enough.  According to Broadcasting and Cable, a cable network (or a small net like The CW) needs 4 to 6 popular shows to be successful.  Since budgets are tight, proper marketing is crucial.  Social media popularity means just as much to the brand. 

When looking at The CW, it’s taken them ten years and near extinction to get to this point.  Considering the amount of effort they’ve had to put into “Arrow,” “The Flash,” “The Vampire Diaries,” “Supernatural,”  not to mention numerous other shows for recognition, it does help when at least one of those shows comes into the mix from the beginning with super loyal and engaged fans (it also helps that they have a range of shows that caters to males and females now).  Getting Supernatural fans online to generate excitement and chatter for their show has been a dream come true for The CW.  It is a perfect model for the new way of branding and marketing television. 

Bottom line, TV has become one convoluted business in the last few years.  So if you’re clinging to ad revenue charts and ratings to determine if your show is successful or not, then you must work for Nielsen :).  All kidding aside, Supernatural’s health in business terms just keeps getting better and better, and in ways never imagined when the show started back in 2006.  That’s really the only thing you need to know from all this…

Supernatural doesn't have to make money for the CW.   Supernatural survives because:
 
- it's is a huge part of CW's brand and image, and  
- it makes a LOT of money for Warner Brothers, and it will for years to come.

It’s all good. 

* Northern hemisphere seasons, where Supernatural is based.
Sources:

TV Ad Pricing Chart:  http://adage.com/article/media/ad-pricing-chart-sunday-night-football-empire-broadcasts-most-expensive-ad-buys/300516/

TV Ad Prices: http://variety.com/2015/tv/news/tv-advertising-prices-football-empire-walking-dead-big-bang-theory-1201603800/

Upfront 2015:  Why Didn't TV Tune in More Ad Dollars:  http://variety.com/2015/tv/news/tv-upfront-advertising-2015-1201573711/

Supernatural by the Numbers: http://www.thewinchesterfamilybusiness.com/articles/article-archives/general/2234-supernatural-by-the-numbers

Supernatural by the Numbers, Part Deux: http://www.thewinchesterfamilybusiness.com/articles/article-archives/general/16654-supernatural-by-the-numbers-part-deux

CW Wraps Its 2015-2016 Upfront Business: http://adage.com/article/special-report-tv-upfront/cw-puts-a-bow/299253/

All this TV:  Too Much of a Good Thing?:  http://www.broadcastingcable.com/news/programming/all-tv-too-much-good-thing/142488

National TV Ad Revenues Down 2.7%: - http://www.broadcastingcable.com/blog/currency/summing-it-national-tv-ad-revenues-down-27/143191

Time Warner Annual Report 2014:  http://www.timewarner.com/sites/timewarner.com/files/ckeditor/public/files/TWX_2014_Annual_Report.PDF

Here's Exactly Why TV Has Gotten So Annoying:  http://time.com/96303/tv-commercials-increasing/

Comments  

cheryl42
# cheryl42 2015-10-03 10:47
So.... good news???
YellowEyedSam
# YellowEyedSam 2015-10-03 11:53
Quote:
It cost approximately $4 million per episode to make in season ten
Wow. That's nearly 3 million quid to me. I had no idea it cost so much! O_O Shame some of that was wasted on Bloodlines..
AlyCat22
# AlyCat22 2015-10-03 12:01
So YellowEyedSam. Question... Are you gonna change your Avator now to BlackVeinySam or more closer, BlackVeinyNeckedSam?

;)
YellowEyedSam
# YellowEyedSam 2015-10-03 18:20
I.. can't! My name is YellowEyedSam D: But maybe I will for a short time, who knows? We'll just have to see if there's a captivating still ;)

I love the name "BlackVeinyNeck edSam" though! Made me laugh :D
Mallena
# Mallena 2015-10-03 13:27
Dear Alice,
You are so smart and my favorite writer of anything SPN. The business of show business has always interested me. The future of broadcast TV and commercials is murky at best. Since getting a DVR several years ago, I have not watched a show live since. I record everything and then fast forward through every commercial unless it involves children or animals. (Loved you E-Trade baby!) I gladly pay extra to get Netflix or Amazon Prime, HBO, anything to get no commercials. Cable channels like Syfy and FX are now airing a commercial every 10 minutes and it makes it hard to follow the narrative of the story. There has to be a better way, right?? Money is still being made by all, obviously, which is good if our show stays on the air. Some fans say Jared and Jensen should quit TV and make movies. Maybe, but remember what happened when David Duchovny left the X-Files to make a movie? The quality of the X-Files tanked and so did David's movie. Why would J and J leave a sure thing with lots of money involved for a risk? I'd love to see what else they can do, but I am so grateful they stuck with our show whatever their personal reasons. Keep the great articles coming, Alice, especially anything having to do with Sam's hair. Thud, floor, Me.
cheryl42
# cheryl42 2015-10-03 14:07
Quote:
especially anything having to do with Sam's hair
:D :D :D I hear you girl...

Jared yesterday
Alice
# Alice 2015-10-03 16:59
I do confess, I have been tossing around how to approach the next hair article. I was going to do just season ten, but then I thought, why not do a ten year edition? A retrospective of great and not so great moments in hair for ten seasons. The problem is, an article like that requires a ton of research! I'll do it though if I must. I'm that dedicated. :) Hopefully it'll be together by the next Hellatus.
cheryl42
# cheryl42 2015-10-03 17:19
In other words...if I absolutely have to look at gorgeous pictures of Sam I'll do it. But only because you are dedicated to us your fans. I'll buy that. :)
YellowEyedSam
# YellowEyedSam 2015-10-03 18:27
I fully support an article on hair.

...what xD
YellowEyedSam
# YellowEyedSam 2015-10-03 18:26
I'd be greatly saddened if the J's went to movie's. As a fan you'd feel less close because the more famous they are the more it'd cost to meet them, less chance of meeting them, and so on. I've never met the J's but I feel appreciated because I'm part of a fanbase they have a lot to do with. You'd have a drastically reduced chance of them reading your fan letters likely too. I'm not wording this right but I hope you understand my meaning?
Mallena
# Mallena 2015-10-04 02:11
I think a lot of people get very involved with their favorite TV shows and actors and it is rough when an actor leaves a show because they want to do other projects. I'm still mourning Matt Smith leaving Doctor Who and Dan Stevens leaving Downton Abbey. Bravo to Jared and Jensen for staying loyal to their little show that could.
LEAH
# LEAH 2015-10-03 19:39
Mallena, I agree with you about them making movies. It is one of my pet peeves. It makes me cringe every time someone says that because they have issues of one kind or another with the show. First of all what they choose to do with their career is no ones business. Second they have stated over and over through the years how much they enjoy doing the show. How much they appreciate what they have. How much they love the people they work with. How many people can say that about their jobs? Third it's no guarantee that making movies is an option for them. There are so many examples through the years of people jumping ship from a series to make movies and then fade away into obscurity. Not saying these guys would but the odds are not in their favor. Jared and Jensen are smart, appreciative and savvy. I think they will have many opportunities for the future. In TV, maybe movies, maybe something else. But they know they have a good thing going right now.
suzee51
# suzee51 2015-10-06 00:50
Mallena said: "Some fans say Jared and Jensen should quit TV and make movies." I have heard comments from many of these fans as well, Mallena. However may I refer to what Jensen himself has said about this idea? Recently an interviewer asked Jensen if he was sorry that he was unable to accept movie offers due to his commitment to Supernatural. He didn't hesitate to say no. His reasoning was based on these three priorities: #1) As an actor, his first priority is to be working. SPN provides him with a constant job. There are no "will I get the part" worries. #2) Jensen REALLY loves the people he works with every day. This includes the entire production crew and not just his fellow actors. It is obvious that J2 have fun while filming. And it is no small thing to work with your best friend every day! #3) Jensen still enjoys portraying Dean Winchester. He said that if he grows bored with Dean, that would be a problem but for right now, he feels he is still "peeling back the layers on that onion".

Personally, I was THRILLED to hear that Jensen is still committed to making SPN. It dawned on me that if Jensen leaves SPN, as fans we would no longer have any "contact" with him. No more daily photos, interviews, con videos - basically I would no longer have any conduit to keeping up with what is going on with him. Oh sure, we might be able to see him two or three times a year when he made a movie. If we were very lucky, perhaps he would get picked up for another TV show. But this whole SPN machine? The social media buzz, the blogs, websites and FB pages devoted to all things SPN - - all of the ways that I can get my daily "fix" of Supernatural and Jensen Ackles? That would disappear. I would completely lose touch and no longer be privileged to be able to keep current with Jensen.

I don't know about you, Mallena, but that would be devastating for me. LONG LIVE SPN!
njspnfan
# njspnfan 2015-10-03 14:32
Great article, Alice. Always like these "nuts and bolts of how things work" articles.
sylvia37
# sylvia37 2015-10-03 16:03
Thanks Alice. I love reading your by the numbers articles and I know the amount of research itv takes must be daunting . good to know the show is a money maker for them. I guess it really is up to J and J when it will end.
Jen
# Jen 2015-10-03 23:24
Never tried to read one of these articles before, they are very interesting and you made it as clear as possible I appreciate all the work that goes into all your articles and this web site, I too will never get the chance to meet the J's and agree the fan base does help you feel connected to the Boys and SPN. I also didn't relize it cost sooooooo much to make a episode WOW.
Both Jensen & Jarred our talented we all know that both have succeeded in Movies early on in their careers, but now after 10 - 11 yrs with SPN would they be able to get a movie roll, are they now type cast/ as they say. I love my boys and wish them the best in whatever their future holds. Whether they move on tomorrow or 10 yrs from now I know one thing for sure. I will be needing therapy with a great psychologist because my withdrawal symptons from the Boys their show and this wonderful fan base just might do me in.

I second the notion for a article on Sam's hair over the last 10 yrs -- swoooon
Yelloweyes I might try and pinch that avitar idea LOL
Loretta Martin
# Loretta Martin 2015-10-04 19:01
I'm so happy for J2. I'm in it for life. When the show ends I'll still watch the reruns, buy all the DVD's and merchandise. I hope the cast still does a few conventions every year, I will go to them 10 years from now. lol I care about J2 and the other cast to want to see them in person and see how they are doing through the years.
Ann
# Ann 2015-10-05 11:39
Wow, this is sooooooo fascinating! Thanks for the research.
Denise Baker
# Denise Baker 2015-10-16 18:32
Wow, this really helped me get my head around how they can keep this show on the air. Not that I'm complaining - I love it!!!
:)