Understanding the Cost of Broadcasting Classic Movies

The cost for a television network to broadcast a classic movie can vary widely based on several factors, including licensing fees, duration of rights, network type, and negotiation factors. Additionally, advertising revenue plays a crucial role in determining the willingness of a network to spend on broadcasting rights.

Licensing Fees

Licensing fees are a significant component of the cost when broadcasting classic movies. These fees can range from a few thousand to several hundred thousand dollars, depending on the film's popularity and the terms of the deal. Networks must pay these fees to the rights holders, who are typically the original producers or distributors of the film.

Duration of Rights

The cost can also vary based on the duration of the rights acquisition. Networks can buy the rights for a one-time screening, a limited run, or multiple airings over a certain period. The duration of the rights can significantly impact the cost, as networks often negotiate better terms for longer rights.

Network Type

The type of network, such as premium cable channels, basic cable, or local stations, also influences the cost. Premium cable channels tend to pay more for exclusive rights compared to basic cable or local stations. This is because premium channels often ride on the popularity of these classic movies to attract niche audiences.

Negotiation Factors

A key factor in determining the final cost is the negotiation between the network and the rights holder. The terms of the deal, including the duration, exclusivity, and other conditions, can significantly influence the final cost.

Advertising Revenue and Network Strategy

Networks also consider potential advertising revenue when deciding how much to spend on broadcasting rights. A movie with a significant viewership can generate substantial advertising revenue, making it more attractive for networks to invest in the rights.

ITV Network’s Purchase of Classic Movie Rights

In the UK, the ITV network, which is a conglomerate of regional franchise broadcasters, recently made a significant purchase. In 1997, ITV purchased the Rank Organisation film and video library from The Rank Group for ￡65 million. This acquisition included 749 feature films, including the popular 'Carry-On' film series and many classic comedies, dramas, war, and action movies dating from the mid-1930s to the late 1980s.

This acquisition means that ITV can show these movies at a much lower broadcast charge compared to what other networks would have to pay. Additionally, ITV can sell short-term broadcast rights to rival networks for certain titles, generating additional revenue. However, there may be an internal cross-charging system within the ITV network for showing films from the Carlton Communications library, but these charges are likely to be insignificant compared to the advertising slot revenue.

In conclusion, while there is no fixed cost for broadcasting a classic movie, the range can vary from a few thousand dollars to over a million depending on licensing fees, duration of rights, network type, and negotiation factors. The purchase of classic movie rights by television networks like ITV can be both a cost-effective and profitable strategy.