I've always wondered how online TV channels, either hosted on YouTube or on a website, guarantee return on investment, especially if the production budget is $20,000 and above

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    How do you think regular TV channels generate revenue? – F1Krazy Jun 1 at 11:24

The most common method is advertisements. Advertisers pay the channel for the privilege of having their products promoted in a place where consumers will see it. (My source is me, btw - I used to work in ad tech until recently.)

This can be done in the form of in-stream ads that interrupt the main video for a few seconds (which is also what broadcast TV does during their "regularly scheduled programming."). Or it could be a banner that appears at the bottom of the video for a few seconds without interrupting the stream, and so on.

On a digital platform, these sorts of ads also carry the added bonus that they can collect information about you for retargeting purposes elsewhere. General location, content preferences (ie: you're watching THIS video so you may also like THAT video,) information about the device you're watching on, etc. This only affects the content creator's ROI in the sense that advertisers will pay more if they know they're getting retargeting data on top of promoting their products.

Finally, there's actual sponsorship money and product placement - at the end of the video when the content creator says "remember to like and follow and CHECK OUT THESE OTHER THINGS". It's of course possible that the creator really likes those things personally, but it's also very possible (even likely) that he was paid by the owners of those products to suggest his followers check them out. (Increasing the number of likes and followers also improves his marketability to advertisers, as it shows how big of an audience advertisers stand to reach.)

Product placement can also happen in the middle of a video, too. Have you ever been watching some kind of talk show and noticed that the host is drinking out of a mug with a particular logo on it? Have you also noticed how that logo is always conveniently facing towards the camera, even when camera angles change? This is not an accident.

All this is assuming you're not on a subscription service, of course. In that case, it shouldn't be a surprise where the ROI comes from (and they may use advertisements on top of your membership fees anyway.)

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    @BlessingPatrice-AL'OM I am assuming you've done the market research, found the right target audience and that you've approached the potential sponsors - you know, the ABC of the production of any new commercial TV/online show? Otherwise, I'm afraid it sounds bit like a guy employed as a senior IT developer quietly asking online "What is database". – Yasskier Jun 2 at 3:04
  • "Ads, Product placements, sponsorship etc, come when content is available right?" If by "content is available", you mean "enough of the script has been written/filmed to demonstrate that your project is actually going ahead", then yes. If you mean "the first episode has been broadcast", then no. It's far, far too late by that point. You need them on board well before that point, so that their sponsorships/ads/product placements etc. can be included within that episode and all subsequent episodes. – F1Krazy Jun 2 at 9:16
  • @BlessingPatrice-AL'OM That sounds like an entirely different question from the one you asked above. My experience is on the technical side (ie: how it works once it's set up) and this second question is more on the business / sales side (ie: how to set it up.) If you don't know how to project these numbers yourself and you're already in media res on the project (sorry, couldn't help myself) then I would recommend hiring someone who does know. This doesn't sound like the sort of problem you can solve with Google. – Steve-O Jun 2 at 13:40
  • Thank you everyone for your answers! – Blessing Patrice-AL'OM Jun 2 at 22:35

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