Commercial broadcasting is where a broadcasting company is privately owned, and they very often generate profit too. Commercial broadcasters main source of income is via adverts, examples of commercial broadcasters that advertise for income are ITV and Sky.
Another source of income commercial broadcasters get is from sponsorship deals. An example of a sponsorship deal is the ITV's X-Factor and Talk Talk. X-Factor show a small Talk Talk advert before their show, meanwhile Talk Talk give their own adverts and website an X-Factor theme letting people know that they are related to X-Factor via sponsorship. On a side note, when X-Factor is hosting an active series, Talk Talk usually hosts a competition in which the participant has to upload a 5 second singing video in order to appear in one of their adverts, directly linking the product and the show.
Because commercial broadcasters don't benefit from the same things public service broadcasters get like the TV licence funds, they have to rely on their own advertisement and sponsorship deals in order to keep functioning. So for every advert they show, and for every sponsorship deal they have, the commercial broadcasters gets paid by the other party for that, therefor that is exactly how a commercial broadcaster gains the funds to produce their content and profit.
You may also be wondering how much advertisement companies pay commercial broadcasters to advertise. This all depends on the time of day, year, region and the channel you are advertising on. For example, ITV1 would be a lot more expensive to advertise on compared to a channel like ITV4, and advertising in the afternoon would be a lot more expensive compared to advertising at four in the morning.
Commercial broadcasters not only gain their funding via advertisement, but they also gain funding via subscription fees too, and as we discussed earlier, also sponsorship deals.
So how do they gain money via subscriptions? Well, firstly, the viewers may have to pay the commercial broadcast in order to watch their content, this is what you call a subscription. And this is exactly one strategy a commercial broadcaster uses in order to gain the fundings to be able to produce content to the viewer.
An example of a subscription service is Sky. They are a veriaty of channels and you do have to pay extra for additional Sky channels. For example if you want to watch Sky Sports, you have to pay a little extra fee, same with Sky movies. This is how Sky make quite a huge percentage of their income which allows them to be able to gain profit and keep functioning as a company.
Sources- http://en.wikipedia.org/wiki/Commercial_broadcasting
- https://sales.talktalk.co.uk
- http://www.itvmedia.co.uk/tools/rates
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