system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: How do game shows make money?
gpt
They make a lot more in advertising revenue than they pay out in prizes. Consider "Who Wants to Be a Millionaire?" In a 30 minute show there are probably about 3 competitors and time for about 14 30-second commercial spots. Each 30 second spot costs about $100,000, so that's $1.4 million right there without considering reruns or anything like that.

In terms of costs, the show does have to pay contestants the prizes, but it's not that much money compared to the advertising revenue. For instance, only 9 people won the million dollars in the original US version, which was one for three seasons. That's only $3 million per season in top prize money. Additionally, any money the show pays out it gets to count as a loss on its taxes. That's not huge, but it definitely saves them some money. In cases where the show gives out items instead of money, the items are often donated by the manufacturers to get some free exposure for their product.

Finally, game shows often don't have a huge special effects budget or anything like that because they're relatively low-tech. Wheel of Fortune, for instance, isn't going to have a $500,000 CGI scene in the middle of an episode.