are programming services that deliver packages of information or
entertainment by satellite to local cable television systems. The
cable systems then redistribute the network programs, through wires,
to individual residences in their local franchise areas. The number
of cable networks carried by any particular cable system varies,
and is based on the channel capacity of the system. Older cable
systems may have as few as twenty channels while newer ones may
have more than 150 channels. Cable system managers decide which
cable networks will be carried. Their decisions are based on analyses
of the requirements of their franchise agreement with the local
community they serve, on their own economic needs and abilities,
and on local audience needs and wishes. Cable networks can be divided
into three major types: basic, pay, and pay-per-view.
of channels on most cable systems are devoted to basic cable networks.
These are termed "basic" because the subscriber can obtain a large
number of them for a low price. There are over sixty basic networks
Arts and Entertainment
(A&E)--cultural fiction and non-fiction.
Television (BET)--talk shows, children's programs, game shows
and other fare particularly aimed at people of color.
Network (CNN)--24 hours a day of news and information.
and Business Channel (CNBC)--primarily business news.
comedies, stand-up comedians, comedy movies and similar fare.
Television--coverage of cases being tried in the courts.
of Congress and other political bodies and events.
Channel--documentaries and informational programming.
TV--programming by and about entertainment.
Channel (formerly CBN, the Christian Broadcasting Network)--wholesome
programming including reruns of older commercial TV series.
Network--demonstrations of products people can buy by calling
Channel--formal college credit courses and general education material.
Television--information and entertainment shows aimed primarily
videos and music-related material aimed at teenagers.
and family programming.
Television--TV programming from the past, particularly old commercial
home shopping service.
Net--music and other country related programming.
TV (TNT)--old movies and some original programming.
general Spanish language service.
general service that includes network reruns, children's programs,
and originally produced material.
music videos for people who are older than teenagers.
Channel--24 hours a day of weather information.
of USA Networks
Most basic cable
networks charge the cable systems for their service. The fee is
based on the number of subscribers the cable system has. A typical
basic network charges a cable system an amount between 3 and 25
cents per month per subscriber, depending on its popularity. ESPN,
for example, can charge more than Nostalgia Television.
must recoup their expenses, and potentially garner some profit,
by selling the cable TV service to consumer households. Most cable
systems offer a "basic service" as a package to their subscribers.
This includes all local origination and public access channels,
all local broadcast stations, and all basic networks for a cost
of about $15 a month. Some cable systems divide this basic package
into two or more "tiers." They offer local origination, public access,
local broadcast stations, and some of the public service and less
glamorous basic networks (C-SPAN, The Learning Channel) for a very
inexpensive price, about $5. The second, and more expensive, tier
may include MTV, ESPN, USA, A&E, and other more entertainment-oriented
Most basic networks
sell advertising. As a result they have two sources of income--cable
system subscriber fees and fees paid by advertisers. Cable advertising
rates are not as high as those for commercial networks such as NBC,
ABC, or CBS because audiences are not as large. Most cable networks
are delighted if they obtain a rating of 4, whereas commercial network
program ratings tend to be in the 11-15 range. One reason cable
network audiences are low is that many cable networks program for
relatively specific audiences--Lifetime to women, ESPN to sports
fans, Nickelodeon to children. These and other program suppliers
were created specifically as cable television entities.
however, such as WTBS from Atlanta, WOR from Chicago, and WGN from
New York, are a special type of basic service. They are not really
networks. Rather they are local television stations that have been
placed on the satellite for national distribution. The stations
themselves do not earn direct money from becoming a superstation.
They are placed on the satellite by other companies such as United
Video. These companies collect the fees from the cable systems.
The superstations make additional money because they can set advertising
rates based on a national rather than local audience.
Among the more
than 60 basic networks, there is considerable variation in operating
procedure. C-SPAN, which features the proceedings of the House and
Senate, is non-commercial. All revenue comes from money paid to
it by the cable systems. The home shopping networks, which make
their money because viewers call in and buy the products shown,
are usually provided to cable systems free of charge. As an initial
enticement to try its material, networks sometimes pay systems to
carry their programming. If the system later decides to carry the
network on a regular basis it must start paying the networks.
to "moving picture" networks, other services are offered to cable
systems as part of the basic package. These include digital sound
services such as Home Music Store and electronic text services such
as news bulletins from Associated Press and Reuters.
Some basic channels
produce most of their own programming. ESPN, for example, provides
its own coverage of sporting events, and CNN produces its own newscasts.
The same applies to C-SPAN, Courtroom Television, The Weather Channel,
and the home shopping channels. Many networks, however, acquire
programming from other sources. Lifetime, The Family Channel, Nickelodeon
and others often contract with independent producers to develop
movies or series for them. Other channels obtain movies from the
major motion picture studios. A and E and Discovery buy some of
their programming from the British Broadcasting Corporation. Many
channels program old commercial network series. USA Network, for
example, has programmed Murder, She Wrote, and Lifetime has
used Cagney and Lacey. In a few instances cable networks
have picked up commercial series canceled by the major broadcast
networks (Paper Chase, The Days and Nights of Molly Dodd),
produced new episodes, and aired them as a series.
Pay cable networks,
such as HBO, The Movie Channel, Showtime, Cinemax, and The Disney
Channel, do not sell advertising. They derive all income from the
cable systems that carry them. The systems, in turn, charge consumers
subscription fees for each pay network, usually at a rate of $10
to $20 per month per pay service. In other words, the pay services
are on a more expensive tier than basic services. The systems and
the networks divide the consumer fee, usually about 50-50, but this
ratio is subject to negotiation. Consumers who do not subscribe
to the pay services receive scrambled signals on channels occupied
by those services. To justify their additional monthly fees, pay
channels must offer subscribers programming or services they can
not receive for free. Most of these channels present feature films.
The networks purchase rights from motion picture studios allowing
them to show feature films shortly after their theatrical runs and
prior to their availability to broadcast networks. They show the
films uncut and without commercial interruptions. To many viewers
this programming policy is worth the extra dollars they pay each
month. Some pay channels also offer commercial-free specials such
as sporting events, documentaries, miniseries, comedy specials,
musical concerts, and original movies created for the pay service.
Some of the channels, primarily HBO and Showtime, produce their
own television series. These programs usually contain language or
themes that commercial networks do not present to their larger,
general audiences. Some of these original programs are created by
network personnel, some by outside production companies.
Of all forms
of cable networks, pay-per-view networks are the newest, and therefore
the most unsettled. With these systems, subscribers pay only for
those programs they actually watch. If they have not paid for a
particular program, a scrambled signal appears on the pay-per-view
channel. The network and the system divide the subscriber fees,
based on a negotiated percentage. The subscriber pays what the market
will bear. Movies can be seen for a few dollars, while major sports
events may have a price tag in the $20 to $50 range.
Most cable systems
that offer pay-per-view programming employ addressable technology
that allows for interaction. Viewers who want to see a particular
program can press a button on a remote control device that sends
a signal back through the wire to the cable system. The program
is then unscrambled or otherwise made viewable by the consumer.
A computer also notes that the subscriber should be billed for the
program and this amount is added to the monthly amount the subscriber
must pay. Systems without addressable technology can operate pay-per-view
options by having subscribers call an 800 number to order a particular
program, but the instant access provided by the remote control works
The two main
pay-per-view services, Request Television and Viewer's Choice, program
twenty-four hours a day. Their staple programming is newly released
hit movies, but they also present sports and entertainment specials.
Both these services provide multiple channels that repeatedly run
the same movie (or the same ten or fifteen movies). The fundamental
plan of pay-per-view television is to compete with the video rental
business. Pay-per-view services want to enable viewers to see movies
at their convenience without having to leave their homes.
Playboy at Night
cablecasts each evening and is the oldest of the services that are
now pay-per-view. Originally a pay cable service, many community
groups objected to the "adult entertainment" content of the material.
They pointed out that if parents subscribed to The Playboy Channel
on a monthly basis, unsupervised children could easily tune in--accidentally
or on purpose. As a pay-per-view option, each Playboy program must
be specifically requested.
networks do not cablecast on a regular basis--they feature special
events, primarily sports and concerts. TVKO, for example, programs
a boxing event the second Friday of each month. The Wrestling Federation
supplies occasional wrestling matches. And Forum Boxing shows events
from the Los Angeles Great Western Forum.
that supply programming to a limited geographic area are fairly
numerous in the cable world. Almost all of them are sports or news
oriented (e.g. Home Team Sports, Prime Ticket, Madison Square Garden
Network, and Orange County Now). Sports networks are active only
when games are in progress, but most of the news services provide
24 hours a day of regional news information. Some of these news
services are operated in conjunction with a local newspaper or local
sports networks are considered pay or pay-per-view services even
though they contain advertisements. Usually the placement of such
sports channels in the "basic" or "pay" category depends on the
particular system. Some systems juggle regional sports networks
between basic and pay. If the system can obtain greater revenue
by offering a pay service, it may do so. If there is little interest
among consumers, the network is placed in the basic tier.
first cable network was Home Box Office (HBO). This service was
established in 1972 by Time, Inc. as a movie/special service for
Time's local cable system in New York City. The company then decided
to expand the service to other cable systems and set up a traditional
broadcast-style microwave link to a cable system in Wilkes-Barre,
Pennsylvania. In November of 1972, HBO sent its first programming
from New York to Wilkes-Barre. During the next several years HBO
expanded its microwave system to include about fourteen cable companies
The venture was not overly successful, nor was it profitable for
1975, however, shortly after domestic satellites were launched,
Time used satellite transmission from Manila to program the Muhammad
Ali-Joe Frazier heavyweight championship match for two of its U.S.
cable systems. The experiment was technically and financially successful
and HBO decided to distribute all its programming by satellite.
The satellite distribution system was easier and cheaper than the
microwave system. It also made it possible for HBO signals to be
received throughout the country by any cable system willing and
able to buy an earth station satellite receiving dish.
began marketing its service to cable systems nationwide, but initially
was not very successful. Few local systems were willing to pay the
almost $150,000 required for the technology required to receive
the signal. But satellite technology changed quickly, and by 1977
dishes sold for less than $10,000. Other pricing and programming
problems had to be overcome as well. But once the service reached
consumers, it was readily accepted. Viewers were willing to pay
to watch uncut movies without commercial interruptions. By October
of 1977, Time was able to announce that HBO had turned its first
after HBO beamed onto the satellite, Ted Turner, who owned WTBS,
a low-rated UHF station in Atlanta, Georgia, decided to put his
station's signal on the same satellite as HBO. Cable operators who
had installed a receiving dish for HBO could now also place Turner's
station, complete with network reruns and the Atlanta Braves baseball
games, on one of their channels. This placement created the first
superstation. A company transmitting the station charged cable operators
ten cents a month per subscriber for the signal, but the systems
provided WTBS free to their subscribers. The rationale for presenting
the superstation in this manner was that the extra program service
would entice more subscribers. The charge to the cable companies
did not cover the WTBS's own costs, but the station was now able
to set higher advertising rates because its audience was spread
over the entire country.
two successful programming services on the satellite, the floodgates
opened and many other companies set up cable networks. Viacom launched
a pay-cable service, Showtime, to compete with HBO. Like Time, Viacom
owned various cable systems throughout the country and had been
feeding them movies and special events through a network that involved
shipping the tapes by mail for microwave relay. Following the launching
of Showtime, Warner Amex began The Movie Channel, a pay service
that provided movies 24 hours a day. Not to be outdone, Time established
a second network, Cinemax, a service that consisted mostly of movies
programmed at times complementary to HBO. Other pay services that
sprung up were Galavision, a Spanish-language movie service; Spotlight,
a Times-Mirror movie service; Bravo and The Entertainment Channel,
both cultural programming services; and Playboy, an adult service
that entered the cable business by joining forces with an already
established network, Escapade.
that accepted commercials (later to be known as basic services)
also exploded in number. ESPN was an early entry, and its sports
programming was much in demand. Other basic services that appeared
by the early 1980s were CNN (also owned by Turner), the Christian
Broadcasting Network (CBN), USA, MTV, and C-SPAN. Two basic cultural
services were formed. One, owned by ABC, was called ARTS. The other
was CBS Cable, a service very expensive for its broadcast network
owner because it featured a great deal of originally-produced material.
Satellite News Channel (SNC), a twenty-four hour news joint venture
between Westinghouse and ABC was established to compete with CNN.
Daytime was a service geared toward women, and Cable Health Network
programmed material dealing with physical and mental health. The
number of superstations also grew as WGN in Chicago and WWOR in
New York joined WTBS.
several years in the early 1980s, both new pay and basic networks
were announced at a rapid rate--sometimes several in one day. Some
of these never materialized, some existed only for short periods,
but many showed signs of longevity. The entire cable TV industry
was growing. Revenues and profits increased over 100% a year.
Courtesy of USA Networks
course, this could not last forever. In the mid-1980's cable growth
began to decline and the entire cable industry went through a period
of retrenchment. Many cable networks consolidated or went out of
business. Both Galavision and Bravo converted from pay services
to basic services. Spotlight went out of business. The Entertainment
Channel turned its pay programming over to the basic network ARTS,
which then became Arts and Entertainment. The Playboy Channel shifted
programming between hard-core and soft pornography, caught between
angry citizens who objected to televised nudity and a small but
loyal group of viewers who wanted access to it. This shifting strategy
angered its partner, Escapade, and the two parted company with Playboy
paying Escapade $3 million dollars. MTV's ownership changed from
Warner-Amex to Viacom, as did Nickelodeon's. Getty Oil, which owned
ESPN, was purchased by Texaco. The new owner had no interest in
the sports network and sold it to ABC. CBN changed from a strictly
religious format to a broader, family-oriented format, and became
The Family Channel. Daytime and Cable Health Network joined to form
most highly touted failure was that of the CBS-owned cultural channel,
CBS Cable, which ended programming in 1983 after losing $50 million.
The service did not receive sufficient financial support from either
subscribers or advertisers. Its demise was almost applauded by some
cable companies who resented the encroachment of the broadcast networks
into their business. Another well-publicized coup occurred when
Ted Turner's Cable News Network bought out the Westinghouse/ABC
Satellite News Channel. This meant less competition for CNN, which
proceeded on less tenuous financial footing. The Turner organization
then established CNN2, a headline service that used the same writers
and reporters as the original CNN.
few new cable networks were introduced in the mid to late 1980s,
in part because many cable systems had filled all their channels
and had no room for newcomers. One notable exception was The Discovery
Channel, launched in 1985, which became quite successful.
cable network landscape changed somewhat in the 1990s. The downsizing
of the late 1980s allowed for moderate growth in the next decade.
In addition, in 1992, Congress passed a bill requiring cable networks
to sell their programming to services in competition with cable,
such as direct broadcast satellite (DBS) and multichannel multipoint
distribution services (MMDS). Prior to this time, cable systems
had tried to keep cable network programming to themselves. In fact,
many cable system owners also owned all or part of cable networks,
making it convenient and financially rewarding to make sure their
cable networks provided content for their own cable systems. For
example, TCI (Telecommunications, Inc.), the largest cable system
owner, had a financial stake in American Movie Classics, Black Entertainment
Television, CNN, The Discovery Channel, The Family Channel, QVC
Home Shopping, Turner Network TV, and WTBS.
the greatest threats to the cable system structure (but not necessarily
the cable networks) are Congressional actions of the 1990s that
have opened the door for telephone companies to enter the cable
TV business. Phone companies hope to become the "one wire into the
home." If this happens, cable systems will suffer, or perhaps disappear.
But the phone companies will have to turn somewhere for programming,
no doubt to entities that closely resemble the present cable networks.
also improved in the 1990s, and the prospect of digital signals
delivered over fiber optic lines meant cable systems (or phone companies)
would be able to deliver more than 500 channels to the home. All
these channels would need programming.
new markets and new technologies in mind, a number of companies
launched new networks. NBC started Consumer News and Business Channel
(CNBC) in 1991, and was followed by Courtroom TV and two new Turner
services, TNT (Turner Network Television) and the Cartoon Channel.
Several comedy channels started and eventually merged into Comedy
Central. A science fiction network, a game show network, a history
network, and many others appeared.
proposed change in programming most likely to affect cable networks
is video-on-demand (VOD). This type of distribution allows consumers
to select and view a program or movie at any time. Now in the experimental
stage, this process will probably involve a system that can receive
and store an entire movie in a device in or on the TV set and play
it from there at the viewer's convenience. Closer to reality is
near-video-on demand (NVOD). A cable system with 500 channels could
easily devote twelve channels to one two-hour movie and start the
movie on a different channel every ten minutes. In this way any
viewer could have the movie within ten minutes of when he or she
wanted it. Twenty or thirty movies could be running this way at
the same time. The present pay-per-view services engage in a limited
version of near-video-on-demand, but true VOD might very well change
the nature of both pay and pay-per-view services.
changes in both technology and policy will continue to keep cable
television services at the center of issues surrounding television.
Just as early cable networks transformed the meaning and experience
of television programming and viewing, the newer practices will
undoubtedly continue to alter our understanding and use of the medium.
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Black Entertainment Television; Canadian
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and Television; Home
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