Cable television

The rise and fall of cable television

The ad-supported cable industry is in transition. The number of subscribers has continued to decline, which has had an impact on revenue. The ratings of many top networks have plummeted, which is also impacting revenue. Most cable network owners started streaming services and pivoted to invest billions in programming on this video platform. However, not so long ago, cable television was at the height of its popularity and revenue.

The Golden Age of Cable: In the early 2010s, the cable television industry was at its zenith. In October 2010, more than 105 million American TV households subscribed to pay television, representing a penetration of more than 90% of TV households. In 2013-2014, cable television garnered over $10 billion in advertising engagements and surpassed broadcast television for the first time. In 2013, the average TV household had over 189 channels (despite only watching 17); a large majority of them were cable networks.

In 2012, the number of scripted entertainment shows on basic cable (125) surpassed broadcast television (119), peaking at 189 in 2015. In the early 2010s, cable viewers could watch scripted programs as well. popular than The closest, sons of anarchy and Burn notice. In 2011, Mad Men won its fourth straight Emmy for Outstanding Drama. The series finale of the two-time Emmy winner breaking Bad (with the help of Netflix
) was the most anticipated scripted program of 2013. Additionally, three years after its debut in 2010, The Walking Dead became the highest-rated scripted program among adults 18–49 on all of television and reached an average viewership of 17.3 million viewers in 2014.

There were also a number of popular unscripted shows on cable; The Daily Show with Jon Stewart, Pawn Stars, Deadliest Catch and The real world among many others. Additionally, cable also offered subscribers an increasing number of top-tier sports and news events. For example, ESPN televised the first college football league game in January 2015, averaging 33.4 million viewers. Later that year, the Republican presidential debate on Fox News averaged 24 million viewers, making it the most-watched news program on cable and the most-watched primary debate of all time.

Cable TV Background: By the early 2010s, cable television had become a commodity, but its origins began decades earlier. Cable television began as Community Area TV (CATV) in 1948 in remote areas of Pennsylvania, Oregon, and Arkansas. CATV gave households the ability to get a TV signal. Antennas were placed in high altitude areas to receive a broadcast signal and cable wire was then connected to subscriber homes, improving video reception. In the 1950s, microwave relays were first used, allowing wired households to import distant broadcast signals. After pressure from broadcasters, in 1962 the FCC rejected these microwave licenses and new restrictions followed.

In the 1970s, the FCC began to deregulate cable. In 1972 Charles Dolan and Gerald Levin thought viewers would want unavailable content for a monthly fee and HBO was founded. HBO used microwaves and telephone lines to distribute programs. The most significant innovation came when the FCC approved the first geostationary communications satellite launched in 1974. In September 1975, HBO’s coverage of the heavyweight boxing match between Muhammad Ali and Joe Frazier dubbed “Thrilla in Manila” was became cable’s first major live special event.

In 1976, the FCC repealed its remote signaling restrictions. This allowed Ted Turner to distribute his Atlanta-based independent station WTBS via satellite across the country. The following year, televangelist Pat Robertson launched the first basic cable network with The Christian Broadcast Network (CBN), now Disney
owned by Freeform. CBN began accepting commercials in 1981. After CBN launched, the floodgates opened and many familiar cable networks started up. In 1979 Nickelodeon and ESPN launched; in 1980 it was CNN, BET and USA. In 1981, when 25% of households had cable, MTV was launched. From 1980 to 1990, the number of cable networks grown up from 28 to 79, fragmenting the television landscape.

Cable has also created live events such as the MTV Video Music Awards, started in 1984. High profile live sporting events began to air on cable. In 1984, TBS began airing NBA games, and the NFL began airing Sunday Night Football games on ESPN in 1987.

Cable television has had notable news events. During the 1991 Persian Gulf War, CNN provided 24-hour live coverage from Baghdad, making the network an important news source. In 1993, CNN televised a NAFTA debate between Al Gore and H. Ross Perot that averaged a record 16.8 million viewers.

Some cable networks that were popular quickly got brand extensions. For example, there were spin-off networks (eg Lifetime Movie Network, MTV2). There were radio networks/programs (eg, E! Entertainment Radio, CMT Radio); journals (i.e. ESPN: the magazine, Nickelodeon magazine). In 1987, MTV became the first network to launch globally via satellite and CNN, ESPN and Discovery
, among others, quickly followed. Additionally, ESPN opened a number of ESPN Zone restaurants and at one point Discovery had over 100 retail stores.

At first, cable relied almost entirely on acquired off-network content for ratings and to fill the programming void. In the 1990s, cable, led by the top-rated US, ushered in an era of notable original films, miniseries, and television programs. Industry recognition and critical acclaim soon followed, and cable programming successfully challenged broadcasters for critical acclaim and industry recognition.

Early on, broadcast networks recognized the threat posed by cable in siphoning off viewership and ad revenue. Speak 1988-89 television season, with cable in well over half of U.S. homes, the audience share of ABC, CBS
and NBC was at 61% and falling every year. Cable’s audience share had grown to 20% and was still growing. That year, cable generated $1.5 billion in advertising revenue, a 40% year-over-year increase.

During the annual initial presentation, broadcast executives regularly criticized the cable industry in front of advertisers (more recently they criticized Facebook and Google). CBS had released a document called “The Cable Fable”, which pointed out that most cable programming consisted of reruns. Additionally, CBS said, the ratings of any prime-time program were significantly higher than any cable network show. Additionally, broadcast was a better reach and more effective vehicle for building brand awareness.

With the loosening of media ownership, consolidation has swept the media industry. As a result, owners of broadcast networks quickly acquired cable networks. At the time, cable television, with its increased subscribers and viewership, was a revenue growth area for their new parent companies.

Cable TV and streaming video: Disney, Comcast
ViacomCBS and AT&T
now own a number of cable networks and all have launched video streaming services. In addition, Discovery and AMC are expected to launch online services next year. Streaming has had a significant effect on cable television, the same way cable television had on television decades ago. In other words, lower ratings for most cable networks. In calendar year 2019, only two of the top 40 cable networks for adults 18-49 grew their prime-time viewership year-over-year. With total viewers, AMC’s primetime viewership fell 22% year over year, FX fell 21%, US fell 18%, TBS was down 17% and TNT was down 15%.

Streaming video helped promote cord cutting. There are only 83 million pay-TV subscribers left, and that number keeps falling. Conversely, in less than a year, Disney Plus had over 60 million subscribers and in its first six months, Comcast’s Peacock 22 million the subscribers. Additionally, media conglomerates are investing more in streaming video content. Over the next few years, AT&T is expected to invest up to $5 billion in HBO Max programming. Similarly, Disney and Comcast plan to invest at least $2 billion in Disney Plus and Peacock, respectively, over the next few years. These services will also provide subscribers with thousands of movies and TV shows from their extensive programming libraries (many of which originated on cable).

As viewers show a preference for on-demand viewing, cable is no longer the “cash cow” it once was for their parent companies. Media conglomerates Comcast, Disney, ViacomCBS and AT&T have changed their strategy to focus more on video streaming. This included massive overhauls and reorganization of their entertainment and media divisions with the replacement of several high profile executives.

As part of the restructuring, cable networks will become a component of broader video offerings for subscribers. In some cases, lower quality cable networks will be shut down. Like 30 years ago, cable networks are expanding their brand, but now it’s on streaming platforms such as FX on Hulu and National Geographic on Disney Plus.

To illustrate how pay TV lost its financial value, consider that AT&T acquired DirecTV in 2015 for $49 billion. With the satellite TV provider rapidly losing subscribers, AT&T sought to offload DirecTV. The sale price could be as low as a third what AT&T paid five years earlier.