Chapter 6
“Cable and the specialization of television”
~ According to the Pew Research Center in 2004, more than one in five people age 18-29
say they “regularly learned about the campaign and the candidates from the comedy
shows like Saturday Night Live and The Daily Show.
~The Daily show with Jon Stewart and the Colbert Report are two top programs on the
Comedy Central cable network, which is available in more than eighty-eight million
homes nationwide.
~Since mid 1970’s both HBO and WTBS became available to cable companies across the
nation.
~ In 1977, only 14% of all American homes received cable. By 1985, the number had
climbed to 46%.
~In 1999, cable penetration hit about 70%, but it fell 59% by 2006 as direct broadcast
satellite (DBS) services like DirectTV captured a bigger piece of the market.
~The cable industry’s emergence from the shadow of broadcasting television.
~ Cable Channels focused more on providing specialized services for smaller audiences
that broadcasters often ignored.
~ Cable has offered the public greater opportunities to more fully participate in the
democratic promises of TV.
Technology and the Development of Cable
~ Cable TV’s earliest technical breakthroughs originated in rural and small-town
communities in the late 1940’s.
~Although today’s technology is more advanced, the key technical distinction between
cable and broadcasting remains: In Cable, programs reach TV set through signals
transmitted via wire; broadcasting, signals are transmitted over the air.
~ Advantage of cable is that the airwaves in any given community can accommodate
fifteen or so VHF and UHF channels w/o electrical interference, cable wires can transmit
hundreds of channels with no interference.
CATV-Community Antenna Television
~ The first small cable system- called CATV, or community antenna television. CATV
originated in Organ, Pennsylvania, and Manhattan, where mountains or tall buildings
blocked TV signals.
~The early systems served roughly 10% of the country and because of early technical and
regularly limits, contained only 12 channels.
~2 big advantages of cable, first by routing and reamplifying each channel in a separate
wire, cable eliminated over-the-air interference. Second, by running signals through
coaxial cable, channel capacity was increased.
~Because broadcast channels were generally regarded as a limited natural resource,
CATV foreshadowed later developments in which cable-channel capacity grew
dramatically and the need to operate a broadcast frequency diminished.
The Wires and Satellites behind Cable Television
~In 1945, Arthur C. Clarke published the original theory for a global communication
system based on three satellites equally spaced from each other, rotating with the earth’s
orbit.
~ In the mid 1950’s, these theories became reality, as the Soviet Union and then the US
successfully sent satellites into orbit around the earth.
~ In 1960, AT&T launched Telstar, the first communication satellite capable of
receiving, amplifying, and returning signals.
~ An active satellite, Telstar was able to process and relay telephone and occasional
television signals between US and Europe.
~ By the mid 1960’s, scientist figured out how to lock a communication satellite into
geosynchronous orbit.
~ For Cable TV, the breakthrough was the launch of domestic communication satellites,
first with Canada’s Anik satellite in 1972, followed by the US’s Westar in 1974.
~ The first satellite was capable of operating for 7 or 8 yrs. and had 12 or 24
transponders, the relay points on a satellite that perform the receive-and-transmit
functions.
~ By the mid 1990s, the newest satellites had 48 transponders and lifetimes of more than
15 yrs. Cable programs, MSNBC or the Discovery Network rented these transponders
from satellite companies for million-dollar monthly fees
~1 transponder can process on color TV signal or about 3 thousand simultaneous longdistance phone calls. In recent years, companies have began using digital compression, a
way of increasing the number of signals transmitted simultaneously w/o disturbing image
quality. This process has enabled one transponder to handle 4 to 6 TV signals.
~With Cable TV signals are processed at a computerized nerve center, or headend, which
operates various large satellite dishes that receive and process long-distance signals form
CNN in Atlanta or MTV in New York. The headends house’s receiving equipment can
pick up an area’s local broadcast signals or a nearby city’s PBS station. The Headends
relays each premium channel, local network affiliate, independent station, and public TV
signals along its own separate line.
~Advances in satellite technology in the 1970s dramatically changed the fortunes of cable
by creating a reliable system for the distribution of programming to cable companies
across the nation.
~Late 1970s and 1980s, cable television became popularized as dozens of new cable
channels were launched.
~The first cable network to use satellites for regular transmission of TV programming
was Home Box Office (HBO), which began delivering programming such as uncut,
commercial-free movies and exclusive live coverage of major boxing matches for
monthly fee in 1975.
~Second cable network began in 1976, when media owner Ted Turner distributed his
small Atlanta broadcast TV station to cable systems across the country via satellite. The
station was eventually renamed WTBS. Turner later launched the Cable News Network
(CNN) in 1980.
Cable Threatens Broadcasting
~Throughout the 1950s and 1960s, the Federal Communications Commission (FCC)
operated on behalf of the broadcast industry to ensure that cable would not compete with
conventional televisions.
~FCC rules therefore blocked cable companies from bringing distant TV stations into
cities and towns with local channels. One exception to these lobbying efforts: CATV
service for sparsely populated communities.
Balancing Cable’s Growth against Broadcasters’ Interests
~By the early 1970s, with the advent of communication satellites, it was clear that cable’s
growth could no longer be limited to small, isolated communities.
~In 1972, the commission updated or enacted two rules with long-term effects on cable’s
expansion.
~The FCC reaffirmed must-carry rules, first established in 1965, which required all
cable operators to assign channels to and carry all local TV broadcasts on their systems.
~The FCC guidelines also allowed additional noncommercial channels to be introduced
into bigger TV markets, but the guidelines limited the number of distant commercial TV
signals to two or three independent stations per cable system. Guidelines prohibited
cable companies form bringing in a network affiliate form another city when a local
station already carried that network’s programming.
~The 1972, FCC required cable systems to carry their own original programming by
mandating access channels in the nation’s top one hundred TV markets.
~The FCC required large-market cable operators to assign separate channels for each
access service, whereas cable operators in smaller markets could require education,
government, and the public to share one channel. In addition to free public-access
channels, the FCC called for leased channels. Citizens could buy time on these channels
and produce longer programs or present controversial views.
Cable’s Role: Common Carrier or Electronic Publisher?
~Electronic publishers, with the same “publishing” freedoms and legal protections that
broadcast and print media enjoy in selecting content. That meant that the cable
companies felt entitled to pick and choose which channels to carry. The FCC argued the
opposite: that cable systems should be common carries-services that do not get involved
in channel content.
~In 1979, the debate over this issue ended in the landmark Midwest Video case, when the
US Supreme Court upheld the rights of cable companies to dictate their content and
defined the industry as a from of “electronic publishing.”
Franchising Frenzy
~By the end of the 1970s, particularly after the Midwest Video decision, the future of
cable programming was clear, and competition over obtaining franchises to supply local
cable service had become intense. A cable franchise was a mini-monopoly awarded by a
local community to the most attractive bidder, usually for a fifteen-year period.
~Cities and states used the same logic that had been used in granting monopoly status to
AT&T for more than a hundred years.
~The period form the late 1970s through the early 1990s constituted a unique, if
turbulent, era in media history, for it was during this time that most of the nation’s cable
systems were built
~Franchise fee: the money the cable company would pay the city annually for the right to
operate the local cable system.
~During the franchising process (early 1980s), competing cable companies made
attractive offers and promises to gain monopoly rights in certain areas.
~From the late 1970s through the 1980s, lots of wheeling and dealing transpired, along
with occasional corruption. Cable companies sometimes offered far more than they
could deliver.
New Rules Aid Cable’s Growth
~Because the 1934 Communications Act had not anticipated cable, its regulatory status
was problematic during its early years.
~By the mid-1980s, Congress, the FCC, and courts had repealed most early cable
regulations, stimulating growth in the medium that had begun to acquaint the world with
innovative programming like that on MTV and CNN, but also triggering regular rate
increases for cable customers.
Paying and Deal Making to Carry Local Broadcasters
~In 1992, a new cable act added a twist to must-carry rules.
~The 1992 act required that every three years commercial broadcasters opt for either
must-carry or retransmission consent. The later option meant that broadcasters could
now ask cable companies for fees to carry their channels.
~By June 1993, each of the eleven-hundred-plus commercial U.S. TV stations
(noncommercial stations could choose only must-carry) had to inform all cable system
operations in their broadcast range whether they were opting for must-carry or
retransmission.
~In 1993, the stations that chose retransmission consent did so because they correctly
believed cable companies would not risk alienating customers by dropping the popular
broadcast stations that carried network programs
~A few large broadcast stations owned by powerful media conglomerates, such as
Disney, struck deals with cable companies that owned a large number of systems.
The Telecommunications Act of 1996
~After sixty-two years, Congress finally rewrote the nation’s communications laws in the
Telecommunications Act of 1996 bring cable fully under the federal rules that had long
governed the telephone, radio, and TV industries.
~Congress used the Telecommunications Act to knock down regulatory barriers,
allowing regional phone companies, long-distance carries, and cable companies to enter
one another’s markets.
~The Telecommunications Act allows cable companies to offer telephone services, it also
permits phone companies to use fiber optic wires to offer Internet services and to buy or
construct cable systems in communities where there are fewer than fifty thousand
residents.
~Before passage of the 1996 legislation, the phone and cable industries had long
benefited from their regional and national monopoly status. Congress hoped that the new
rules would spur competition and lower both phone and cable rates, although this did not
usually happen.
~The nation’s cable companies continued to periodically ask the courts to repeal mustcarry rules and free the cable companies to carry whatever channels best served their
commercial interests.
~In 1997, however, broadcasting won a final victory when the Supreme Court upheld the
constitutionality of must-carry rules, ensuring that most broadcasters would be carried by
their local cable companies.
~The cable industry has delivered on the technology, investing more than $100 billion in
technological infrastructure between 1996 and 2006.
~By 2006, US cable companies had signed more than thirty million households to digital
programming packages; about twenty-eight million households had cable Internet
service, and nearly six million households received their telephone service via cable.
~But the 1996 act has not resulted in extensive competition in cable. About 92% of US
cable subscribers live in communities that still have no viable competition to the local
cable company.
~The FCC has no authority to enforce rate freezes or cuts because the 1996 act required
the FCC to end rate regulation in 1999.
Cable Comes of Age
~As the broadcast audience continued to erode throughout the 1990s and 2000s, the
major networks developed or acquired several cable channels in order to capture some to
the migrating viewers. NBC operated cable news services CNBC and MSNBC and
channel Bravo. ABC owned ESPN and Lifetime, A&E, History, and E! CBS was the
slowest to develop cable outlets, TNN and CMT.
~Disney’s purchase of ABC in 1995 and Viacom’s purchase of CBS in 1999 paired the
networks’ cable channels with the more extensive cable properties of their corporate
parents.
~Broadcasting, the trade magazine for television and an opponent of cable’s early
growth, became Broadcasting & Cable in 1993.
~During the old network era in television, ABC, CBS, and NBC accounted for more than
95% of prime-time viewing; independent stations and public television accounted for the
rest. By the summer of 1997, basic cable channels had captured a larger prime-time
audience than the broadcast networks.
~In the new cable era, a redefined concept of narrowcasting-providing specialized
programming for diverse and fragmented groups-has cut into broadcasting’s large mass
audience.
~Cable consumers usually choose programming from a two-tiered structure: Basic cable
services are part of one monthly fee, and premium cable services are available
individually to customers at an extra monthly or per-use fee.
Basic Cable Services
~A basic cable system today includes a 36 to 72 channel lineup composed of local
broadcast signals, nonbroadcast access channels, one or more regional PBS stations, and
a variety of services retrieved from national communication satellites. These basic cable
channels include ESPN, CNN, MTV, VH1, the USA Network, Bravo, Nickelodeon,
Lifetime, ABC Family, Comedy Central, CNBC, C-Span and C-Span2, Black
Entertainment Television, Telemundo, the Weather Channel, a home-shopping service,
superstations (independent TV stations linked to a satellite) such as WGN or WPIX, and
ten to thirty additional channels, depending on a cable system’s capacity and regional
interests.
~Local cable companies pay each of these satellite-delivered services between five cents
and more than $2.60 a month per subscriber.
~The 1990s witnessed a proliferation of new basic cable channels, increasingly
specialized for smaller but more definable audiences. These include the popular Sci-Fi
Channel, the Cartoon Network, Comedy Central, and FX. Newer services featured
channels devoted to history, health and fitness, books, games, parenting, pets, and
therapy.
~More than 90 regional channels exist in the US.
~In 1992, 87 cable networks were in business. By 2006, that number had grown to more
than 530 networks serving cable and satellite television. Cable system capacities
continued to increase due to the rebuilding of cable systems with high-bandwidth fiberoptic cable and the advent of digital cable services in the late 1990s, which have enabled
cable companies to expand their offerings beyond the basic analog cable channels.
~By 2006, about thirty million US households subscribed to digital cable services.
CNN’s Window to the World
~When it premiered in 1980, many people viewed Cable News Network (CNN), the first
24/7 cable TV news channel, as a joke. It wasn’t until Turner launched Headline News in
1982, and turned a profit with both operations in 1985, that the traditional networks
began to take notice of cable news.
~In 1991, CNN emerged as a serious news competitor to ABC, CBS, and NBC during the
Gulf War and during the US’s bombings of the Iraqi capital.
~About 200 local broadcast stations with CNN agreements, including many network
affiliates that ordinarily carried network news, switched to CNN for coverage of the
crisis.
~CNN liberated viewers by offering a constant window into news happenings around the
world.
~Today, CNN appears in more than 200 countries and territories around the globe; more
than one billion people have access to a CNN service.
~The success of CNN proved that there is both a need and a lucrative market for twentyfour-hour news.
“I Want My MTV”
~The second basic cable service to dramatically change the world’s cultural landscape is
MTV. Launched in 1981 by Warner Communications and purchased by Viacom in 1985,
MTV and its global offspring-reach more than 440 million homes worldwide.
~By the late 1990s more than a quarter of MTV’s revenue came form international
sources.
~Today MTV exerts a powerful influence on global culture.
~In the early 1980s however, MTV’s reluctance to play music videos by black artists was
related not to racial tensions but to the economics of the cable system.
~It took Michael Jackson’s Thriller album in 1982 to break down music video’s early
color barrier.
~with hip-hop’s rise in popularity throughout the 1980s and 1990s among both black and
white audiences, MTV began to add more hip-hop, soul, and R&B videos to the rotation.
~Throughout the 1980s, MTV sought more and more control over music video
distribution and exhibition, employing two monopoly tactics to ensure dominance. First
MTV paid record companies for exclusive rights to the most popular music videos,
thereby preventing access it would become the music video network in all the main cable
markets.
~Second, MTV signed agreements with the major cable companies to ensure that it
would become the music video network in all the main cable markets.
~Fuse, owned by Cablevision Systems has presented MTV with its most spirited
challenge in recent years. Fuse reached more than thirty-eight million households by
2006.
~The major recording labels, spending as much as $50 million a year to produce videos
in the 1990s, have grown dependent on MTV’s power to certify a hit recording.
~MTV began to stray from a rotation of music videos in the early 1990s to more original
programming, including the reality-based soap opera, The Real World.
~MTV responded in 1996 by creating another channel, MTV2, which is designed to
present music videos like MTV originally did, by 2006, MTV2 was on cable systems that
reached about fifty-nine million subscribers.
~Real World, which first aired in 1992, and helped to inspire a craze of reality television
on network TV in the early 2000s, has been the model for a number of other MTV youthoriented reality programs, including Road Rules, Laguna Beach, Pimp My Ride, MADE,
and My Super Sweet 16.
~Many critics worry that its influence has eroded local culture-specific traits among the
world’s young people and has substituted an overabundance of U.S. culture in its place.
~Defenders of the network, however, point out that MTV and cable have created a global
village, giving the world a common language.
~MTV has also had, and continues to have, an influence on the media landscape.
~As Nickelodeon and MTV kids reach adulthood, they no longer view broadcast
programs, as superior to cable, since they’ve spent most of their childhood watching
cable networks.
Premium Cable Services
Premium Channels- movie channels such as HBO and Showtime, Pay Per View, Video
on Demand and interactive two way services that enable consumers to use their tv to
bank, shop, play games and access the internet.
HBO Alternative
-oldest and most influential premium channel is HBO ( one of nation’s largest owners of
cable companies)
-HBO and Cinemax bring a combined total of 39 million premium subscribers to Time
Warner
-HBO runs more than 90 theatrical motion pictures a month
-VCR’s and PPV brought competition to the movie channels…..because of this movie
channels expanded their services
-HBO developed it’s own programming (Sopranos, Deadwood, Entourage)
-1982, HBO entered into an arrangement with CBS and Columbia Pictures to form a new
production house, TriStar Pictures.
Pay-per-View, Video on Demand and Interactive Cable
-1985 introduction of Pay-per-view (PPV) which offered recently released movies or
special sporting events to those who paid a designated charge to the cable company
-Video on Demand (VOD) – enabled customers to choose among hundreds of titles, the
download a selection from the cable operator’s server onto their cable tv box hard drive
to watch a movie the same way we would watch a video(pausing, fast forwarding, etc.)
-interactive cable television- 1990’s—enabled senders to send signals upstream or back
to the headend. EX) connect households to banks, permitted police burglary units and fire
departments to monitor homes
Cable Music Services
-Cable Music- CD quality premium audio services;24 music channels uninterrupted by
ads.
-1980’s: Music Choice was the first digital audio service
Direct Broadcast Satellites: Cable without Wires
-Direct Broadcast Satellites, DBS, presents the biggest challenge to the existing cable and
television industries.
-earliest earth station antennas or dishes were 20-40ft in diameter. VERY EXPENSIVE
-Rural residents began investing in seven to ten foot receiving dishes and downlinking for
fre the same channels that cable companies were supplying to wired communites
-This led to legal challenges against the residents
-law was unclear—satellite users had to buy or rent descramblers and subscribe to
services as the cable customers did.
-gradual improvements in satellite technology allowed for the dishes to decrease in size
from 20ft to 3 ft
-now you can order a satellite that is the size of a pizza
-Today, DirectTV and EchoStar offer most of the channels and services that cable
companies offer often at a lower price.
-UPSIDE:
DBS’s digital technology provides digital quality pictures and CD quality
sound. Also offers sports packages that aren’t locally carried on broadcast networks
-DOWNSIDE: DBS systems don’t have the same ability as cale to bundle high speed
internet and telephone service with their video programming. Doesn’t pick up area’s local
broadcast signals
Ownership and Business Issues in Cable and DBS
-Multiple System Operators (MSOs) –large corporations that each own many cable
systems.
The Major Cable and DBS Corporations
-1980s and 1990s, two large companies, TCI (Tele-Communcations INC) and Time
Warner Cable dominated the acquisition of smaller cable companies. –
-1990s AT&T bought it’s way into the lucrative emerging broadband cable and internet
business.
-1998 AT&T purchased TCI and renamed the cable division of AT&T Broadband and
Internet Services.
-AT&T went into debt and broke the company into four components: consumer long
distance, business services, wireless, and broadband services.
-Time Warner Cable, the second largest MSO, is a division of the worlds largest media
company, Time Warner
-Time Warner is also a major provider of programming services
The Business of Cable
In 1970, there were about 2500 small cable systems operating in the US. By 2006 7900
systems were running.
-Since 1980, basic cable rates have grown from $7 per month to more than $41
-By 2006, total revenues from cable subscriptions and advertising exceeded $94 million a
year
-1978 cable industry employed 23,000 people—2006 employed 137,000
-Cable workforce serves the production, distribution, and exhibition sectors of the
industry.
Alternative Voices
-After suffering through years of rising rates and limited expansion of service, some of
the smallest cities have decided to challenge the private monopolies of cable giants by
building competing, publicly owned cable systems. These cities include: Glasgow,
Kentucky; Kutztown, Pennsylvania; Cedar Falls, Iowa: Provo Utah
Cable, DBS, ad Implications for Democracy
-Cable and DBS have come to follow the one way broadcast model; Their operators
choose the programming from a few service providers, with little input from citizens or
consumers
-most cable channels have become heavily depended on recycling old tv shows and
movies
-in the broadest sense, the development of cable has always posed a contradiction. On
one hand cable has dramatically increased the # of channels. On the other hand cable has
undermined the network era during which television worked as a kind of social adhesive,
giving most of the population a common bond, a set of shared programs.
-not everyone has access to cable or satellite television
-by 2006, 14% of US households still relied on over the air broadcasts for their television
Programming.