Cable Television Challenges Network Television

During the 1990’s, the cable television industry dramatically increased its market share of television viewers and brought about a revolution in program options.

Summary of Event

Cable television was first offered during the late 1940’s to provide television signals to people who lived in remote areas where it was difficult or impossible to receive regular television broadcast signals. At that time, no one could have imagined the phenomenal growth that the cable industry would undergo during the 1990’s. By 1999, almost 75 million American households subscribed to cable television. With more than 99 million American households owning television sets, the proportion of households that had decided to pay for cable service had reached 75 percent. The cable television industry had first shown signs of growth during the 1950’s and 1960’s. At that time, cable service was offered to many small cities and towns across the country. Subscribers paid for the signals of television network affiliates, educational television stations, and possibly a number of independent stations. Compared to what became available to cable subscribers during the 1990’s, these early offerings were extremely modest. Cable television
[kw]Cable Television Challenges Network Television (Mid-1990’s)
[kw]Television Challenges Network Television, Cable (Mid-1990’s)
[kw]Network Television, Cable Television Challenges (Mid-1990’s)
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[g]North America;Mid-1990’s: Cable Television Challenges Network Television[09060]
[g]United States;Mid-1990’s: Cable Television Challenges Network Television[09060]
[c]Business and labor;Mid-1990’s: Cable Television Challenges Network Television[09060]
[c]Radio and television;Mid-1990’s: Cable Television Challenges Network Television[09060]
Bewkes, Jeffrey L.
Bodenheimer, George
Chase, David
Collins, Joseph
Turner, Ted

In the early 1960’s, there were only 850,000 cable subscribers in the United States. During this period, local television stations began to think of cable television as a competitor to be feared, and the Federal Communications Commission Federal Communications Commission (FCC) stepped in and placed restrictions on the cable industry. It was not until the early 1970’s that federal deregulation made it easier for the cable industry to grow. The first pay-television network, Home Box Office Home Box Office (HBO), was started by Charles Dolan Dolan, Charles and Gerald Levin Levin, Gerald of Sterling Manhattan Cable in 1972. Out of this venture, a national satellite distribution system was created.

The new satellite system paved the way for an increase in cable program networks. Ted Turner, the owner of a local television station in Atlanta, Georgia, changed his station over to satellite distribution and in so doing created the first “superstation”—TBS, the Turner Broadcasting System. Turner Broadcasting System
Television;superstations By the end of the twentieth century, Turner’s superstation was available to almost every cable subscriber in the country.

In 1980, the number of cable television subscribers had grown to 15 million households. With the passage of the federal Cable Act of 1984, Cable Act (1984) the cable television industry became almost entirely deregulated. Because of deregulation, the cable industry boldly invested vast sums of money to wire the country and to develop new programming. The industry spent more than $15 billion on wiring alone.

In 1992, 82 national cable networks were operating in the United States. By 1998, more than 10,000 cable systems were in operation; 174 national cable networks were in business, and the industry employed more than 127,000 people. In a span of six years, the number of national cable networks had increased by more than 100 percent.

In August, 1998, the Cablevision Bureau (CAB) gathered data that confirmed that “basic cable attracted a larger monthly viewing audience than the combined broadcast networks.” This was the first time in the history of television that cable television had accomplished this feat. During the 1997-1998 television season, basic cable programming was watched by an average of 21.9 million households (a 38.5 share of the total audience). This constituted a 2.6 million household increase and a 4.2 share increase over the previous television season. During the same period, the broadcast networks lost 1.4 million viewing households and a 3.2 share of the audience.

In 1999, cable television continued to gain viewers. During the second week of the new television season (September 27-October 3, 1999), basic cable rose 7.6 percent in average prime-time ratings according to CAB’s analysis of A. C. Nielsen ratings data. In this time period, some of the basic cable programming that did extremely well included coverage of professional football on ESPN ESPN (Entertainment and Sports Programming Network), the USA network’s World Wrestling Federation program Monday Night Raw, and original films on Turner Network Television (TNT). By the late 1990’s, the average cable subscriber could choose from a wide selection of programming options. More than half of all cable subscribers could choose from among at least fifty-four channels in 1998, up from forty-seven in 1996. As the cable television industry grew, the public demanded more diverse programming and programming of higher quality.

In 1996, the U.S. Congress enacted the first major new federal communications law since 1934. The Telecommunications Act of 1996 Telecommunications Act (1996) offered regulatory relief and flexibility that spurred the cable industry to expand. Whereas the growth experienced by the cable industry during the early 1990’s was tied primarily to the wiring of previously unserved or underserved areas, it appeared likely that growth in the twenty-first century would be tied more closely to new housing starts.

American cable subscribers were able to watch a number of high-quality programs produced by cable networks during the 1990’s. The premium cable network HBO produced the critically acclaimed and popular programs The Sopranos, Sex and the City, and Oz.


With the growth of cable television and public clamor for greater variety and high-quality programming, it seemed almost inevitable that “change” and “innovation” would become cable industry buzzwords going into the twenty-first century. In addition to cable’s ever-increasing role in television, the cable industry was poised to become a major force in offering online services, data delivery, and high-speed access to the Internet. Internet;service providers Through the use of fiber optics and coaxial cable, cable systems were able to offer Internet access that was hundreds of times faster than that provided over telephone lines. One of the most promising growth areas for the cable industry was digital-package sales, in which companies batched together services to create special packages that customers would find hard to resist. Whether they offered digital packages, premium-channel packages, or pay-per-view packages, cable companies looked to hook new subscribers with innovative and attractive sales offers.

Deregulation further encouraged cable companies to venture into telephony and made it possible for telephone companies to distribute cable television programming. Cable providers were also emboldened to try their hands at video compression, digital transmission, and high-definition television (HDTV). Some cable operators experimented with two-way channel capability, which allows subscribers to interact with programming facilities or the system’s information headquarters, so they can reply to public-opinion polls or have access to written or graphic materials.

Meanwhile, however, the industry began to face strong competition from direct broadcast satellite (DBS) technology. Direct broadcast satellite television By the end of 1998, more than twelve million customers were getting their programming from noncable multichannel video providers. As the Department of Justice stated, “While programming services are delivered via different technologies, consumers view the [DBS and cable] services as similar and to a large degree substitutable.” During the 1990’s, the top ten cable multiple systems operators (MSOs) grew extremely large. In 2000, 75 percent of the nation’s cable subscribers looked to the top ten MSOs for their programming. With more than sixteen million subscribers, the largest MSO in the country was AT&T Broadband. AT&T Broadband[AT and T Broadband] Time Warner Cable Time Warner Cable ranked second with roughly thirteen million subscribers. None of the other top ten MSOs had more than six million subscribers.

Cable television altered the way the American public watches television. Through cable, viewers have access to channels that are completely devoted to specific kinds of programming; they can watch twenty-four-hour all-news networks, specialty film channels, Spanish-language programs, programs aimed at women, religious programs, music videos, cooking shows, travel programs, children’s programs, science programs, and many more. It has been argued that with all these choices, the public audience has become fragmented. Whereas in decades past the majority of American viewers typically tuned in to the same small group of popular programs, since the 1990’s the audience has tended to be spread among many more increasingly different programs.

Throughout the 1990’s, the old broadcast television networks were unable to curtail the erosion of their market share as cable stations gained viewers. The broadcast networks had to work harder to maintain viewership, and they fought back in the late 1990’s by increasing the numbers of game shows and investigative-reporting programs they aired. Cheaper to produce than situation comedies, drama shows, and other kinds of programming, these shows were popular with a large segment of the viewing public that still watched regular network television.

Some have argued that since the 1990’s both basic cable channels and premium cable channels have produced more high-quality programming than has been found on the broadcast networks. Although basic cable channels still have to be concerned about censorship issues with their programming, premium cable channels do not have such worries, so their programming can include graphic violence, nudity, and coarse language, just as theatrical films can. Original premium cable series such as The Sopranos and Sex and the City made the most of this freedom, and audiences responded.

While the variety of cable television’s programming has been criticized as being nothing more than “a map of our most noble and base instincts,” the cable television industry rightly can point to how far it has come in a relatively short period of time. American viewers have shown that they are willing to pay for the expanded choices offered to them by cable operators. The days when just a few networks could monopolize news and entertainment audiences ended as Americans opted for freedom of choice and as other voices found outlets to wider audiences that had not previously been available. Cable television

Further Reading

  • Aufderheide, Patricia. “Cable Television and the Public Interest.” Journal of Communication 42 (Winter, 1992): 52-65. Presents a solid overview of how the public interest can best be served by the growth of cable television.
  • Baldwin, Thomas F., and D. Stevens McVoy. Cable Communication. 2d ed. Englewood Cliffs, N.J.: Prentice Hall, 1988. Examines in detail every aspect of the cable industry, from the technical to public policy. Although somewhat dated, remains essential reading for those interested in how the cable industry evolved.
  • Blanchard, Margaret A., ed. History of the Mass Media in the United States. Chicago: Fitzroy Dearborn, 1998. History in encyclopedia format provides several insightful overviews of the rise of cable television programming in the entries “Cable Networks,” “Cable News,” and “Cable Television.” Includes useful bibliographies.
  • Brenner, Daniel L., and Monroe E. Price. Cable Television and Other Nonbroadcast Video: Law and Policy. New York: Clark Boardman, 1986. Discusses how the Cable Communications Act of 1984 as well as various judicial rulings and decisions affected the cable industry.
  • Hodes, Daniel, Kiran Duwadi, and Andrew Wise. “Cable’s Expanding Role in Telecommunications.” Business Economics 34 (April, 1999): 46-51. Argues that as the cable industry takes on a larger role in the “telecommunications arena” it should make sure that it reduces its debt and improves customer service to hold on to subscribers.
  • Sterling, Christopher H., and John Michael Kittross. Stay Tuned: A History of American Broadcasting. 3d ed. Mahwah, N.J.: Lawrence Erlbaum, 2001. Comprehensive one-volume history of radio and television in the United States. Includes discussion of how the advent of cable television affected the networks, both economically and in their programming.

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