A Brief History of Broadcast and Cable TV: #BeetU, Session 1

Session 1: A Brief History of Broadcast and Cable TV

National broadcasters and cable networks distribute their programming via satellite, but when we say “satellite provider” in the context of TV today, we are referring to the satellite distributors of TV that compete with cable operators.

The first direct broadcast service via satellite in the U.S. launched in 1991 and was called Primestar. Satellite providers are unique because they’re not limited to a geographical footprint like cable operators are. That’s because there’s no “final mile” they need to install (i.e., the bit of cable that has to run into a house to power a cable service). As a result, satellite providers are nationwide, which is important from an advertising perspective.

In a different vein, once “rabbit ears” (the colloquialism for antenna) began to be replaced by set-top boxes in mass, retransmission fees became an increasingly significant share of revenue for local broadcast. These are the fees distributors pay to local broadcast stations to “retransmit” their over-the-air signals as channels to subscribers.

As a result of the increasing number of set-top boxes in people’s homes, more cable stations were created. This spike in programming led to more viewing and more inventory. National broadcasters wound up launching more and more cable networks to ensure they could capture as broad of an audience as possible. Their other motivation was to collect carriage fees from cable and satellite distributors in return for distribution of their network portfolio.

In any satellite or cable distribution agreement, the distributor (e.g., Comcast, Dish, etc.) is given two minutes or four :30-second spots to sell within each hour of programming. While this might seem like a negligible amount of inventory, operators and satellite providers still have very substantial TV advertising businesses.

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