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The Traditional TV model in 60 seconds
The Traditional TV model in 60 seconds
You have the companies that make the shows and stick the shows on the channels. These are called programmers and Disney is an example of a programmer. Programmers make money in two ways. One way is to get the cable companies, called Multi-channel video programming distributor, to pay them to put their channels in the cable bundles. This is called carriage. They are carrying the channels. The second way is to sell advertising.
Cable companies make money by charging subscriptions to their customers for the cable bundles. They also get a small amount of the advertising slots. The traditional cable business is a gold time. Customer pay for both the things they want and don’t want. In addition, customers then have to sit through advertising.
While watching cable, you may have noticed a mix of both national advertisements and local advertisements. This mix of different ads is because some ad spots are controlled by the network while others are controlled by the local cable company.
Cable is the cash cow for the television industry. They use money from cable to produce new shows that they can put on the streaming services. Cable is effectively subsidizing streaming.
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