So I understand that business-wise it works and there is money to be made by charging people to watch TV, but I’m wondering what dish/direcTV/etc actually do in terms of innovating and getting entertainment on the air? My understanding is that the money from commercials goes straight to the networks, what incentive is there for the networks to not just allow free streaming on their websites so that more people see the show and the commercials in it?
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>what incentive is there for the networks to not just allow free streaming on their websites so that more people see the show and the commercials in it?
Cable companies are the Middle Men, so to speak. They provide the service, but each channel has an agreement with the cable company for a fixed rate of $ *per user*. ESPN has historically been the most expensive channel, charging something like $3-4 per subscriber, while other channels make between say, 25c and $1 per subscriber.
Networks *want* users on cable TV, because its guaranteed cash flow. When cable was standard, most people spent $70-$100 just on cable to watch a handful of the 60 channels included in a base package. They don’t need to compete for viewers, and online reve ue pales in comparison to guaranteed money
I know after the success of breaking bad and mad Men, AMC launched a sister channel, and would only sell its as a bundled package (cable providers couldn’t buy AMC on their own), and instead of charging say, $1 for amc, they wanted to charging, I dunno, $1.30 for the whole package. That extra channel did not cost much to produce, but they were leveraging their popularity to try to increase revenue.
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