and hockey (NHL) leagues for the one or two franchises per sport in their service area.
21
Premium programming networks are advertising-free entertainment networks, typically
offering full-length feature films. Examples include equally familiar networks like
HBO and Showtime.
As of the 2010s, US households have access to many pay-television channels. 2011
data from Nielsen’s FOCUS database on the population of US cable television lineups
indicates that there are 282 television networks available to at least 1% of US households.
Figure 7.7 reports the distribution of channels offered on Basic, Expanded Basic, and
Digital Basic cable services across the 6000 systems offering service in 2011.
22
The dis-
tribution is very left-skewed, with a (weighted) mean of just under 160 channels. Satellite
and telco systems also offer hundreds of pay-television channels.
Tables 7.2 and 7.3 report aggregate statistics for the largest US pay-television net-
works for which data are available. Reported in each table are measures of network costs
0
0.01
0.02
0.03
0 50 100 150 200
Density Weighted mean
Figure 7.7 Distribution of cable channels, 2011. Notes: Depicted is the distribution of pay-television
channels offered on Basic, Expanded Basic, and Digital Basic cable services across the 6000 systems
offering service in 2011 from the Nielsen FOCUS Database. The mean, weighted by the number of
subscribers served by each system, of 159.9 is depicted by the vertical line in the figure.
21
The revenue these networks provide to individual sports teams are an increasingly important part of teams’
businesses and an important driver of outcomes in sports markets. For example, TWC SportsNet Los
Angeles recently agreed to pay the US Baseball team the Los Angeles Dodgers $8.35 billion to carry
the team over a 25-year period.
22
To approximate the number of channels available to a household selected at random in the US, the data
are weighted by the households served by each cable system.
280
Handbook of Media Economics
Table 7.2 Top-25 cable television networks, 2012
Prog.
expenditure
($ million)
Avg. prime
time rating
Avg. 24-h
rating
CPM
($)
Net
advert.
rev. Subs.
Avg.
affil. fee
Affiliate rev.
($ million)
Total rev.
($ million)
Fee rev.
share
Cable networks
ESPN 5333 0.78 19.3 1770 98.5 5.04 5973 7742 0.77
TNT 1160 0.83 8.8 968 99.7 1.20 1443 2411 0.60
Nickelodeon/
Nick At Nite
429 1.13 6.6 931 99.2 0.55 657 1589 0.41
USA 759 1.02 6.9 1043 99.0 0.68 815 1858 0.44
Fox News 607 0.92 5.0 742 97.8 0.89 1040 1782 0.58
TBS 607 0.64 10.4 895 99.7 0.56 673 1568 0.43
Disney Channel 306 1.28 1.09
MTV 579 0.39 13.1 817 98.1 0.40 476 1294 0.37
CNN 311 0.32 6.2 328 98.9 0.58 686 1014 0.68
FX Network 460 0.55 8.9 509 97.9 0.48 566 1075 0.53
ESPN2 496 0.22 10.4 270 98.5 0.67 792 1062 0.75
Discovery
Channel
171 0.43 10.9 526 99.1 0.35 420 946 0.44
Lifetime
Television
418 0.43 8.0 505 99.5 0.31 366 872 0.42
Food Network 278 0.48 9.8 609 99.4 0.18 218 826 0.26
A&E 397 0.60 5.3 469 98.7 0.28 334 804 0.42
History 302 0.72 4.7 497 98.6 0.25 291 788 0.37
HGTV 257 0.56 7.2 589 98.7 0.16 184 773 0.24
NFL Network 1078 0.19 9.0 129 68.8 0.85 645 774 0.83
Cartoon Network 250 0.87 4.5 462 98.9 0.20 237 699 0.34
ABC Family
Channel
280 0.48 8.4 445 97.0 0.26 298 743 0.40
Syfy 284 0.42 7.8 426 98.0 0.27 312 739 0.42
Comedy Central 290 0.38 9.3 457 98.3 0.17 201 657 0.31
AMC 214 0.46 7.0 362 98.9 0.29 324 686 0.47
Continued
Table 7.2 Top-25 cable television networks, 2012—cont'd
Prog.
expenditure
($ million)
Avg. prime
time rating
Avg. 24-h
rating
CPM
($)
Net
advert.
rev. Subs.
Avg.
affil. fee
Affiliate rev.
($ million)
Total rev.
($ million)
Fee rev.
share
CNBC 209 0.15 9.5 223 96.8 0.30 356 579 0.62
Bravo 268 0.31 11.8 342 94.8 0.23 262 604 0.43
Total top-25 15,746 14.56 14,314 16.23 18,864 33,178
Average top-25 7.6 97.2 0.57
Total cable (198
networks)
24,066 30.10 21,623 41.85 28,361 49,984
Average cable 6.3 46.2 0.57
Top-25 share 65.4% 48.4% 66.2% 38.8% 66.5% 66.4%
Reported are aggregate statistics for the largest US pay-television networks in 2012 for which data are available from SNL Kagan (2014a). Measures of network costs
(programming expenditure), quantity (viewership and subscribers), price (advertising cost per thousand, or CPM, and affiliate fees, if any), and revenue, as well as the relative
importance of advertising versus fee revenue in each channel’s total, are given. Affiliate fees are $ per household per month. Reported here is information for the top-25 most
widely available cable networks, as well as totals for all 198 cable networks for which information is available from SNL Kagan. Top-25 share is the share of the column
spent/watched/earned by the top-25 listed broadcast networks. See also
Table 7.3 for information about Regional Sports and Premium Networks.
Table 7.3 Regional Sports Networks and Premium Networks, 2012
Program
expenditure
Net advert
revenue Subs.
Average
affiliate fee
Affiliate fee
revenue
Total
revenue
Affiliate
revenue share
Regional Sports Networks (RSNs)
Fox Sports RSNs 1483 237 18.8 2.66 1782 2049 0.87
Comcast SportsNet RSNs 758 140 10.5 2.79 833 986 0.84
Yankees Entertainment (YES) 252 67 6.0 2.99 433 510 0.85
Root Sports RSNs 243 58 3.6 2.81 284 346 0.82
Madison Square Garden Network 103 61 4.3 2.71 263 336 0.78
SportsNet New York 214 38 3.8 2.55 219 258 0.85
MSG Plus 90 24 4.3 2.38 224 252 0.89
Sun Sports 168 21 3.7 2.69 207 230 0.90
New England Sports Network 151 31 2.1 3.62 178 213 0.83
Prime Ticket 144 24 3.1 2.36 169 198 0.85
Mid-Atlantic Sports Network 138 27 1.9 2.14 138 168 0.82
SportSouth 55 19 1.3 0.62 65 86 0.76
SportsTime Ohio 60 13 1.2 1.85 65 80 0.81
Altitude Sports & Entertainme nt 52 15 0.7 1.57 56 73 0.77
Time Warner Cable SportsNet/
Deportes
40 6 3.0 2.98 42 49 0.86
Comcast/Charter Sports Southeast 28 3 0.0 0.57 38 42 0.91
Cox Sports Television 18 8 0.6 0.74 16 24 0.66
Channel 4 San Diego 5 1 0.8 0.80 8 9 0.87
Longhorn Network 23 1 2.7 0.27 6 8 0.83
Total RSNs 4025 793 72.3 5026 5916
Average RSNs 1.8 2.41 0.85
Premium Networks
HBO/Cinemax 1632 0 41.5 7.68 3732 4415 1.00
Showtime/TMC/Flix 595 0 76.1 1.64 1473 1564 1.00
Starz/Encore 661 0 56.1 1.93 1259 1310 1.00
EPIX/EPIX Drive-In 217 0 9.9 1.77 206 341 1.00
Total Premium 3105 0 13.01 6670 7630
Average Premium 45.9 3.10 1.00
Reported are aggregate statistics for the largest US pay-television networks in 2012 for which data are available from SNL Kagan (2014a). Measures of network costs
(programming expenditure), quantity (subscribers), price (affiliate fees), and revenue, as well as the relative importance of advertising versus fee revenue in each channel’s
total, are given. Reported here is information on 40 Regional Sports Networks (RSNs), with the 13 Fox Sports, 8 Comcast SportsNet, and 3 Root Sports channels reported
as single groups, and Premium Networks. See also
Table 7.2 for information about the largest “cable television networks.”
(programming expenditure), quantity (viewership and subscribers), price (advertising
cost per thousand, or CPM, and affiliate fees, if any), and revenue, as well as the relative
importance of advertising versus fee revenue in each channel’s total. In
Table 7.2, I report
information for the top-25 most widely available cable networks, as well as totals for all
198 cable networks for which information is available from SNL Kagan.
23
In Table 7.3,
I report information for all 40 RSNs and all 8 premium networks.
24
There is considerable heterogeneity across networks both within and across types. As
suggested above, premium networks only earn affiliate fee revenue, and the remaining
networks earn a mix of both, with the relative importance of each differing by channel.
Overall, cable networks earn the majority of advertising, affiliate fee, and total revenue.
The top-25 cable networks by revenue receive approximately two-thirds of cable net-
work advertising and affiliate fee revenue, despite accounting for less than half of cable
network viewership and only 13% (25 of 198) of the networks for which such data are
available. RSNs, while only relevant in those regions where they carry local sports con-
tent, are nonetheless very important in the industry, with total revenue rivaling national
premium networks.
7.2.1.3 Broadcast (Pay) Television: DTT
In the mid-2000s, television regulators around the world began requiring broadcast
stations to use digital instead of analog technologies.
25
Such broadcasting is often called
Digital Terrestrial Television (DTT).
The Netherlands was the first country to switch, in 2006, and has since been followed
by many more (
ITU, 2012).
26
While economically unimportant in the US, this transition
led in many countries to the growth of multichannel digital broadcast offerings that are a
credible substitute to pay-television bundles offered via other technologies. In some
countries, notably the UK with Freeview, until recently this offering relied solely on
advertising revenues and was thus free to households, while in others, notably France
with Te
´
le
´
vision Nume
´
rique Terrestre, it was a mix of free and pay channels.
The relative importance of cable, satellite, and telcos (IPTV) as distributors of video
programming varies considerably across the world due to the vagaries of the evolution of
23
SNL Kagan, an industry resource, collects information on 198 cable networks, 40 RSNs, and 8 premium
networks (in 4 corporate families). All of the summary statistics reported here rely on this subset of cable,
RSN, and premium channels.
24
For the former I group together the 13 Fox Sports, 8 Comcast SportsNet, and 3 Root Sports RSNs and
report summary statistics for each of these families of RSNs.
25
Transitioning between analog and digital broadcasting must happen simultaneously within broadcasters’
transmission areas to avoid issues of interference, though it can be done either regionally (as in the UK) or
nationally (as in most countries).
26
The US made the switch by 2009, and the UK by 2012.
284
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