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Fees & Programming Lineups |
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Cable TV systems impose a monthly fee depending on the number and perceived quality of the channels offered. Cable TV subscribers are offered various packages of channels one can subscribe to. The cost of each package depends on the type of channels offered (basic vs. premium) and the quantity. These fees cover the fees paid to individual networks for the right to carry their network as well as the cost of operating and maintaining the cable TV system so that their signals can reach subscribers homes.
Additional fees and taxes are often tacked on by local, state, and federal governments. The fee the cable TV system must pay to a cable TV network will vary depending on whether it is a basic or premium channel and the perceived popularity of that channel. Because cable TV systems are not required to carry any basic cable channels, they often try and negotiate the fee they will pay for carrying a channel. Thus more popular networks have been able to command much higher fees then less popular networks. The fees paid to basic cable networks has a benefit in that advertisement breaks on basic cable are either absent or their number and duration are far lower than on broadcast TV, where ads make up around 25% of programming in the U.S. Most cable systems divide their channel lineups into three or four basic channel packages. A must-carry rule requires all cable TV systems to carry local broadcast stations on their lineups. Cable TV systems are also required to offer a subscription package that provides these broadcast channels at a lower rate than the standard subscription rate. The basic programming package offered by cable TV systems is usually known as basic cable and provides access to a large number of basic cable TV networks, as well as broadcast channels, and local-access television channels. Some systems refer to this package as expanded basic, with their most minimal package being referred to as basic cable. In addition to the basic cable packages, all systems offer premium channel add-on packages offering either just one premium network (e.g. HBO) or several premium networks for one price (e.g. HBO and Showtime together). Finally, most cable systems offer pay-per-view channels where users can watch individual movies, live programs, sports, etc. for an additional fee for single viewing at a scheduled time. Some cable systems have begun to offer on-demand programming, where customers can select programs from a list of offerings including recent releases of movies, concerts, sports, and reruns of TV shows and specials and start the program whenever they wish, as if they were watching a DVD or a VHS tape. Some of the offerings have a cost similar to renting a movie at a video store while others are free.
Starting in the late 1990s, advances in digital signal compression (primarily Motorola's DigiCipher 2 technology in North America) have given rise to wider implementation of digital cable services. Digital cable provides many more television channels over the same available bandwidth, by converting cable TV channels to a digital signal and then compressing the signal. Currently, most systems offer a hybrid analog/digital cable system. This means they offer a certain number of analog channels via basic cable service with additional channels being made available via digital cable service. Thus subscribers wishing to have access to digital cable channels must have a special cable box to receive them. Additional subscription fees are also usually required to receive these digital channels. Digital cable channels can offer a higher quality picture than their analog counterparts though digital compression has a tendency to soften the quality of the television picture, particularly of channels that are more heavily compressed. Many cable systems operate as local monopolies in the United States, as cable companies typically receive exclusive rights to serve a region as a result of a franchise agreement with a local government. In some areas that is changing as competition has been allowed to enter the market, including, in some cases, city run cable systems. The rise of Digital Satellite Systems, which provide the same type of programming using small satellite receivers, has also provided competition to cable TV systems.
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