The Business of Television
Over-the-air commercial stations and networks generate the vast majority of their revenue from advertisements. According to a 2001 survey, broadcast stations allocated 16 to 21 minutes per hour to commercials. Most cable networks also generate income from advertisements, although most basic cable networks also receive subscription fees. However, premium cable networks, such as the movie network HBO, do not air commercials. Instead, cable-TV subscribers must pay extra to receive the premium networks.
In the days of broadcast television, networks allocated a portion of commercial time for their shows to the local affiliates, which allowed the local stations to generate revenue. In the same manner, cable-TV system operators generate some of their revenue by selling local commercial time for each cable network being broadcast. The other main source of revenue for the cable-TV operators is subscription fees.
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