(7 of 10)
So far, relatively impartial studies indicate that all this poses little threat to the networks. Cable appeals to viewers uninterested or only mildly interested in the networks' sitcoms, cop shows and soap operas. Cable fans tend to be older than the Three's Company-Happy Days buffs; Showtime, HBO's biggest rival in pay-cable programming, aims many of its specials at an audience aged 40 to 45. A 1978 survey by Young & Rubicam and A.C. Nielsen Co. found that people whose sets are hooked to cable have highly "fragmented" viewing habits. They switch a lot from channel to channel rather than keeping their eyes glued to one for hours. But the survey concluded that viewers do not tune out network shows to tune in cable. Rather they watch cable at times that they otherwise would have the set turned off. Ratings for network shows tended to be quite as high in cities where they faced cable competition as in areas that cable has not yet reached. Nor is cable cutting into the flow of network advertising dollars ($4.1 billion last year). Pay cable, of course, makes the absence of commercials one of its main selling points. The advertising on basic cable is heavily local, though a few national advertisers do appear.
Talking publicly, some network executives complain that cable may take away so many viewers and dollars that the networks may not be able to afford their expensive news-gathering operations and may even be outbid in the future for such attractions as the World Series and Super Bowl; viewers who now see them free would then have to pay to watch. Speaking privately, however, other network bosses often boast that their operations so dwarf those of any cable operator that for the moment they can loftily ignore cable. Nonetheless, predicts HBO's Levin, as cable presents better programming, "it will be harder for the networks to aggregate the kind of audiences they are accustomed to." In other words, the hot new network sitcom of, say, 1985 may draw a few million fewer viewers than the 50 million who now watch Mork & Mindy, and the networks may have to charge less for each minute of prime commercial time.
Cable operators do face some serious obstacles to further growth. The cost of wiring major cities, where cables cannot be strung from poles but must be run underground, is extremely high (as much as $100,000 a mile). Partly for that reason, Chicago does not yet have a cable system and Manhattan is the only one of New York City's five boroughs where viewers can watch cable TV.
The high mobility of the U.S. population is a double source of frustration to cable operators. About 2% of cable subscribers disconnect from the service every month; most are people who move and have to be wooed to cable all over again in their new homes. Also, someone moving into the house or apartment of a person who had cable service finds it a relatively simple matter to hook up the wires again and watch cable TV for free; only the most elementary knowledge of electronics is required. The National Cable Television Association estimates that, besides the 14.5 million paid-for sets, 1.5 million other sets are hooked to cable illegally, and their owners' nonpayments cost cable operators $126 million worth of revenues a year—an ironic tribute to cable's popularity.