Potential Impact of Cable Growth on Television Broadcasting

Although future growth of cable television promises more diverse programming, it also poses some threat to over-the-air television broadcasting stations. A computer model is developed to compare station audience, revenue, profit, and local programming expenditure, with and without cable. A very strong set of distant signals is assumed, and cable penetration is assumed to reach ultimate levels (about 40 percent to 45 percent nationwide). Results indicate that concern over the impact of cable is misdirected on several counts: (1) Reduction in aggregate station revenue due to cable is small enough to be balanced by one year's typical revenue growth. (2) Stations in larger markets would, on the average, be little hurt by unrestricted cable growth. (3) Stations in smaller markets would suffer severe revenue reduction due to cable at ultimate penetration. (4) At least through the 1970s, nonnetwork UHF stations would gain substantially, because cable puts them on the same technical footing as competing VHF stations.