Television Web sites have become an indispensable companion to television networks and stations. Almost all U.S. television networks have established their own Web sites. More than 78% of Web users have visited a television Web site within the past year (Schlosberg, 2000) and at-work television Web site traffic continues to grow (Fitzgerald, 2003). "Enhanced television" is a term used by the television industry to refer to the use of Internet features to improve (enhance) the viewing experience. Cable television programmers believe that the enhanced television features they provided on their Web sites can build viewer loyalty, increase retention, and attract new subscribers (Fahey, 2000; Griffin, 1996).
As a manifestation of the convergence between television and the Internet, television Web sites are expected to create a new world of hybrid media content encompassing e-commerce, information, games, music, movies, and advertising (Arlen, 2000; Baldwin, McVoy & Steinfeld, 1996). Cable television, in particular, seems to benefit the most from creating a presence on the Web with its niche programming and specialized content (Chan-Olmsted & Jung, 2001; Foley, 2000). A Cable Advertising Bureau report shows that cable television network subscribers have a higher percentage of use of their cable networks' Web sites than broadcast networks. For example, the Food Network and ESPN have more than 30% of their subscribers visiting their Web sites during a recent 3 month period (Fahey, 2000).
In light of the importance of television Web sites to cable television networks, this study explores the role of cable television Web sites on the branding and viewership of cable networks. Based on the theories of fandom cultivation and brand extension, it examines the role of television Web sites in facilitating audience loyalty and attracting new subscribers. The researchers surveyed a national random sample of U.S. Internet users on their uses of and responses to Web site features and compared the differences between basic and premium cable/satellite subscribers in their television Web site uses and experience. Such differentiation is important because advertising supports a majority of basic cable networks while subscription fees are the only source of revenue for premium cable networks. Premium cable subscribers' willingness to pay for the content of premium cable networks shows that they demand program quality, accessibility, and choice. With a high turnover (churn) of premium cable subscriptions' premium cable networks can use their Web sites to offer additional values to current subscribers and provide easy sampling of program offerings to nonsubscribers.
Significance of the Study
Subscriber loyalty is especially important for cable television networks because the majority of their revenues come from subscription fees. With the advent of 339 national cable networks in the United States (NCTA, 2004), the competition for cable subscribers and system operators' support is fierce. The Web has become an important brand extension platform for cable networks to strengthen viewer loyalty and attract new subscribers.
From the perspective of the cable industry, the findings of this study might substantiate the strategic value of Web-based enhanced television features on branding and television commerce. Because the cost in developing and maintaining enhanced television features such as simulcasting and interactive real-time games on a Web site is high, it is necessary to take a closer look at the Web site's returns on investment. Cable television networks may assume their Web sites can attract nonsubscribers and their subscribers will use their Web sites to enhance their viewing experience. Yet how many television viewers are aware of these Web site features and utilize these features on these Web sites is relatively unknown. In fact, an overly optimistic projection of audience usage and a me-too strategy often lead to excessive Web investments and result in downsizing or adjustment of online business strategy. …