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Besides basic programming, cable offers special premium channels featuring recent and classic Hollywood movies as well as original movies and popular series like HBO’s Entourage and Showtime’s Dexter—all with no advertising. Premium services have also proved innovative. They include pay-per-view (PPV) programs; video-on-demand (VOD); and interactive services through which consumers can bank, shop, play games, and access the Internet. Subscribers pay fees in addition to charges for basic cable.

Innovative Content: HBO

HBO—the oldest premium cable channel—pioneered original, uncut movies and series on cable. Its most successful and acclaimed shows include The Sopranos, The Wire, Curb Your Enthusiasm, and True Blood. Since the late 1990s, HBO has regularly garnered more Emmy nominations each year for its original programs than any of the traditional networks. Its widespread appeal and acclaim have even inspired basic cable services to produce original programming, such as Bravo’s Project Runway, USA’s Burn Notice, TNT’s The Closer, and AMC’s Mad Men. HBO remains the dominant premium channel, selling monthly subscriptions to more than twenty-eight million homes as of 2009. HBO and Cinemax (the second-highest rated premium channel) bring more than thirty-eight million premium subscribers to parent corporation Time Warner.

Innovative Viewing Options: Pay-per-View and Video-on-Demand

In addition to presenting fresh types of programming, premium cable has introduced innovative viewing options to customers. Pay-per-view (PPV) channels came first. These offered recently released movies or special one-time sporting events (such as a championship boxing match) to subscribers who paid a designated charge to their cable company. In the early 2000s, U.S. cable companies introduced a new pay-per-view option for their digital customers: video-on-demand (VOD). Through VOD, customers choose among hundreds of titles, then download a selection from the cable operator’s server onto their cable TV box hard drive for free (for access to older TV series or movies) or up to four dollars (for more popular recent movies). They watch the movie the same way they would watch a video, pausing and fast-forwarding when desired. Now, the largest cable companies and DBS services also offer digital video recorders (DVRs) to their customers.