Final answer:
Networks earn money through advertisements and subscriber fees, with higher subscriptions leading to higher payments from advertisers and increased revenue from subscriber fees.
Step-by-step explanation:
Networks primarily generate revenue through advertisements and subscriber fees. The more homes that subscribe to a network, the more valuable the network's advertising space becomes. Thus, with higher subscriptions, networks are able to charge advertisers more for ad space, leading to higher payments. Additionally, networks receive subscriber fees from cable companies, which are directly related to the number of subscribers. Each subscriber represents a fixed amount of income from these fees; hence, more subscribers also mean increased revenue from these fees.
Cable networks and satellite services like SiriusXM often operate with different models. Cable networks can receive income from both advertising revenue and subscriber fees, while satellite radio services may charge a direct subscription fee and skip traditional advertising altogether, instead providing ad-free content as part of the subscription. The trends in advertising and how they relate to subscriptions indicate a complex interplay between network reach, advertising strategies, and subscription-based revenue models.