It can be argued that the main purpose of commercial television is to provide a link between audiences and advertisers. It is certainly true that without the income generated by commericals, television production as we know it could not exist – TV is too expensive a medium to be funded purely from satellite subscriptions or licence fees.
That said, the practice of measuring TV audiences needs to be an accurate one, as the advertisers buying broadcast space need to know who is watching and if the audience for a particular TV programme is also the target market for their product. Therefore the TV ratings that you read about, which lead to weekly top 10s, aren't just there to congratulate TV producers on their success - they are a sales pitch to advertisers, who will pay a premium price for commercial slots in the top rated shows. Needless to say, a show which slips in the ratings will not command much money for slots, and is often axed in favour of a more profitable option.
However, this does not mean that television should simply offer top rated talent shows and soap operas. Television, as a medium of mass communication, broadcasts a wide range of programming which is designed to appeal to a wide ranging audience - thus delivering different groups of people to the advertisers at different times of the day. Broadcasters can't please everybody all of the time, and they have to find a way of providing a variety of programmes so that, at some point, most people will be able to watch something that interests them.
In countries where the state provides a television service, there are regulations to ensure that a wide range of audience needs are met. Therefore state TV broadcasters have to provide a minimum amount of educational, religious and news programmes. Some countries also have quotas to ensure that a certain amount of locally produced programmes are broadcast. Imported programmes are usually cheaper than homegrown ones, but are less popular with audiences. Local programmes also provide employment for the local TV industry, and have significant cultural value.
Knowing who is watching at any particular time is essential for any TV station. They need to know what their audience share is (ie the proportion of people watching all TV stations in that area at that time who are tuned in to them) and they need to know the demographics of that audience in order to sell advertising space – and to sell it at the best price. It's not an exact science, and for many years has involved taking a small sample of TV-watching families and viewing the data gathered as typical of the population as a whole. Technology (mainly the use of social media and "second screen" experiences) is pushing change in the way audiences are measured.
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You can find US TV Ratings here, UK ones here. here.
As audiences find more ways to receive TV shows, counting them becomes more complicated.
Cable television, because it offers so many different channels, is an example of narrow rather than broadcasting. Cable TV segments its audiences by interest, and offers programming of a limited type on each channel. Therefore one channel may show nothing but sport, another nothing but documentaries. With the advent of digital TV there are many more specialist channels available to audiences - over 500 in America! The future of television is probably in narrow rather than broadcasting, as audiences become very selective about what they watch and when they watch it. Devices such as TiVO mean that you can watch what you want, rather than just watching what is on at the time (time-shifted viewing).
TV audiences now have more choice than ever before about how they consume TV. One of the biggest recent developments has been 'On Demand', whereby distributors make a huge back-catalogue of titles available to viewers to watch when they like, usually on payment of a monthly subscription fee. This has opened up many possibilities. As well as allowing viewers fresh access to previously-aired shows, many of them dating back decades, it has revolutionised the way in which producers think about making future shows.
Kevin Spacey gave an important speech at the 2013 Edinburgh TV Festival outlining his perspective (as a star and executive producer of Netflix's highly successful House of Cards) on 'On Demand'. He sees it as entirely positive development for television — if executives are brave enough to embrace the opportunity rather than clinging to their old models of production and delivery.
“Through this new form of distribution, we have demonstrated that we have learned the lesson that the music industry didn't learn. Give people what they want, when they want it, in the form they want it in at a reasonable price, and they'll more likely pay for it rather than steal it. Well, some will still steal it but I think we can take a bite out of piracy.”