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“Will someone out there tell me why the Market doesn't seem to be working in Cable News? It's as if everything I've ever learned about markets is invalid”

But the market IS working on cable news.
From News International’s(parent company of Fox) earnings report:
Wednesday, Aug 05
“”******Chairman Rupert Murdoch singled out the success of Fox News Channel in his release:

The FOX News Channel (FNC) operating income, as compared to the prior year, increased 50% for both the fourth quarter and the full year, primarily from increased affiliate revenues. For the full year, FNC primetime ratings were up 45% compared with the same period a year ago.
And Fox News continues on a ratings tear this week. On Monday night and again last night, FNC beat the combined prime time averages, in both Total Viewers & A25-54 viewers, of MSNBC and CNN.

In fact last night, “The O’Reilly Factor” (on cable TV) averaged 3.67 million Total Viewers at 8pmET topping the 8pm average of 2.91M on ABC (on broadcast TV), with “Superstars.”******
http://www.mediabistro.com/tvnewser/fnc/fox_news_a_bright_spot_in_bleak_news_corp_earnings_report_123607.asp

Fox News IS making record profits. And Fox News profits DID go up by 50% for both the last quarter and for the entire year, despite the worst recession for over 70 years.
That's market forces working right there for ya. Give consumers a product they want, and you make good money.

Okay Joe, You convinced me that Fox is kicking *ss. I already know this. I'm one of those watching and I try to make a point of buying products from advertisers.

But the flip side of this is how are CNN and MSNBC hanging on. I'm particularly interested in MSNBC as I consider them the worst of the worst.

Nobody watches that Network other than to occasionally check in to see if the train wreck is still ongoing. Can they be making a profit? How can they possibility pay Olbermann 9 million/year? (can this possibly be true?) Madness! Have they found a way to make money with very low ratings? This would be my best guess. If not then who is bankrolling this organization? I'm more interested in this than Fox's success. That's easily understood.