At about the same time that VCRs and rental stores were changing the world of TV in the home, another phenomenon was changing network television. That force is called cable TV, and it really took off in the 1980s.
Cable TV had been around for a long time. People in the mountains would use cable just to get TV reception. A company would put big antennas on mountain tops and then run cables down to the houses in the valleys so that people could watch TV. The same technology also worked in big cities where skyscrapers blocked reception.
The problem was, these early cable systems were small and the quality was bad. They used coaxial cable from the antenna all the way to the house, and the coax needed an amplifier every thousand feet or so. This meant that there might be 30 or 40 amplifiers between the antenna and the customer, and each amplifier degraded the signal a little bit. By the time the signal got to the house, the picture often looked terrible.
Technology solved this problem however. Fiber optic cables came into the market, and cable companies started using them for all the trunk lines in the system. The number of amplifiers fell from 40, to five or six, and then down to two or three. Because of fiber optic cables, the signal was great and it cost a lot less to deliver it.
At the same time, a whole crop of new "cable channels" started to pop up. CNN, MTV, HBO and many others all appeared in the early 1980s. HBO was a miracle. You paid a small fee per month and could watch dozens of commercial-free movies. MTV brought something totally new for young viewers -- the music video. Teenagers and college students would crowd around TVs to see the newest videos when they came out.
With all this new content, cable TV became a "must have" item. Where there had only been three TV channels before, now there were dozens. New channels popped up all the time, AND you could record all your shows on your VCR and watch them later. It made you feel like George Jetson.
For more information on the technology of cable TV, see How Cable TV Works.