The ratings game has changed drastically since the dawn of the video cassette recorder (VCR). The VCR enabled time-shifting. Prior to the VCR all television viewing was what I like to call "appointment viewing." Your show came on at a certain time and you made an appointment in your busy daily schedule to sit down and watch your show at that time. The VCR enabled people to record their shows and shift them to view later. In my own life I would often record shows during the week and watch them all on the weekend. I had a separate tape for each day of the week and each morning before leaving for work I would pull the previous day's tape and replace it with the current day's tape. Eventually I developed a system of having 4 tapes for each day of the week, labeled A through D, so it would be a month before I might have to record over something. In any case I no longer had to set an appointment to watch anything. I watched a show when I was ready to watch it, not when a networked dictated that I should watch it.
The VCR complicated things greatly in the ratings game because it meant tv networks could no longer guarantee eyeballs for ads. See, the advertising is the thing. The shows we all love are just convenient wrappers for the ads. The shows are used to set ad rates so the networks can make money and pay for content. The ads are responsible for paychecks. If you can't guarantee that people are watching your shows then you can't sell ads easily. TV ratings are still built on the daily ratings, how many people made an appointment to watch a show on the day it aired. The dailies are important because they represent people who didn't skip through the ads. Next in line are the people who viewed a show within 24 hours of its original airtime. Next are those who viewed it within 3 days of its original airtime. Last in line are those who viewed the show within 7 days of its original airtime. This remains true in the digital video recorder (DVR) era. They are referred to as the DVR+1, DVR+3, and DVR+7 ratings for any given show. A show can be quite popular in DVR viewing but if it's weak in same-day viewing it probably won't survive. Why is this the case? It's all about the ads. DVR viewers generally skip commercials, so ad rates can't be set from DVR views. This is unfortunate since there are some shows that see their audience size increase by 100% in the DVR+7 ratings, but they could still be canceled.
A comparison I've often seen with tv shows is that Show A beat Show B in the 8PM Thursday timeslot, so Show B is probably going to get canceled. From what I've read from various sources that's probably not an accurate assessment. It doesn't matter so much that Show B lost to Show A in head-to-head competition on Thursday night. What does matter is how Show B has been doing compared to other shows on the same network. If Show B lost to Show A head-to-head but Show B is still one of the strongest shows on that particular network Show B is probably going to be renewed for another season. If push comes to shove Show B might be moved to a different night where it could potentially get a bigger audience. So if your show keeps getting trounced by another show in the same slot on a different network there's no reason to fret unless your show is dragging the bottom on its network. You generally don't dump your best player.
Cable shows are less likely to get canceled due to low ratings than broadcast network shows. Why is this the case? As always, it's a numbers game, but in this case it's a scheduling game. The top 4 broadcast networks have primetime schedules that are completely full. They have shows in every slot for every day of the week. If a show isn't doing well it's better for the broadcast network to pull it off the air and try something else in that slot to see if that other show does better. You'll often notice that every broadcast network has a lineup of midseason replacements that they announce even before the new season has started. They know they're going to have to cancel some shows and they already have the replacements set. For the cable networks there are huge gaps in the primetime schedule, with the possible exception of the USA Network. Most cable channels don't have every primetime slot filled with new original programming for every day of the week. This means if a show does poorly they can typically afford to leave it on the air longer because it's not taking up a slot that could be used for another show which might pull better ratings. Cable shows are simply less likely to be canceled because the network probably doesn't have something else with which to fill the slot. If a cable network had a stable of midseason replacements lined up you could bet they would use them. Since they don't, they can't.
The last bit that I'll add here on the ratings game is that networks tend to air their strongest shows on Sunday and the shows tend to get weaker as the week progresses. You'll never see a strong show on Saturday unless it's a rerun of the show from earlier in the week. Why is Sunday the big night? Everyone is home. The networks know they're more likely to get "appointment viewers" in front of the tv set on Sunday night than any other night of the week. Viewership numbers tend to be highest on Sunday and lower throughout the week. If your favorite show is on Sunday night the network probably has confidence in it. If it airs later in the week, things could go either way in terms of renewal versus cancellation.
That's it for now, go watch some tv.
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