Okay so we buy their tv service.. Do they make any money off of advertisements on the tv stations they show (abc) for instance. Or will only abc make money off of those advertisements? Also does Abc pay comcast to be on their tv guide?
Contrary to the previous answer, cable companies sometimes do make money selling advertisements. The arrangements between cable companies and content providers are complex, and there isn't one single standard. With respect to large broadcast networks (like ABC), the cable company probably doesn't sell ads. That is because any cable company has to have ABC and ABC can pretty much dictate the terms on which it will allow its programs to be shown. However, arrangements with smaller networks often involve "barter." The content provider (perhaps Lifetime, or Oxygen or Spike) sells some advertisements on its own, but also makes time available during its shows for the cable company to broadcast advertisements. They will have two or three minutes of "blank space" during the program -- the entertainment program isn't being shown during this period and the content provider isn't running ads. The cable company sells advertisements to be shown during the "blank space" period. You can probably recognize the commercials broadcast during the "blank space" period, because they are usually local commercials -- relating to a local restaurant or retailer, rather than a national advertiser. You might wonder why a local business is running an ad on a nationwide network. It isn't. It is running an ad on a local cable station that is being shown during a broadcast on a nationwide network.
The cable companies like this arrangement because they can make money selling ads. The content providers like this arrangement because they provide incentive for the cable company to run their programs without actually costing the content provider any out-of-pocket cash.