re: Why wouldn’t network TV want as many viewers as possible?

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Way less than $2 a month for locals. The only channels getting more than $1 a month per subscriber are ESPN, Fox Sports, and NFL Network.

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But you get the point right?

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The only channels getting more than $1 a month per subscriber are ESPN, Fox Sports, and NFL Network.

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Actually all of your information seems to be at least 5 years outdated, because even 2 years ago there were several more cable channels charging more than $1/sub.

The Disney Channel was at $1.61 in 2017, probably approaching $2 by now if not already past. Fox News was at $1.55, likely over $2 by now. USA is over $1, as is TBS. CNN is approaching $1, and TNT is over $2. And of course the ones you mentioned, FS1 was at $1.30, and ESPN is well over $8 by now. Even ESPN2 is over $1, and SECN is likely approaching $1 if it isn't more already.

As for the locals, these media companies keep buying them up to increase their negotiating power. These are billion dollar companies in their own right, and several of them own dozens to hundreds of local stations. Every year these retransmission contracts are up for renewal, and the fees keep jumping by huge amounts in the range of 20% on up to doubling or more. The number of station blackouts keeps growing, but they know the cable/satellite/streaming companies eventually have to cave because they have to keep their own customers.

The internet feed is operated by your cable provider not the national network. If you live outside of new york or LA, a local station is broadcasting the signal. The local broadcast company has a contract with national network. The local broadcast company also feed your cable service with programing. As part of the contract, the local affiliate generates revenue selling local ad time.

I have no idea how the contract between national network, local affiliate, and cable company works. I do know if a local business buys ad time from a local affiliate, the local business owner wants to know demographic information about the audience he/she is reaching.

In other words, it's not that the don't want as many viewers as possible. They just have to account for all the viewers.

Local stations spent a lot of money on broadcast towers. Use them.