Basic cable has traditionally been something of the ugly stepchild of the television world, the place to see reruns of Seinfeld and old movies you were never that excited to see even when they were in theaters. And it certainly wasn't the place to see award-winning or critically favored original shows.

And yet when the Emmy nominations came out in July, the belle of the ball was Mad Men, a show that airs on AMC, a small cable channel known best, until recently, for packaging and airing classic American films like Casablanca and A Fistful of Dollars. Mad Men, which chronicles the lives of hard-charging ad execs in the early '60s, received the most Emmy nominations of any drama on either broadcast or cable this year with 16, and countless, breathless articles have been written praising the series and its attention to period detail.

While no one was looking, cable—and not just pay channels like HBO—have become the new network TV, the place to watch the most creative, talked-about, and addictive dramatic series. While ratings typically fall far short of broadcast hits, these original series deliver especially attractive audiences to advertisers and help to establish a valuable brand identity for their networks. And as they continue to siphon off broadcast audiences, it may well be difficult for the broadcast networks to ever recover.

The person responsible for finding and developing Mad Men for AMC, even after HBO and Showtime passed on it, is Christina Wayne, the channel's head of original scripted programming since 2005. And she says it's unlikely a show like it would ever have been developed at a broadcast network.

On cable, "stories take a longer time being told, they focus on character, and it's not procedural closed-end stories week after week," Wayne says. That greater creative freedom, she believes, helps explain the success of Mad Men and other new basic-cable series (see our head-to-head comparison of the programming chiefs at the major cable networks).

"The TV landscape has obviously changed," adds Charlie Collier, AMC's general manager, pointing out that the broadcast networks' focus on cheaper-to-produce reality programming and game shows have left the door wide open for the cable networks to establish themselves with high-end original programming.

Things first started to shift in 2002 when FX started airing its gritty police show The Shield, and then followed that up the next year with Nip/Tuck, its look at the unseemly lives of two plastic surgeons. Now, AMC is one of several basic-cable channels, including FX, USA, TNT, and the Sci-Fi Channel, that have joined premium-cable networks HBO and Showtime in rolling out original scripted series. More and more of the TV industry's creative energy—not to mention critical acclaim, A-list stars, and ad dollars—are now on cable.

And the change seems to suit audiences just fine.

"Viewers are increasingly not differentiating between the Big Three and the Big 300 channels they have on their cable systems," says John Rash, senior vice president and director of media analysis at Campbell Mithun, an ad agency based in Minneapolis.

Similarly, Michael Wright, who oversees original content for TNT, TBS, and TCM, three of Turner Broadcasting's six cable properties, says that the economics of developing a hit show on broadcast become much more difficult with so much competition and splintering audiences.

"In a 300-channel universe, if your business model is based on aggregating 10 to 15 million viewers [a week] to achieve success, that's tough," Wright says.

From Wright's perch, however, the world looks grand. TNT's The Closer, starring Kyra Sedgwick, is averaging well over eight million viewers per episode this season, making it the top-rated show on cable and rivaling even some broadcast hits for ratings. Saving Grace, another breakout TNT original, starring Holly Hunter, averages 4.6 million viewers.

Some of AMC's original creations have been even bigger in the ratings. The first script Wayne developed for AMC was Broken Trail, the network's first original miniseries, starring Robert Duvall in a revisionist Western. The series aired in 2006 to an audience of 9.7 million, making it the second-highest-rated basic-cable-network miniseries of the previous 10 years.

When Broken Trail was being developed, Wayne was the only staffer in the original-programming department. The network was looking at original programming as a way to differentiate itself and produce cinematic content that was consistent with its focus on classic movies (Mad Men, as well as several other AMC original shows, is actually shot on film, which is unusual for a television show). As soon as Broken Trail became a hit, Wayne had a mandate to develop more shows.

Today, Wayne has a staff of seven and is juggling a development slate of 30 series and miniseries. She's now several weeks into production on the network's next miniseries, The Prisoner, which stars Sir Ian McKellen and Jim Caviezel and launches in the summer of 2009.

"What we wanted to do was link up with the movies that we have and provide programming that was cinematic," she says. "If we can give viewers that one-hour movie experience every single week, it provides destination viewing."

Indeed, because they create viewer loyalty and help cable channels establish brand identities, original scripted shows are often an excellent investment. "You can go spend $20 million on billboards to sell the network, but a hit show does that for free," says Turner Broadcasting's Wright.

Of course, original programming is far from free, often costing tens of millions of dollars to develop and produce a new series. But Wright's point is that, aside from generating advertising revenue, hit shows help to call attention to a network and its other programming as well.

"You get that halo effect" for the network, says Steve Kalb, senior vice president and director for broadcast media at MediaHub, ad agency in Wenham, Massachusetts.

And cable networks, with less hours of original programming to fill, have an important advantage over the broadcast networks. They can get away with ordering only 8 to 15 episodes for a season, which translates to a shorter filming schedule that is attractive to top-quality actors. Broadcast networks typically order as many as 25 episodes per season.

And once a hit show is established and viewers increase—even if the ratings were small to start off with—the investment pays dividends as advertisers come flocking.

Mad Men, for example, averaged just under a million viewers per episode after it debuted last summer. Four episodes into the new season, it's averaging 1.4 million. Though the audience is small compared to broadcast hits that average many times that number, it's a strong increase and one that advertisers have responded to. And AMC has successfully pointed to the classic films in its library, leading into the premiere of Mad Men with a highly-rated showing of classic gangster movie Good Fellas and running a month of films about antiheroes to go with another original show, Breaking Bad, that led to the network's highest-rated month ever.

For Wayne, it's not a surprise that Mad Men has gotten the attention and accolades it has, despite some initial concerns that viewers wouldn't respond to a period 1960s drama.

"We always felt that if it was something that connected in some way to us and resonated with us, it would be a fit with the channel," Wayne says.