Pretty easy really, it's sort of like how your cable company works. Your cable company has a central site where they get transmissions (satellite) from all the channel content providers. They take all these channels in, and then blast them out over the cable.
This works the same way, except...instead of blasting it out over the actual cable, these products blast out the channels over the Internet where software on your PC can receive them and show the TV on your computer screen, and it's WAY cheaper than cable!