Variety (November 1957)

Wednesday* November 13, 1957 PBriEKy TOIXYISIOX 27 RKO 0&0 (4), Feevee & ‘Coexistence [O’NEIL BEATS TOM-TOM FOR .TOLL} RKO Teleradio Pictures, whose holdings include four tv. sta¬ tions, plans to file with the Federal Communications Commis¬ sion for authorization to participate in toll-tv Jests. Prexy Thomas F. O’Neil, the first major broadcaster to come out solidly in favor of feevee, contended in a policy statement that free broadcasting and subscription tv could live side by side. In an ap¬ parent swipe at broadcasters opposing toll tv, O’Neil rejected “prophets of doom," saying toll tv is “inevitable" and could be utilized to the advantage of broadcasters and the public. He came out in opposition to wired toll tv methods, maintaining there. Were “no sound economic reasons” for wiring homes when “an efficient system of air broadcasting already exists.’’ O’Neil indicated that the RKO Teleradio stations would attempt to employ a number of proposed tv systems, without mentioning any by name. The RKO o&o’s consist of WOR-TV, N.Y.; KHJ-TV, Los Angeles; WHBQ-TV, Memphis; WNAC-TV, Boston, and a major interest in CKLW-TV, in the Detroit-Windsor market. ’ > O’Neil's position stems partially from fits motion picture inter¬ ests, many Hollywood studios viewing toll tv as a potential boxof¬ fice bonanza for first-runs and a possible better market for rerun features compared to free broadcasting. _ Fresno Women s Clubs Downbeat Toll, Bob Lippert’s Temperature Drops FAVORS TOLL-TV, BUT ONLY OVER AIR Fresno, Nov. 12. -+| Increasing consumer' opposition ’to pay-as-you-:see home service and difficulties in collecting the tariff from customers who are already serviced are cooling the enthusi¬ asm of a number of top- circuit execs for home-toll entertainment. In the forefront of those who have lost their optimism is Robert L. Lippert, head of the 32-theatre Californian-Oregon loop bearing j his name. ! Owner of five drive-ins in the.' Fresno area, Lippert declared last; week that he is withdrawing his ■application for a home-toll fran¬ chise there, following .unanimous objection to any form of p&y-as- you-see tv voiced by 22 women representing various Fresno, clubs and organizations. He conceded he was “shocked" at the unanimity and intensity of the opposition from the femmes and others. After hearing such ad¬ verse comment the circuit chief said any pay-tv move “could be an expensive experiment—Fd rather. | have someone else experiment" L ; ppert quoted’ the women as sav¬ ing that the average person has to budget himself, there is no room for pay television. What’s now free they want to keep free, .they ar¬ gued. “I realize now," he added, “they don’t want pay-tv in any form, and it’s dead as far as I’m concerned.”. - He pointed out that the Fresno Council hasn’t even set a date for further hearings as a result of tlds opposition. It merelv indi¬ cated that It would be guided by the policy Set forth bv the Cali¬ fornia League of Municipalities, Durine the Council meeting Fresno theatreowner said he had talked to Henry S. Griffing, prez of Video Independent Theatres in Bartlesville, Okla., where a Jgrrold cable-tv test has been underway for the last two months. The ex- hib quoted Griffing as saying he was having lots of troubles, par¬ ticular! v on collections. Griffing, the Fresno theatreman said, told him he shortly nlanned to switch to Skiatron or Telemeter so as to have a better collection svstem since a lot of people didn’t like the flat monthly fee called for in the. original setup. Among those at the meeting were Don Andersoh of ^Jerrold Electronics, who told the* Council he’s forming the San Joaqtrtn En¬ tertainment Co,, which will have concrete proposals for toll-tv. An¬ derson had no comment on Grif- fing’s alleged displeasure with de¬ linquent subscribers. He said his company planned to proceed with plans to present a formal applica¬ tion for a franchise. Lippert’s was the first applica¬ tion to be made in Fresno. It had been his intention to test toll-tv in March, when such tests have been approved by the FCC. Denton Artie Opens Deiiton, Tex., Nov, 12. 'Remodoled Fine Arts Theatre opened to capacity crowd with the British ‘‘Doctor at Large,’* starring Dick Borgarde. Performance was . for Denton Chapter of the Ameri¬ can' Association of' University Women, which received all the proceeds. -—-'Showhouse is operated by Trans- Texas Theatres Inc. Milton Over¬ man is manager. Chicago, Nov: 12. Pay-television issue landed on the City Hall agenda here last week. Measures pro and con are currently facing the City Council. City Clerk John C. Marcin last week received a request from Tele- Movie Development Co. to be al¬ lowed to set up a closed circuit pay-as-you-see franchise here. At approximately the same time, a motion was introduced before the Council by Alderman Patrick Pet- rone to outlaw any form of home- toll in Chicago. Tele-Movie Development is seek¬ ing to install a- system akin to that operating-in Bartlesville, Okla. on a monthly payment basis. Tele- Movie’s counsel, Harrison W. Hertz- berg, entered the request “to con¬ struct and operate" a pay system throughout the city in the form of a letter. See Indie Pay-TV in- A AP Big-Mkt. Nix The 30 to 35 tv markets Where AAP is Withholding the Warner Bros, features from commercial tv so that they might perhaps sell them to toll video operators are all four-station cities or their equiva¬ lent, it's been learned. The tele¬ film distribbery refused'to disclose the market last week when the story first broke. The cities that don't actually have four stations apparently qual¬ ify just the same. In Kansas City, for instance, there are only three outlets, but there is a St. Joseph, Mo., channel which gets into the market nevertheless. AAP is said to have priced the Warner pix so high that none of the K. C. stations could afford them, instead of just withdrawing them from the. mar¬ ket for possible feevee use. AAP approach is geared to the premise that every four-station market hds one static nnot affili¬ ated with a network, and that those stations, due generally to a short¬ age of advertisers, are ripe for an approach by pay-tv entrepreneurs. ' Frisco Fights Toll 1 ^—; Continued from page 1 100-theatre Naify circuit and is generally regarded as the Skouras man on the Naify board. Said Childhouse: “Pay-tv is not progress, it would take us back¬ ward.” He compared pay-tv attach¬ ments to parking meters, but said that where cities got proceeds from parking, only a small handful of people would profit from entertain¬ ment meters^-Ue oredicted; “When pay-tv comes in 90% of the enter¬ tainment the public now enjoys free will move over.” He claimed it would shut thea¬ tres, cause unemployment, griev¬ ously hurt hotels, restaurants and downtown stores and by the thea¬ tre shutdown cause cities to lose more in taxes than they’d get for their pay-tv franchises. Childhouse declared: “Legitimate shows would cease to exist outside New York. It wouldn’t pay them to take shows on the road.” His association is opposed to any test of oay-tv —“let them test it in Bartlesville. Okla." Most significant., he said the as¬ sociation was starting a camoai^n to “Inform” the public, to get the public to write letters to editors, mayors, councilmen, city super¬ visors. At meeting’s end each per¬ son attending was given a kit and a list of Frisco snnerv'sors. These persons from outside the city limits of Frisco were given lists of all Northern California mayors and councilmen. Must Convince Public, “We have to tell the public our side,” he said, and asked each per¬ son to ask at least five friends to write 5ft-to-l 00-word letters of protest to editors and politicians. Then Childhouse developed con¬ sequences for film theatres. He argued that only 50 major, “worth¬ while” pictures are made each year and a large number of poor pic¬ tures are no better than those on “free" (or commercial! video. “Films made after 1947 for which producers get $40,000 on free tv Will bring $200,000 if presented via toll. Old films will move to pay-tv. “Free tv will go out because with the money available there won’t be anything that’* worth anything to put on free TV.” Football games, prizefights, baseball will move over to pay-tv. he foresaw. * . Film theatres aren’t In healthy condition. Toll would he the pe¬ nultimate blow. “Big pictures will be out the window. Every film studio will be making pictures to sell to pav-tv.” He said the public would be “bamboozled” because it will grad¬ ually lose the good, free TV pro¬ grams over a three to five-year period and won’t realize What’s haopening. In the end some two dozen men would control exclusive franchises for all entertainments — films, fights, pro football and baseball. As to the Matty Fox-Horace Stoneham deal which helped bring the National League’s Giants to Frisco, exhib spokesman Indirectly slammed Mayor George Chrysto- pher for being a party. “There seems to have been a lot of moral commitments made by people in high places. We have had a hard core Of resistance not by the public but by people In high positions. We must show these people they are on the wrong track. To . expendlte this campaign No longer active in the domes-. would soon constitute a monopoly tic distribution field, and currently “ an d the public will be the big- not in production either, RKO last : t , „ week became the second film com- ■ , pany to'line up solidly behind; ONeil’s statement comes at a home-toll. Move becomes the- tune when the air vs. wire argu- more significant since RKO, Via its I men t is reaching a high pitch, parent company—RKO Teleradio ] T Pictures Inc.—controls sponsored | Loca ! I,n « are Probablj more ex- tv broadcast facilities, as well as! pensive, but—argue the advocates film studios. [ of the wire systems—closed circuit RKO prexy Thomas F. O’Neil, in, transmission imposes no time lim- a surprise statement, said the com-j its and it allows the simultaneous |>any was expanding into the new j transmission of several programs, field by applying for Federal Com-! whereas air channel transmission munications Commission authoriza- • i S restricted to a single show, tion. RKO, he disclosed “is nego-: Ther€ . s also the question of - investors wiU l00k fcindiy tion television systems with the . at putting u~ the required millions for a s y stem that * three years of its broadcasting and motion pic-, jjpnce may not meet with final ture facilities in trial demonstra- vrr l nnrn tmi tions of compatible pay television.” : T ’ . . m . .. . ' In O Neil’s opinion, status quo FCC said recently that it stood , video under advertising sponsor- ready to.take application, for cx-| ship can and wI11 continue t0 perunental pay-tv runs lasting I grow . •■compatible pay broad- three.years. Astatton is free in. casting now promises to share the ovnarimanr wirw nna nr onrarsl * . . - experiment with one or several such systems. RKO Teleradio controls five stations in Los An¬ geles, New York, Boston, Memphis and Louisville. WOR-TV Gotham already has cooperated with pay-as-you-see tests con¬ ducted in years past by both Shiatron and Zenith. However, these were primarily engineering tests. O’Neil’s statement said it would be “economically and socially wasteful” for broadcasters not to take part in the home-toll innova¬ tion Only one other film Com¬ pany-Paramount—is . directly ir the field. Via Telemeter. Adver¬ tising broadcasters generally are on record as opposing fee-tv in any form. They successfully pre¬ vented subscription radio’s devel¬ opment years ago. Apart from backing the argu¬ ments of the proponents of over- the-air tollcasting, O’Neil took the occasion to remind of the growing competitive feeling between those who favor wire connections (the so-called cable theatre) and others insisting on air channel transmis¬ sion. Cable theatre method is the one favored by exhibitors. Cable said O’Neil, not only will result in higher prices for the en¬ tertainment delivered, but it also will “give effective control of the talent and events which are likely ta be used for either pay .or free television. The closed circuit wired system operators will soon have control of all of the program elements pf telecasting, whether they be for free or tolL” He Went on to say. that, under no regulation from the FCC, the closed circuit system operators Childhouse’s group has employed Bob Alderman, a California public relations man with long experience and plenty of political connections. In the question - and - answer period after Childhouse’s speech, Childhouse was asked if it wasn’t true that the Naify circuit had applied for some pay-tv franchises itself. He admitted this, hut pointed out it had been done simply as protection against the possibility of pay-tv becoming a reality in a number of Northern California cities. t Having sat through the exhibitors gripe session, Skiatron’s Alan Lane did a not surprising bum. What he countered at his own press meeting later the same day is detailed in another story accompanying this text ) Skiatron Counter-Blasts 'Free' TV ; Continued from, pas* 1 : phoned Mayor Christopher and arranged Christo-, pher’s meeting with Stoneham. He pointed out that “the fact that we made a deal with Stoneham was jnerely good business . . . we’ve paid him $1,000,000 already and will pay him $3,000,000 altogether by the time the first ball is thrown out April 15.”) —Skiatron Will cost a basic $3 a month, with in- stallatfon,-^service and 24-hour hi-fi music tbroyvn in free. From then on each show will be priced sepa¬ rately. Lane said he was seeking a Nov. 20 hearing from the finance committee and that “we intend to de¬ liver the first baseball thrown out next April 15, Lord willing we get our franchise.” Lane then went into Skiatron’s “philosophy of business." He said: “We won't carry anything available on commercial tv, no Perry Como or whatever. We’ll only carry what’s boxoffice in nature, what you have to remove yourself physically to the theatre or stadium to see.” Pay-tv is a poor man’s medium. We won’t charge as much to see an event as the admission to a thea¬ tre or stadium, but the whole family can see it, there’s no parking or baby-sitting charges. You know what it costs the average family to go to a motion picture? $9.38, that’s what—and that’s a fig¬ ure the film industry came up with, not us.”" : Lane added that Skiatron was “in violent opposi¬ tion to the present commercialism on tv,” claimed ■“the bill" on sponsored video was $1,300,000,000 last year and "this was all written into the cost of goods.” tremendous cost burden in soma way that a combination of adver- tising and circulation revenue join to support magazines and news¬ papers and similar to simulcast- ing’s role in the medium of FM radio. “People, he added, are will¬ ing to pay for home entertainment. “Today the public pays too high a cost In time and money for its out-of-home entertainment,” ha argued. “Pay television presents a way to streamline the distribu¬ tion of these events.” He main¬ tained that families could he ex¬ pected to buy “about as much pay entertainment- by broadcasting lh a week as they now pay for one evening of local out-of-home en¬ tertainment." O'Neil argued further that toll- tv might actually Increase view¬ ing time for free video on the the¬ ory that it would eliminate the go- in g-to and coming-from time now involved in these away-from-hom* events. “The average 10 hours per month of current family television viewing time can be expected to remain substantially the same," he held. O’Neil’s estimates don’t jib* with other studies, such as the re¬ cent one by Pulse director Sydney Roslow. He found, among other things, that people wouldn’t pay enough (on tv) to make the show¬ ing of topgrade, firstrun films feas¬ ible. Also, Roslow maintained, while people would tune in to pay telecasts say of baseball games, they wouldn’t do so as often as they did when the show was free. Quote Roslow: “Eventually pay tv will be able to provide a logical service. But, I think more people will go broke, trying to get It off the ground, than will ever make a mint out of it.” Roslow held fur¬ ther that pay-tv would make the entertainment more expensive for the consumer. According to O’Neil, “families can be expected to buy about as much pay entertainment by broad¬ casting in a week as they now pay for one evening of local out-of¬ home entertainment.” Minneapolis, Nov. 12. Oliver E. Treyz, vicepresident in charge of ABC-TV, told the Min¬ neapolis Advertising Club her* that if toll-tv becomes a reality it would mean the end of the fre* video networks now serving as “trustees for the public” in obtain¬ ing programs. “It will be a sad day for Minne¬ apolis and the general public if w* have to become boxoffice peddlers to those whp can pay,” declared Treyz. ^ Citing verious new programs for which, he said, ABC-TV has spent $60,000,000 this year, Treyz assert-; ed his network could not have moved into a position to compete with the other two webs if.it had been necessary to bid against toll- tv entrepreneurs for such shows. 'At the prices we paid, w* couldn’t have obtained or renewed these programs if there had been toll-tv,” Treyz said.