Weekly television digest (Jan-Dec 1960)

4 JUNE 27, 1960 Auxiliary Services More about PAY-TV’S PITCH TO CATV: The show’s still the thing, no matter how you slice it. That was apparent in TelePrompTer’s and Telemeter’s drive to recruit CATV operators for their pay-TV systems during the NCTA convention at the Fontainebleau Hotel in Miami Beach last week. In short, if you have the programs, you’ll get the audience — and CATV operators are still waiting for evidence of continuous solid fare. TelePrompTer Chmn. Irving Kahn, fine promoter & showman that he is, made the most of giving conventioneers the Patterson-Johansson fight on a big screen at the hotel — he followed it up 2 days later with a vigorous recruiting speech that capitalized on the residual excitement after the exciting fight. Kahn can deliver an occasional good fight, and CATV operators would like to have it — if they can make money on it, short run or long run. After his luncheon address, he stood & answered questions for 2% hours, from a parade of 30-40 operators who wanted to know how much AT&T would charge to get them the fight re-match. Some are willing to lose some money in the hope of securing a sharp promotional jolt that will increase subscribers. Others, with more mature systems, hesitate to spend several thousand dollars for a one-shot deal, doubtful of its net financial value. Kahn sought to stimulate their interest by proposing a continuous schedule of pay-TV programs: 13 major sports events per year, an hour or 2 weekly devoted to a bingo-type game, university extension courses, legitimate drama, opera, etc. Kahn reserved his strongest salesmanship for the “merchandising” aspects of the “Key TV” device — the method whereby the subscriber may press buttons to order products touted in commercials over a cable pay-TV channel or over conventional TV & radio stations (Vol. 16:25 p7). He displayed the device and said he’d start using it in TelePrompTer’s Liberal, Kan. CATV system within “60, 90 or 120 days.” Tape Keeps Record of Viewer Response The box on the set looks like a tiny TV set — about 2x3x5-in. It carries various colored lights which signal the subscriber to respond to commercials, etc., which he receives on his TV set. On the utility pole nearest his home, a box with a Western Union tape makes record of what he orders. At intervals, a serviceman picks up the tape w'hich is then fed to data-processing computers that total up bills, calculate public opinion polls, etc. Kahn said a refinement, to eliminate the tape pickups, would be to run a wire from sets back to a central source. CATV operators w’ere somewhat skeptical of the practicality of tape pickups and the costs of stringing wire — even though the wire is much cheaper than TV cable. Kahn told one operator that his 52-mile system would cost $8-10,000 to wire. The “honor system” of charging CATV subscribers $2 for the fight worked well, according to Kahn, who said about 70% authorized the additional billing. But operators were dubious about use of that method for more events, fearing a rapid disintegration of “honor.” They thought foolproof charging system would have to be found. Kahn said the 13 CATV systems carrying the fight fed 25,000 homes. It wouldn’t surprise us, if we judged reaction of the operators correctly, to find several dozen systems asking for the next fight. They may have trouble getting it in some cases, for AT&T was most reluctant to feed the last fight to Bruce Merrill’s 7 Ariz. systems through his microwave, asserting that the interconnection with his facilities violated AT&T tariffs filed with FCC. This seems to be true, lawyers tell us. But AT&T apparently decided it wasn’t quite the time to get tough. A different situation developed with regard to Homer Bergren’s system in Aberdeen, Wash. As we get it, the phone company at first asserted that it couldn’t legally feed the fight; reconsidered; then decided otherwise. At any rate, many CATV systems can be physically tied together. We were amazed to learn that one organization has surveyed the entire U.S., plotting every nonmilitary microwave transmitter — AT&T & others — and decided that, with very few additional hops, 500,000-plus homes could be tied together — and quickly. AT&T is in the picture all over the place. Kahn both praised & cautioned the common 6arrier behemoth, warning in essence that if it’s reluctant, there’s another competitive common carrier with transcontinental TV capabilities coming up — namely. Western Union, the 16% owner of TelePrompTer. “AT&T is not in a position to be highhanded,” he asserted. “Competition is good.” Will Bid Against Theaters for First Runs In Liberal, Kan., Kahn said, he’s prepared to bid for first-run movies against the 3 local movie houses — “and I believe we have an economic edge.” He said he didn’t believe the movie producers would discriminate against him lest they run up against the anti-trust decree. Kahn also pulled baseball problems into the picture, saying that cable pay TV could subsidize the troubled minor leagues by charging viewers $2 for each World Series game. The Dallas team, he said, sponsored the big-screen showing of the fight “and made more money on it than it did all season on baseball.” National TV gate on the fight exceeded $2 million, he noted (see p. 5). Kahn said he would offer his pay-TV device to operators on a sale or lease basis — or buy time from them. Telemeter vp Paul MacNamara’s talk was primarily a rerun of information previously reported on the Toronto cable experiment. He was careful, saying that Telemeter & parent Paramount aren’t drawing conclusions until they’ve had many more months of experience — “until the novelty factor w'ears off.” He said that “Anatomy of a Murder” was bought by 23% of the homes, “Gigi” by 30%, “Ten Commandments” by 50%. The Toronto suburb of Etobicoke has 13,000 families, MacNamara said, and Telemeter expects to hook up 6,000 of them — has 3,800 now. He repeated his firm’s philosophy: People will pay cash for entertainment, don’t like credit. “Opposition to pay TV is beginning to break up,” he asserted. “The networks are taking second look. Exhibitors are getting on the bandwagon.” He thought that pay TV would never eliminate sponsored TV and he urged: “Take your local exhibitor into consideration. He’d be a good partner.” Telemeter is experimenting, he said. Example: Hockey is carried as it’s played, and subscribers are charged a regular fee. The game is taped, offered later the same day at a reduced fee. He didn’t offer conclusions drawn to date on this procedure. CATV is a natural for pay TV for 2 reasons, he said: (1) It can start small. (2) It can offer several channels.