Pay Television

Pay Television

Advertiser support has been the foundation for American broadcast television since the industry’s beginnings. It is worth noting, however, that many experiments with direct viewer payment for television programs also have taken place throughout television history. The idea for pay television (also known variously as “toll” or “subscription” television) actually dates to television experiments of the 1920s and 1930s (at which point the method of financing a national television system had not yet been determined) and can be traced through various developmental stages leading up to modern satellite-carried pay-cable program services.

Bio

Many pay-TV systems have been proposed over the years. Some have been designed to transmit programming to subscribers’ homes over the air, typically on underutilized UHF frequencies. Other systems have been designed to transmit by wire, sometimes wires shared by community antenna or cable TV systems. Various methods have been tested for ordering pay-TV programming and unscrambling the electronic signals.

Until the proliferation of modern satellite-delivered pay program services (both pay-cable and direct satellite), only a small portion of the many planned pay-TV systems ever reached the experimentation stage. Fewer still were used commercially. Economics certainly have had an impact on the fortunes of pay-TV, as has the recurring hesitation of the Federal Communications Commission (FCC) to approve the systems. Even when the commission actually granted permission for testing, final approval for commercial use tended to take many years. Furthermore, no fewer than six major FCC rulings on pay-TV have been handed down over the years, only to be amended in subsequent decisions. Regulators have been aware of ongoing opposition to the various forms of pay-TV on the part of commercial broadcasters and networks, movie theater owners, citizens groups, and other constituencies.

In 1949 Zenith Radio Corporation petitioned the FCC for permission to test an over-the-air pay system called Phonevision. The test was run over a period of 90 days in 1951 with a group of 300 households in Chicago. Phonevision was a system of pay television that used telephone lines for both program ordering and decoding of its scrambled broadcast signal.

In 1953 Skiatron Electronics and Television Corporation tested a different over-the-air system, “Subscriber-Vision,” that used IBM punch cards for billing and unscrambling. The programming was transmitted on New York independent station WOR during off-hours.

Also in 1953 the International Telemeter Corporation, partly owned by Paramount Pictures, launched a combination community antenna/wired pay-TV operation in Palm Springs, California. Broadcast signals from Los Angeles were delivered without charge, and subscribers paid for additional programming through coin boxes attached to their television sets. This system lasted through 1955.

The Telemovies system was launched in 1957 in Bartlesville, Oklahoma, by Video Independent Theatres (VIT). Telemovies offered a first-run movie channel and a rerun movie channel. The movies originated from a downtown studio and, in the case of the first- run selections, were shown concurrently in VIT’s local movie theaters. Telemovies charged a flat monthly rate rather than a per-program fee. After undergoing several changes, including the addition of community antenna service, the system ceased operations in summer 1958.

In the late 1950s, in the wake of the much-publicized failure of the Bartlesville system, International Telemeter announced its latest coin-box system—designed to use either wires or broadcast signals to transmit programming. The site chosen for a test of a wired version of the system was Etobicoke, Ontario, a suburb of Toronto, under the auspices of Paramount’s Canadian movie theater subsidiary. Service began there on February 26, 1960, with 1,000 subscribers, and continued through 1965.

On June 29, 1962, two years after its petition for an experimental license had been filed with the FCC, a Phonevision system was launched in Hartford, Connecticut. By this point, Phonevision had become a joint venture between RKO and Zenith. Phonevision programming was broadcast on WHCT, a UHF station licensed specifically for the Phonevision trial. Although it never made a profit, the Hartford experiment ran through January 31, 1969, and the system won FCC approval for nationwide use in 1970.

Subscription Television Inc. (STV) was launched in July 1964 and continued through November of that year—a short-lived but nonetheless highly touted pay- TV system. STV was the heir (through a complicated series of stock transactions) to Skiatron’s over-the-air system. The two major figures behind STV were Skiatron’s Matthew Fox and former adman and NBC executive Sylvester L. (Pat) Weaver. STV had built wire networks in San Francisco and Los Angeles, and the company planned eventually to wire major cities as well as to incorporate existing CATV systems. Although STV’s three channels offered a mixture of sports, movies, children’s programs, and theatrical performances (typical of most pay-TV systems), it was baseball that provided the foundation for its programming.

Both wired and over-the-air pay-TV systems were launched in the 1970s. In 1977 over-the-air systems were started in Newark, New Jersey, by Wometco-Blonder-Tongue (over station WWHT) and in Corona (Los Angeles), California, by Chartwell Communications (over station KBSC). By 1980, 8 others were in operation, with an additional 16 stations authorized and ready to launch. These over-the-air systems were developing concurrently with satellite-delivered cable program services, however, and were not able to compete with the wired medium once it became available in major urban areas.

By the early 1970s cable had become the preferred vehicle for pay television, with most start-up pay ventures seeking to run their services on local cable systems. Since the early 1950s cable operators had been experimenting with channels of locally originated programming for their systems. While not directly a form of pay-TV, these experiments suggested the possibility that cable could offer more than simply retransmitted broadcast signals—a potential not lost on pay-TV entrepreneurs.

The most notable early pay-cable operation was Home Box Office, which launched in 1972 by providing cable systems with pay programming via microwave relays in the northeastern United States. When HBO took its program service to satellite in 1975, it gained the potential to reach virtually any cable system in the United States. Other pay-cable program services were to follow, including Showtime, the Movie Channel, and others.

During the 1990s cable began to face serious competition from direct broadcast satellite technology. As the new delivery technology began enticing consumers with multiple premium and pay-per-view services, traditional cable also began to make multiple versions of popular premium channels available—aided by the increased use of fiber optics and digital compression.

Pay-cable’s programming has developed as well. In the early 2000s, premium cable channels such as HBO and Showtime boast some of television’s most highly acclaimed programming. In addition to made-for-cable movies, this includes original series such as Oz, Sex and the City, and The Sopranos on HBO, and Queer As Folk on Showtime.

Previous
Previous

Pay-per-View/Video-on-Demand

Next
Next

Peck, Bob