Payday, Some Day

When Samuel Goldwyn first pondered the possibilities of pay television, he saw it as the embodiment of progress --"and nobody yet," he exclaimed, "has shown the way to stop progress." Goldwyn was clearly uninformed about the procrastinating ways and restricted means of the Federal Communications Commission. In fact, the FCC dallied until this month, some 17 years later, before authorizing the U.S.'s first nationwide and permanent pay-TV service. And by now, with the networks having cornered most of the programming properties, the success of "fee-vee" is hardly assured.

As conceived by its originators in the early 1950s, pay TV was to bring to every living room Broadway musicals, operas from the Met, heavyweight-title fights--all for $1 or so a show. There would be ballet, first-run and art movies never seen on TV, classical drama and the boldest of the off-Broadway experiments--the sort of minority programming that network executives claim is uneconomical. But that vision did not reckon with the relentless opposition of movie exhibitors and the broadcasting lobbies in Washington. Over the years the TV industry kept insisting, as the National Association of Broadcasters' chief counsel put it, that pay TV "would convert a free highway into a toll road. It would require the public to pay for what they now view for free."

Tab-in-the-Box. Cowed by such a campaign, the FCC felt that all it could do was authorize a few experimental fee-vee operations. And none was on a large enough scale to test either the hopes or the fears of the contending interests. A pilot system was franchised in Denver but never got on the air. A Bartlesville, Okla., project lasted nine months. Other projects were quickly aborted in New York City and Chicago. Fee-vee's most promising and disheartening trial came in Los Angeles. Just as the operation seemed to be catching on, the broadcasters and film exhibitors forced a repeal referendum onto the 1964 California ballot. Then, with a war chest of reportedly $2,000,000, they mounted an ad campaign that convinced the voters to vote no. Two years later, the U.S. Supreme Court declared the referendum illegal, but by then the California fee-vee company had gone bankrupt.

Today, only one pay system remains alive--but not well--in Hartford, Conn. When the viewer tunes in at night to station WHCT, the image on the screen looks like a shattered mirror, and the audio twitters like a rewinding tape recorder. Subscribers interested in the show dial a code number on an un scrambling device perched atop their set. Automatically, the picture and sound come in clear and loud, and a tape inside the decoding box totes up a charge of 50-c- to $1.50 a show. Every month, the tape is pulled out of the box as a statement. There is also a service charge of $3.25 a month.

Denture Collection. The subscription list is now 4,000, and the average customer runs up a bill of $96 a year--and that is a wonder. To be sure, the show runs straight through without commercials. But after seven unprofitable and uncertain years WHCT has lost its ambition; now nearly all of its programs are movies. Worse, they are seen only in black and white, and are not strictly first-run (last week's offerings included Frank Sinatra in The Detective). In earlier days, WHCT was more venturesome. It carried a 1963 Joan Baez concert live ($1.50) and the 1964 Clay-Liston fight ($3). That drew 63% of the clientele. There have been other signs of pay-TV appeal. Patients at a Hartford old folks' hospital who got their service free were so enthusiastic that they made a bed-to-bed collection and sent the proceeds to the station.

The gesture was appropriate. The owners of WHCT, RKO General, have lost $6,000,000 on the experiment so far. Other millions have been invested by the developer of the Hartford decoding system, the Zenith Radio Corp. Neither firm expected to make a profit with such a small test market. But both were encouraged enough by the steadfastness of subscribers to continue the experiment. Zenith is working on a more sophisticated decoder with automated billing and has long petitioned the FCC for a go-ahead in other markets. Now, after years of knuckling under to the anti-pay lobby and its friends in Congress, the commission approved more fee-vee, but hesitantly. The authorization will not take effect for six months, pending congressional review. And the new pay-TV charter contains so many safeguards for the existing industry that the National Association of Broadcasters may no longer oppose the plan.

Hedged Go-Ahead. In the first place, under the suggested regulations, pay TV would be restricted to markets where at least four standard stations are al ready operating. As of now, that means 89 cities and about 81% of the U.S. TV households. As for programming, the fee-vee system would not be allowed to bid for TV fare that is now available free. Pay operators, for ex ample, could not in most cases telecast movies more than two years old; or series-type shows with continuing casts; or the latest of any sports event that had been telecast in the past two years. That rule would bar pay TV from scheduling such potentially profitable events as the World Series or the Super Bowl--or most sports, for that matter. A possible exception: home-town pro football games, now blacked out.

Despite the FCC's well-hedged go-ahead, therefore, the future of pay TV is still uncertain, at best. Joseph Wright, board chairman of Zenith Corp., believes that start-up and production of sufficient decoding devices will mean a year's delay between FCC authorization and actual premiere of a new pay channel. And that would be in just one market, perhaps where Zenith maintains its headquarters: the city of Chicago.

The FCC simultaneously proposed new rules for Community Antenna Television, the fast-growing industry that provides additional channels and sharp TV images to rural areas and localities with poor reception. One recommendation would end a three-year-old bureaucratic procedure that has frozen the number of out-of-town stations a cable system can pipe into the U.S.'s 100 largest TV markets. In the future, a CATV outlet could import limitless channels if it compensates the owners of the shows. The FCC also recommended that CATV systems originate their own programs, presenting perhaps debates between local political candidates or school-board meetings. Under inquiry next summer will be the question whether or not CATV should originate its own commercials.

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