The PAY-TV Issue
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Pay Television: an introduction.

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.

Many pay television 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 descrambling the electronic signals.

Until the proliferation of modern satellite-delivered pay-cable program services, 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 Federal Communications Commission's (FCC) recurring hesitation 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 in 1951 with a group of 300 households in Chicago over a period of 90 days. 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 descrambling. 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 and 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 26 February 1960, with 1,000 subscribers, and continued through 1965.

On 29 June 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 31 January 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. While 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 television systems were launched in the 1970s. In 1977, over-the-air systems were started in Newark, N.J., by Wometco-Blonder-Tongue (over station WWHT) and in Corona (Los Angeles), California, by Chartwell Communications (over station KBSC). By 1980, eight 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 startup 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 Northeast. 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.

-Megan Mullen

FURTHER READING

Gould, Jack, "Pay-as-You-See TV -- The ABC's of the Controversy," New York Times (New York), 19 June 1955.

Howard, H.H., and S.L. Carroll. Subscription Television: History, Current Status, and Economic Projections. Knoxville: University of Tennessee, 1980.

 

See also Cable Networks; Pay-Per-View Cable; United States: Cable

 

 

 

 

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the old to the new
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Zenith and PAY TV

 

 

Radio: Report on Phonevision

In Hollywood, the Theater Owners of America cried that it was "a monumental flop." In Chicago, Zenith Radio's vocal President Eugene F. McDonald Jr. crowed: "It was successful far beyond our expectations." Both were talking about Phonevision, the system of selling feature movies by television and charging the set owner $1 per picture on his phone bill (TIME, Jan. 8). In a preliminary report on the 90-day test of Phonevision among 300 Chicago families, McDonald claimed last week that his brain child was a lusty million dollar baby.

During the first month of the test, said McDonald, the average Phonevision family saw...

 

 

Radio: Phonevision

"I've been waiting 19 years for this moment, and now it's here." With these words, Zenith Radio's gravel-voiced President Eugene F. McDonald Jr. this week began a trial run of his much-delayed Phonevision. The testing ground: 300 selected Chicago homes.

An ambitious effort to arrange a financially happy marriage between TV and Hollywood, Phonevision gives TV set owners a chance to order movies by telephone, at $1 each. Once the order is placed, a simple gadget attached to the TV set and connected to the home telephone unscrambles the movie on the TV screen. Hollywood collects its profit and the set owner...

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Growing up, Dad bought the fam a Zenith console TV with a "Space Phone" feature. It was basically a hands-free speakerphone built into the television set. It used the TV speaker and remote control to make and receive calls. Making calls were performed by pressing a button on the remote to activate the Space Phone (which would mute the TV). The phone number was dialed using the remote, which then displayed the digits being dialed on-screen. The caller could then talk with another caller hands-free, much like a regular speakerphone. A group of friends watching TV could torture a telemarketer to the extent of crying/hanging up on us. Making crank calls was a favorite pastime of mine and I owe it all to the Space Phone.

(My Dad also bought an engraver, hence the address and last name).
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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