Why Suppress Pay-Tv? The Fight in California

Radio and television executive, a creator of the pungent phrase, and a man of unquestionable enthusiasms, SYLVESTER L. (“PAT”) WEAVER, Jr., is president of Subscription Television. Inc. In his home country of California he is making a fight for an innovation in television which, if he succeeds, will make available programs that commercial television could not, or would not, provide. STV began broadcasting in Los Angeles on July 17 and in San Francisco in mid-August. It already has over 30,000 subscribers.

WE WHO are professionals in television have known for some time that two major developments are beckoning. One is the use of cable or wire to interconnect homes in order to improve the technical quality of sound and picture, and even more important, to provide virtually unlimited choice of programs to those who are dissatisfied with the commercially supported programs. The second is the development of the cartridge system, which will permit home movies to be handled like phonograph records: the picture and sound on a spool of film or tape will be inserted into the magazine of the television equipment, and with a push of a button the program will begin.

The two developments, to judge from my scrutiny, are interdependent for economic reasons: the cost of tape is so great that it must be reused, and the development of the cartridge and the technical necessities of transmission make it likely that we will deliver new tapes to homes over lines at what we call rewind speed and at night.

To the layman this is a long-awaited breakthrough in programming. Commercial radio and television have been predicated on the sale of advertising, and consequently built their business against a bulwark of criteria dictated by the needs of the sellers, not the needs of the buyers. For, the buyers were the public, and no easy reports on how the habit-viewing mechanism of radio and television became the most important selling and social force in the nation can overlook what we did not do. We did not offer to people with special interests any regular, convenient, in-depth, uninterrupted, full-length presentations. The hope that educational television can complement the commercial networks is unrealistic. Educational TV has tried, but it will never have the money to produce one thousandth of the material we ought to have.

Radio and television were built by those of us who really knew advertising needs and who understood programming appeals and techniques, but I doubt if we expected that television would set up such an apathetic relationship between viewer and program. It was a sound, good kind of service, but it was extremely limited. I believe it was Alistair Cooke who called this service “audible wallpaper,” a steady diet of Westerns, old movies, situation comedies, crime shows, and panels. It is there, turned on, hour after hour, observed or not observed, but present. It has values, powerful and good. And it has limitations, severe and built-in. Some have tried, as I did, to build a schedule with heavy accent on coverage of the real world, showing in prime time at night programs rising from our cultural heritage, informational programs, and great theater; but, basically, these commercially supported programs are usually superficial and constantly interrupted. Aesthetically, advertising is difficult to handle in combination with the more rewarding arts, and interruptions by commercials are at best upsetting and at worst sickening.

Subscription television will offer the variety we must have, the new usefulness we all want. In cable service, there will be no interference with ordinary television, either in the operation of the set (we merely connect our selector to the antenna leads outside the set) or in the commercial programs. The major influence we will have will be to encourage people to buy color sets and to upgrade their equipment. They will insist on decent Infidelity sound, which television does not give us with present equipment, but which we can deliver into hi-fi systems over telephone wires as part of our service.


Subscription Television, Inc., was formed in January, 1963, by the Reuben H. Donnelley Corporation, Lear Siegler, Inc., and William R. Staats & Co. Donnelley is a wholly owned subsidiary of Dun & Bradstreet, and its principal activities include the compilation and publication of classified directories for certain members of the Bell Telephone System, various marketing services, and the publication of business and professional magazines. Lear Siegler is a large, diversified manufacturer of military and commercial electronic equipment. Staats is a leading West Coast investment-banking firm. Each of the founding organizations had been exploring various facets of the subscription-television industry for a period of five to ten years. They became convinced that if the proven abilities of the Donnelley and Lear Siegler organizations could be applied to a satisfactory subscription-television system, an important new industry could be developed. Careful investigation into the various proposed subscription-television systems and techniques seemed to show that the system held by Tolvision of America, Inc., under license from Skiatron Electronics & Television Corporation, held the greatest promise. Acquisition of the rights to the Skiatron system was the first major milestone in the development of STV.

The basic concept of STV (a term used to refer collectively to Subscription Television, Inc., and its subsidiaries) was that a successful commercial venture in the subscription-television field could only be accomplished if it were done on a scale large enough to make adequate financing and programming possible.

The necessity for entering the subscription-television field on a large scale from the inception of the company is derived from the nature of the industry itself. It is obvious that viewers will not pay to see programs unless they are of a type or presented in a manner not already available on commercial television. On the other hand, owners of programming will not be disposed to offer their product on subscription television unless the potential audience is of a sufficient size to provide an adequate return. This interdependence of programming and consumer acceptance leads inevitably to the conclusion that subscription television can be successful only as a full-scale, profit-oriented venture.

Subscription television has been the subject of much controversy and some experiment since the early 1950s. It appears to be the next logical step forward in the evolution of low-cost mass entertainment and is uniquely equipped to offer programs which appeal to small groups with special interests. It is a supplementary service which presents programs for which the viewer would normally pay an admission charge at the scene of the event, or program material not now available on present television service. Subscription television in no way interferes with the ability of a customer’s television set to receive all standard broadcast programs. Programs are presented without commercial interruptions and without the clock discipline of commercial television. They end when they are finished, as the writer or creator intended. In the convenience and comfort of the home, any number of viewers may enjoy an attraction at a cost of no more than one adult admission at the scene of the event.


Subscription television may be transmitted over the air or through a closed-circuit cable system. Over-the-air systems utilize broadcast methods to transmit programs but must scramble these programs so that only those sets equipped with a complex decoding unit can receive the programs as transmitted. Closed-circuit systems utilize a coaxial-cable distribution grid to transmit programs, providing signal security without scrambling and rendering better picture and sound quality. An over-the-air system is limited to one program at a time transmitted over a channel assigned by the F.C.C. A closed-circuit system may offer as many as three or even more programs simultaneously, thus multiplying program service for the viewers’ selection and increasing the potential revenue for the system.

The STV system is a closed-circuit cable system in which three television channels are available for simultaneous programming, in addition to an information channel over which information is offered. The distribution grid to each subscriber’s home is installed by local telephone companies, ending the drop-off with a jack near the subscriber’s set. STV connects the jack to a program selector, which in turn is attached to the antenna leads of the subscriber’s set. The program selector is actuated by a simple off-on switch and enables subscribers to select among STV’s three simultaneous video channels and its information channel without interference with the subscriber’s reception of standard commercial television programs.

An electronic interrogator periodically transmits coded signals back to the sender through the distribution grid. A program selector tuned to any one of the three STV channels automatically replies with a unique coded signal which is received and recorded by the interrogator. The interrogator forms the heart of an automatic data-processing system, which produces monthly customer invoices, computes royalties due the owners of programs, and records customers’ program selections. It is also possible for STV to encourage viewing of certain kinds of material by permitting sampling without charge.

The three channels are programmed simultaneously, and the subscriber receives a program guide telling him what is on, how long it lasts, how much it costs, and how long he can look for nothing. There is an installation charge of $10.00, plus $1.00 per month for service. Individual programs cost from fifty cents for a bridge lesson to $1.50 for a Broadway play. Each month the customer gets a bill for what he saw. We know, of course, that if it is too high for his rewards, he will take the service out. If he does not pay his bill, we will take the service out.


The range of programs is wide and includes much of the world’s finest cultural fare: the very latest plays from Broadway; also off-Broadway shows, summer stock, repertory, civic theater, little theater, theater-in-the-round; musicals and revues; classic and modern operas — from Mozart to Bartók, from Puccini to Wagner to Verdi; the world-famous D’Oyly Carte Opera Company; the Bolshoi Ballet, the Royal Ballet, the Leningrad Kirov Ballet, and specialized national dance groups — Antonio and Les Ballets de Madrid, Moiseyev Dance Company, Ballet Folklórico of Mexico.

STV will present pianists of the stature of Artur Rubinstein and Van Cliburn; violinists, Isaac Stern and David Oistrakh; singers, Marian Anderson, Jan Peerce, Mary Costa, and Victoria de Los Angeles, along with famous chamber music groups. STV also plans to select from the great festivals of the world: Bayreuth for Wagner, Salzburg and Glyndebourne for Mozart; the great film festivals of Cannes and Venice; Shakespeare at Stratford-on-Avon; jazz at Monterey; the thrills and spills of the big rodeos; circuses, fairs, galleries, museums, and amphitheaters. Fiestas and spectacles, too: Mardi Gras in Rio or New Orleans, Fastnacht in old Basel, ice shows, aquacades.

In sports STV will cover, season-long, Dodger and Giant baseball. Football fans will find intense interest in special “Monday Quarterback” programs. In addition to basketball, ice hockey, golf, and tennis, STV will bring to the screen major games and matches and informative interviews with players and coaches, and will show many sports less well known in America, such as soccer, rugby, water polo, and jai alai.


From its inception, the concept of subscription television has met opposition from motion-picture exhibitors and television broadcasters, together with a portion of the public which was led to believe that the advent of subscription television would eventually mean that the public would be required to pay for programs now carried on commercial television.

STV, as the first large-scale, profit-oriented venture in subscription television, has felt the full brunt of this opposition. The motion-picture exhibitors are the principal backers of the Crusade for Free TV, which is attempting, through an initiative referendum, to have subscription television outlawed in the state of California. In other words, the voters are being asked to decide whether this undertaking, which is in the best tradition of free enterprise, should be abolished. It is significant that the exhibitors, who have been the longtime foes of commercial television, should now be so vociferous in trying to “protect free TV.” They are obviously aware of the public’s desire to have a choice and variety of television programs and of its willingness to pay for that privilege.

The basic charge of the theater owners is that STV will make people pay for what they now see for nothing, that free TV, as they call commercial television, can be saved only by outlawing pay-TV. But this argument does not hold water. No viewer in his right mind would ever pay for series programs, which are being shown for nothing on more and more channels. And our opponents must realize that they can never present what we will use as our main popular fare — the new motion picture which is beyond an advertising budget now or in the future; the Broadway play, which, like other box-office attractions, can use pay television as an extension of the box office; the blackedout sports event, which will never be seen on commercial television because the box office must be protected. Out of nine baseball teams, five of which have moved their franchises since television coverage began, all but the New York Mets have instituted various forms of blackout on television to save them from bankruptcy.

Although RCA, NBC, CBS, and virtually all respectable elements in the communications industry have come out opposing the use of the ballot in a matter of free enterprise, the California broadcasters have not repudiated the widely published statements that support the vicious distortions of the theater owners on the main point. And because it is a glib and easy slogan, the idea that we will actually end free television is believed by many people. Even the National Association of Broadcasters, to its everlasting discredit, has taken a self-serving position in opposition to a new competitor and is actively helping the theater owners in California to win the referendum.

Meanwhile, the heat is on at every organization in the state. The Chronicle in San Francisco, which has a substantial interest in commercial television and owns the NBC affiliate, has been reluctant to take our advertising, although all other newspapers in the state have run it without question. The Chronicle continues to oppose us editorially.


If permitted to function within the framework of the free enterprise system. Subscription Television, Inc., has the capability of exercising a highly beneficial influence on the California economy. Subscription Television, Inc., is expected to have a million subscribers by the early 1970s. At this level of subscription, the STV system has the capability of directly generating new employment opportunities for 38.000 workers, an annual payroll in excess of $315,000,000, and a cumulative capital investment approximating $170,000,000.

The most dramatic economic benefits are expected to accrue to the movie-production industry, The catalyst provided by the STV programming requirement to serve a million subscribers will, conservatively, generate a doubling of California feature-film production over the 1963 base. Employment to accommodate increased levels of production is forecast to increase by more than 32,000 jobs, and payrolls will increase by an estimated S272 million. In addition, increased production of other filmed television shows will produce an estimated $24 million in new payrolls.

The above estimates of economic impact, while impressive in themselves, do not indicate the full measure of the potential benefits to the California economy. These direct investments in men and capital will start a process of multiplied income and employment change. The multiplier effect is projected to generate a $1.9 billion impact on the California economy, which is representative of support for 237,800 new jobs. Based on the current ratio of population to employment in California, these new employment opportunities can support a population gain of 650,000.

While all the Hollywood unions and many others are for us because we obviously mean more jobs, more prosperity, and a better service to the people, the constant presentation of the old positions taken by those opposed to our service for whatever reasons and the new resolutions passed by unions and groups create a fog of uncertainty in which the easy acceptance of keeping television unchanged makes the fear of the unknown the chief ally of the theater owners.

Most astonishing is the opposition of the California Federation of Women’s Clubs, whose spokeswoman is Mrs. Fred Teasley. She continually represents the women’s clubs as opposed to our service, although no such opposition has ever been voted by the members and its constitution prevents the organization from speaking for its membership. The national federation has never gone further than to say that they favor keeping television free and healthy, which is as controversial as being for the flag and against the shark. Mrs. Teasley’s contributions to the debate reach a high in irrationality that cannot be believed unless experienced.

The most disheartening, of course, is the opposition of intelligent broadcasters. Not only their opposition to government regulations in the field of ideas but also their own self-interest in a more vigorous communications system should make them welcome the challenge of a great new competitor. But, alas, too many eyes are fixed too rigidly on yesterday to understand that our service is opportunity as well as competition.

We expect to persuade the voters and to win in November, because we do have a great plan in the interest not only of the public generally, but especially of those who are less privileged economically and educationally and of older people. The greatest value our system has is that families can take the money saved from their entertainment budgets because of STV’s single ticket price for any number of viewers, family and friends, and permit those same dollars, no matter how meager, to buy coverage of the wide world, the magic ticket of admission in first-class surroundings to many experiences that are denied to them in today’s society. I am thinking of the opera house, the theater of Broadway and London, the concert halls, the festivals, the universities of the world. No longer will privilege be a matter of birth or money or influence, or even of having to be in the right place at the right time. STV lets each person follow his heart and mind to those attractions, services, and events that he wants.