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The Shape Of Cable-tv To Come

March 18, 1986|MORGAN GENDEL | Times Staff Writer

DALLAS — Cable-TV users can say goodby to dirt-cheap basic service rates and local access channels that give a forum to well-meaning citizens and self-proclaimed talk-show hosts.

They can say hello to stereo hookups, more free services and increased availability of pay-per-view movies--such as one to be offered to San Fernando Valley residents beginning April 1.

Those are the messages from the 35th National Cable Television Assn. Convention and Exposition, which opened here Sunday with about 12,000 cable system operators and exhibitors in attendance.

The mood at the Dallas Convention Center is one of quiet optimism--very quiet--as the stagnating cable industry eagerly awaits the lifting of federal regulation scheduled for year's end.

True to the convention theme of "More Choice--More Value," talk here centers on how owners of the cable systems that feed the estimated 40 million cable households can take advantage of deregulation.

Their goal is to reshape cable with the viewer--and profits--in mind.

"There are lots of bells and whistles we currently have to make available as an industry that 80% of the consumers don't want," said Nicholas J. Nicholas Jr., executive vice president of Time Inc., one of the nation's largest cable operators and parent company of Home Box Office pay-cable service. Local access channels, which allow citizens to buy air time and rent production facilities at extremely low rates, are just the type of extras that some cable operators had to offer to win government-mandated local approvals. Cable operators might discontinue such services once deregulation eliminates local constraints.

"Where there is no consumer demand, (a service) will go away," Nicholas said.

Meanwhile, basic service rates considered artificially low in many markets are expected to rise. Basic service--which runs about $12 a month in West Los Angeles' Group W area, for example--typically includes such channels as MTV, Arts & Entertainment and Cable News Network.

Cable operators insist that they will not be offering expensive, no-frills services. With videocassette rentals taking a big bite out of their business, cable systems are sharpening their competitive strategies.

Denver-based Daniels & Associates, which manages cable systems serving 350,000 subscribers, recently began showing Houston Rockets and Astros games on basic service, at no extra charge to the cable subscriber. Company Executive Vice President Gerard Maglio said that his system also intends to provide customers with a full-service hookup, whereby the cable line feeds into the videocassette recorder and stereo as well as the TV set.

"More for the money" is how Maglio characterized his approach.

Pay-per-view is the most closely watched new type of service--in part because it is the only new type of service available, some say. But others consider this the most potent weapon against home video rentals, as it allows viewers a very similar service: They pay a one-time fee of $4-$5 to receive a hit movie that only recently premiered in theaters and won't be available on pay-cable services for several months.

Request Television, the largest satellite-fed pay-per-view operation with a potential 600,000 viewers, announced Sunday that it will be launched April 1 in the San Fernando Valley as well as in the Los Angeles County communities of Hacienda Heights, South Whittier, La Puente and Pico Rivera.

"It will give us the opportunity to get a share of the revenue going to home-video stores," said Margaret Durborow, vice president of United Cable Television of Los Angeles, which operates the new East San Fernando Valley system. That system will bring cable service for the first time to Van Nuys, Sherman Oaks, Studio City, North Hollywood and Pacoima, among others, starting next month.

The pay-per-view service offered by Request via United Cable will enable viewers to see such films as "Cocoon," "To Live and Die in L.A." and "Rocky IV," as yet unavailable on such pay services as HBO and Showtime.

Other up-and-running pay-per-view services exhibiting at the convention are the People's Choice and Showtime's Viewer's Choice, neither of which is available in Southern Cailfornia.

Durborow acknowledges that pay-per-view at its best will be an "incremental revenue source." Some operators are not sure there will be any profits at all from pay-per-view, given the expense of the technology needed to target an individual cable signal to a specific home.

That is why "Cable '86" includes among its 47 sessions numerous discussions on scrambling cable signals to prevent satellite-dish owners from getting them for free; economic aspects of a free, deregulated market, and numerous legal and technical issues. All are ultimately intended to allow cable operators to maximize profits.

"This convention marks a new beginning for our industry," James Mooney, president of the sponsoring National Cable Television Assn., said optimistically in his opening remarks to attendees. "We now have the means to achieve our goals."

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