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Pick-and-Pay Pleasure : Pay-per-view channels, still waiting to become next big time, say the future is . . . well . . . soon

August 13, 1989|JEFF KAYE

As your eyes survey the menu, a few items grab your attention. The stylish first episode of "Miami Vice" sounds good for starters. You key the correct code into your remote control. Hmmm. How about a movie afterward? You peruse the movie directory and decide on Spike Lee's latest. And for something light to finish the evening, you punch in the code for live comedy at The Improv. That settled, you lean back for an evening in front of the television. The itemized bill will arrive later.

The day is coming, say futurists, when watching TV will be like going to a restaurant: You'll make selections from an extensive menu of programs on specific "pay-per-view" channels and get billed only for the shows you order. In fact, that day may be closer than many viewers realize.

Pay-per-view channels are available in about 10 million homes throughout the country. That figure is expected to grow to 19.2 million homes in 1992 and 46.7 million in 1997, according to Paul Kagan Associates, the Carmel-based media research firm.

Though the selection of programming on PPV channels is limited to movies and occasional sporting and musical events, the variety of shows and number of channels are expected to grow along with the number of PPV viewers. And while the PPV industry took in revenues of $211 million in 1987, according to Kagan, it is expected to gross $1 billion in 1992 and $4.1 billion in 1997.

"Pay-per-view will fundamentally restructure the whole television industry," boasts Hal Krisbergh, president of the General Instrument Corp.'s Jerrold Division, which owns a PPV network called Cable Video Store.

"We've spent the past four years setting the groundwork for pay-per-view," says Jeffrey Reiss, whose Reiss Media Enterprises co-owns the Request Television service. "We're going to start experimenting with new programs that people haven't even thought of yet."

But fulfilling its promise is not going to be easy for the PPV industry--especially if the past is any indicator. A slew of marketing, technical and programming problems have kept pay-per-view from success while the pay cable and home video industries, which emerged at roughly the same time, have radically altered the entertainment landscape.

It's not hard to see why pay-per-view--which has spent more than a decade waiting to be the next big thing in the entertainment industry--is still waiting.

"I literally spent the whole weekend trying to watch 'Mystic Pizza' on my pay-per-view channel," moaned Long Island resident Ed Bleier. After playing detective to track down a schedule for the channel, he discovered that "Mystic Pizza" would not run at a convenient time anyway. In the end, he decided to rent the movie from the video store.

What made the experience particularly exasperating for Bleier is that he is president of the Warner Bros. division that runs the studio's pay-per-view operations. Without venturing beyond his living room, the executive could see why the pay-per-view industry is still waiting to turn a profit.

The business operates like a sort of hybrid of pay-cable channels, such as Showtime or HBO, and a video store. Customers of PPV channels are given a programming schedule composed mostly of movies, with some music and sporting events included. But rather than just switch on the set to see a show, PPV customers must order each program in advance. It's akin to renting a video and having it faxed to your house. Prices for movies hover in the $4-$5 range while concerts and sporting events generally cost between $15 and $35.

A handful of companies dominate the industry. Viewers Choice, which has two channels that reach 5.6 million households, is the largest. Request Television reaches 4.5 million homes, followed by Cable Video Store, which reaches 850,000 cable buyers. On Dec. 1, the Playboy Channel will convert to a pay-per-view service called Playboy at Night, initially reaching an audience of about 2.3 million homes. (These figures total more than the PPV universe of 10 million because some cable operators offer more than one PPV service.)

Warner Cable gave the industry its start in 1977 when it launched an experimental cable system called QUBE with eight pay-per-view channels in Columbus, Ohio. But despite QUBE's ambitious plans, the system never took off. The industry languished for years until Viewers Choice and Request were launched in 1985. Request was backed by the major studios, which felt they had been shortchanged by pay cable and didn't want the same to happen with PPV.

"When Hollywood funded Request," says an industry insider, "HBO was so big and paying so little for their films, they said, 'I don't want to miss the boat this time.' "

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