In 1948, cable television became available in the United States for the first time. By 1989, 53 million American households had subscribed to cable television, with 60 percent of all American households having done so by 1992. with According to SNL Kagan data, around 58.4 percent of all American homes subscribed to basic cable television services in 2006. The majority of cable watchers in the United States are middle-class and live in the suburbs; cable television is less frequent in low-income, urban, and rural areas.
Was there cable TV in the 70s?
The rise of cable television frightened the major broadcast television networksABC, CBS, and NBCwhich had dominated American television audiences since the 1940s, when television technology was first introduced. From the start, the networks were concerned about the impact of cable. They claimed that cable TV companies stole their programming by intercepting signals and charging subscribers a fee to provide it. When numerous cable systems began employing new technology to bring in television signals from faraway cities, network complaints became more acute. The essence of cable services altered as a result of this evolution, from just increasing the reception of local TV programs to giving customers with new programming possibilities from distant stations.
The three big networks wanted the FCC to impose rules and limits on cable companies. (The Federal Communications Commission, or FCC, is a government organization that oversees and regulates all forms of communication, including radio, television, telephone, and telegraph.) The FCC, on the other hand, was hesitant to step in and develop laws to regulate cable TV for many years following its introduction. The agency was only able to oversee communication technology that functioned over the airwaves, such as radio, under the Communications Act of 1934. Cable, on the other hand, was a hybrid (combination) communication technology that delivered over-the-air signals over fixed cables. The FCC determined in 1956 that it lacked the jurisdiction to regulate cable since it did not use the airwaves. However, by 1962, the agency had changed its mind. Because cable had an impact on broadcast television, which the FCC was supposed to encourage and promote, the FCC asserted regulatory control over cable.
In a 1965 document titled “First Cable Television Report and Order,” the FCC published the first formal cable television guidelines. The agency published its “Second Cable Television Report and Order” the following year. These two sets of laws, when combined, effectively limited cable TV companies to tiny, local markets not served by the big broadcast networks. “Must carry” restrictions obliged cable providers to carry local broadcast signals, and “nonduplication” requirements barred cable operators from bringing in programming from distant stations that were already available through local channels. These guidelines were deemed necessary by the FCC commissioners in order for broadcast networks to maintain control over national television audiences.
The Federal Communications Commission (FCC) introduced new regulations in 1969 that further stifled the spread of cable television. These regulations barred cable TV companies from entering urban markets where they would face direct competition from broadcast networks. The laws also required cable operators to provide channels for local residents to air their own content, tying them closer to rural communities. Finally, in order to safeguard broadcasters, the FCC imposed content restrictions on cable television. Cable systems, for example, were not allowed to broadcast films that were less than 10 years old or sporting events that had occurred within the previous five years.
Despite the FCC’s attempts, cable television grew in popularity. In 1970, the United States had 2,500 cable TV systems serving 4.5 million users. Around this time, a number of community organizations and educational institutions began to voice their dissatisfaction with the government’s restrictions on cable television. They argued that cable had the potential to provide Americans with new social, educational, and entertainment services. They contended that the FCC limitations hurt the public interest by prohibiting cable from attaining its full potential in order to safeguard the interests of big broadcast networks.
How much did cable TV cost in the 1980s?
Furthermore, pay television is also competing with a broader range of “basic” cable networks and regional pay sports channels, which are attracting an increasing number of viewers.
“Pay TV is flat to down as a result of the proliferation of more networks and customer choices,” admits Tony Cox, president of Showtime. There were just four cable networks when paid television began in the mid-1970s. There are now 69.
Pay-per-view, which can transport movies into the home before they are accessible on pay TV, is also in the future.
As a result, the two major pay television networks are pursuing different tactics to slowing their expansion.
HBO is establishing itself as a “brand name,” with plans to expand into original programming, while Showtime is pushing for major changes in pay television pricing.
The current plight of pay television can be traced back to the heady days of the 1980s, when HBO and Showtime waged “exclusivity wars” to win pay television rights to Hollywood films. The policy, which aimed to set itself apart from the competition by ensuring that the same film did not air on both channels, did not come without a cost.
Over the next seven years, Showtime plans to spend $2.3 billion on movies. Showtime Networks Inc., which is owned by Viacom Inc. and includes Showtime and the Movie Channel, lost money between 1987 and 1989 as a result of these programming costs. It hopes to be moderately profitable this year.
“It’s not a fantastic business even in good times,” admits one senior Showtime executive.
HBO, which is owned by Time Warner Inc. and has yearly revenues of more than $1 billion, has seen its pretax profit margin fluctuate between 9% and 13% in previous years.
However, the two pay television competitors can no longer compete by slamming each other (although Viacom still has a $2.4 billion antitrust case against Time Warner and HBO ongoing).
HBO and Showtime are attempting to persuade the cable industry that paid television is still feasible in the face of increased competition from upstart cable channels.
HBO and Showtime, for example, are not concerned about their programming. They continue to receive high ratings, frequently outperforming one of the Big Three networks during prime time among pay TV households.
“Hundreds of millions of homes still do not have HBO,” Fuchs argues. “However, I’m not getting that business by making another made-for-TV film.” It’s only by thrashing those folks.”
Showtime and HBO are now working on subscriber retention in addition to increased pounding. Each month, up to 4.5 percent of HBO’s customers unsubscribe, implying that the pay TV channel must replace almost half of its subscriber base on an annual basisratios comparable to the mature magazine industry.
Pay TV CEOs are ready to point the finger at deregulation as the root of their troubles. “The problem with our growth is entirely due to marketing and positioning.” “The hike in cable pricing has harmed us,” Cox claims.
According to Paul Kagan Associates, the average monthly cost of basic cable increased from $8 to $16 between 1980 and 1989. Customers must “buy through” the basic package on most local cable systems before purchasing their first pay TV channel, which normally costs an extra $10 per month.
“Basic prices have risen considerably, and this is the primary cause for the pay TV slowdown,” says HBO’s Fuchs.
In certain regions, forcing users to acquire a package of basic channelswhich may include channels they don’t want to watchhas reached absurd levels. Cable consumers in several New York suburbs on Long Island and in Connecticut, for example, must spend $60 per month to get Showtime.
However, according to Robert Klingensmith, head of Paramount Video, the studio’s arm that sells movies to pay television, VCRs have harmed pay television as well. “Because these films are no longer first in the home with home video, customers are saying, ‘I don’t need all of these services.'”
Nonetheless, most cable executives believe that “marketplace mechanics” are impeding pay television, which is why marketing has become the new motto for pay television. In fact, the pay providers are having to spend ever-increasing quantities of money just to stay afloat. Pay TV executives point out that this is similar to many established products, which require companies to budget 15% of sales just to maintain market share.
Part of the reason why pay TV channels rely on marketing is that they have no other option.
“One of pay television’s biggest concerns is that the programming cannot be modified because the majority of the expense is long-term output arrangements with the studios,” says analyst Gerbrandt.
“They have no flexibility in that sense,” he argues, “therefore the only thing they can directly control is the product’s marketing.”
HBO will spend $150 million on marketing next year, primarily on advertising and promotion. One-third of money is set aside for buying broadcast network advertisement time for a “image campaign.” HBO has also grown to be one of the country’s largest direct-mail advertisers.
While HBO spends money to promote itself, Showtime is working behind the scenes to modify the way basic and pay TV channels are packaged by local cable operators. “I don’t believe any amount of advertising on behalf of our brand will be enough to solve our industry’s inherent difficulties,” Cox says.
Showtime has suggested a major overhaul of the wholesale license payments it charges local cable companies. Showtime and HBO have traditionally charged local cable systems between $4 and $5 per subscriber. At the retail level, the local system frequently more than doubles that rate.
However, a new concept floated by Showtime in recent weeks would levy a tiny cost to every basic subscriber, rather than the $4 to $5 price charged primarily to those who pay for the pay channel.
“The notion is that by lowering the price, Showtime will be able to significantly improve its penetration,” says Mark Riely, a partner at MacDonald Gripo Riely, a New York investment firm.
Most local cable operators have resisted the Showtime proposal so far because it threatens their short-term profit margins. Few local systems, many of which are highly leveraged because to recent ownership changes, can afford to make such a sacrifice in the current economic climate.
Local systems, the bulk of which are controlled by or linked with huge “multiple system operators,” or MSOs, are instead experimenting with their own methods of marketing pay television. United Artist Entertainment, a Denver-based MSO, is now offering pay channel annual subscriptions at certain of its local systems across the country. Customers will receive a discount if they purchase a year’s worth of pay channel service in advance, similar to how periodicals have done for years.
“It’s imperative to come up with marketing innovations as a category matures,” says Jerry Maglio, senior vice president of marketing at United Artist Entertainment.
HBO and Showtime’s fate is largely in the hands of MSOs and local cable companies, over which they have no control. “The issue is that pay networks have to promote around the operators, and the operators have never been very effective marketers,” says one studio executive with experience in the pay TV industry.
Pay TV executives also believe that MSOs and local cable systems prefer basic channels to pay channels because MSOs often hold one or more of the basic channels.
Local cable systems really generate more money through basic than they do from pay because basic has considerably larger margins. Basic revenue accounts for roughly 70% of a local system’s revenue, while pay accounts for 30%. In addition, half of off-air pay TV income go to the network, compared to 20% to 25% for basic channels.
HBO and Showtime were commonly used as an incentive to get cable TV in the early to mid-1980s, along with greater reception. CNN, ESPN, USA Network, Discovery Channel, and TNT were either not yet started or couldn’t afford the type of programming that would draw people.
“As basic channels grow more popular and offer better programming, they draw viewers away from both broadcast networks and pay channels,” says Marc Nathanson, president of Falcon Cable TV in Los Angeles. “HBO and Showtime didn’t have as much competition from cable five years ago.”
Pay-per-view television may be more problematic. For $3 to $5 per viewing, PPV, which is now accessible in 27% of cable TV homes, allows viewers access to blockbuster films several months before they air on pay TV.
Riely thinks that “PPV will take over the function that pay TV began with in the 1970s and 1980s: premium exposure of unedited films on TV.” Pay TV, he believes, will become more like basic networks in the future, with a greater selection of shows than movies and probably some type of advertising.
HBO has already taken the first steps in this manner. Despite the fact that large Hollywood movies will continue to be the channel’s backbone, Fuchs is pushing the channel towards original programming, high-profile specials, and sports. These shows, particularly comedy specials and boxing fights, are then promoted as “events” and used to entice viewers to subscribe.
“We have to offer more daring programming now,” Fuchs says, referring to adult sitcom “Dream On” and documentary series like “Real Sex.” One lasting benefit of paid television is that it may air programs with violence or nudity that networks and basic cable channels would not touch.
However, few experts believe that sex, violence, and sports will be enough to propel pay television to the same levels of popularity as it was in the 1980s. Furthermore, HBO and Showtime have long-term contracts to purchase Hollywood films, leaving little money for alternative programming.
Analyst Gerbrandt observes, “Nobody put a gun to their heads.” “They each held a gun to the other’s head.”
When did cable companies start offering Internet service?
The world’s most inventive technological platform is being built by cable ISPs. Cable companies have been investing in American infrastructure since 1948, and our fiber-rich networks have made household high-speed internet access a reality throughout the country. From super-fast gigabit speeds to $9.95 per month options for low-income homes, the cable business has a broadband service to satisfy every demand.
How many TV channels were there in 1970?
The three networks of the 1940s, NBC, CBS, and ABC, were merely “networks” in name. All of the programming was produced in real time in New York. The networks had no choice but to point a film camera at a television screen and convert video to film in order to distribute the programming to the rest of the country. The kinescopes, or 16mm films, were then reproduced and shipped to the few connected stations for later transmission. Most programming was local due to need, and cookery shows, wrestling, and cartoons make up the majority of the broadcast day.
When AT&T finished laying a system of coaxial cables from coast to coast, the networks became actual networks. Coax, the now-familiar cables that connect cable TV wall outlets to modern tuners, has enough bandwidth, or electrical carrying capacity, to carry hundreds or perhaps thousands of phone calls in addition to television signals.
For the first time, television news was able to broadcast live from Philadelphia the Republican and Democratic conventions to the rest of the country in 1952. The significance of that event for rural America extended beyond the fact that rural residents were aware of Dwight D. Eisenhower and Adlai Stevenson’s presidential campaign in real time.
- The final traces of isolation in rural America were broken by TV transmissions that could reach the farthest reaches of the United States.
- There was a common national experience since popular TV series, news, and sporting events were broadcast across the country. Researchers discovered that practically everyone was discussing about important broadcast events the day after they occurred. There was a sense of national dialogue, even if they weren’t saying the same things.
- Regional cultural disparities were ironed out thanks to television’s combined visual and aural experience, especially following the introduction of color television in the early 1960s. Regional subcultures were co-opted by a more generalized “American” culture.
- Rural populations were more familiar with different places thanks to television, making migration even more tempting.
Between 1949 and 1969, the number of American households having at least one television set increased from under a million to 44 million. Commercial television stations increased from 69 to 566. Advertiser payments to these TV stations and networks increased from $58 million to $1.5 billion.
Between 1959 and 1970, the proportion of American households with at least one television increased from 88 percent to 96 percent. There were over 700 UHF and VHF television stations in 1970; currently, there are over 1,300. By 1970, ad revenues at TV stations and networks were $3.6 billion; now, that amount has risen to more than $60 billion.
Television programming has had a significant influence on American and international culture. The 1950s have been termed the “Golden Age of Television” by many critics. Because television sets were expensive, the audience was predominantly wealthy. Television producers were aware of this, and they were aware that serious dramas on Broadway were drawing this demographic. As a result, the producers began producing Broadway shows in TV studios. Later, Broadway playwrights such as Paddy Chayefsky, Reggie Rose, and J. P. Miller adapted their works for television. Marty, Twelve Angry Men, and Days of Wine and Roses, respectively, were all turned into successful films.
As the number of TV-owning homes grew and extended to other parts of society, more diverse content became available. Formats borrowed from radio included situation comedies and variety shows. After years of toiling on the stages, former vaudeville artists like Milton Berle, Sid Caesar, and Jackie Gleason achieved stardom. Ernie Kovacs was a master of the sight gag and one of the first comedians to truly understand and use the technology of television.
Quiz shows grew popular in the 1950s until a scandal erupted. To add to the drama, producers of “The $64,000 Question” provided an enticing contender with the answers to difficult trivia questions for three years.
Many of the genres that are familiar to today’s audiences were pioneered during this time, including westerns, children’s shows, situation comedies, sketch comedy, game shows, dramas, news, and sports programming.
Television news throughout the 1950s and 1960s gave some of its best performances. Sen. Joseph McCarthy utilized innuendo and unfounded claims to exploit the country’s fear of Communism, according to Edward R. Murrow. Kennedy’s election triumph was linked to the televised debates between him and Nixon.
Live coverage of Martin Luther King’s March on Washington and filmed coverage of the civil rights movement brought those issues into sharp relief.
When President John F. Kennedy was slain on November 22, 1963, most Americans went on their televisions to see what had happened. Days and days of airtime were devoted to coverage of the tragedy, the funeral, and the aftermath by the networks. On Sunday morning, November 24, many Americans (who may have returned home early from church) were watching live coverage of Jack Ruby’s assassination of suspected assassin Lee Harvey Oswald.
Later, coverage of the Vietnam Combat was attributed with bringing war into individuals’ living rooms for the first time. “If I’ve lost Cronkite, I’ve lost the country,” President Lyndon B. Johnson was quoted as saying after CBS News anchorman Walter Cronkite editorialized against the war. Johnson chose not to run for re-election after finding he had lost the support of key Wall Street figures within weeks.
However, television provided a lot of escapism at the time. Perhaps in response to NASA’s space program, producers added science fiction to the mix of genres on television. Some of the most enduring reruns in television history were created during this time period. The best example is “Star Trek.”
It’s amazing that, in the midst of the tumult of the 1960s, some of the most popular series were firmly situated in a rural past that was swiftly fading, if it ever existed.
With its small town sheriff, his son, his deputy, and a cast of stereotyped rural people, the “Andy Griffith Show” was the fourth most popular show on television in 1960. It remained in the top ten every year until 1967, when it reached number one.
Then, in 1962, came the “Beverly Hillbillies.” The premise was straightforward. Farmer Jed Clampett discovers oil on his worthless farm and goes to California with his daughter Elly May, nephew Jethro, Granny, all of their belongings, and millions of cash, in a scene that was disturbingly similar of images of Depression-era Okies going to California.
Paul Henning, a Midwesterner from Missouri who spent 30 years in Hollywood mining his country roots, produced the show, which was an incredible bit of absurdity. The “Beverly Hillbillies” soared to the top of the ratings in its first two years on the air and remained in the top fifteen for the remainder of the decade. The show has been described as “equal parts Steinbeck and absurdism, the nouveau riche-out-of-water” by critics.
From 1963 to 1970, Henning produced “Petticoat Junction” and from 1965 to 1971, “Green Acres.” Both performances were practically as popular as each other. The petticoats in the first show belonged to Kate Bradley’s blonde, brunette, and redheaded daughters, Billie Jo, Bobbie Jo, and Betty Jo, who ran the Shady Grove Hotel. The girls provided plenty of fodder for thinly veiled farmer’s daughters jokes, and the hotel’s isolation produced a rustic setting that no longer existed in reality.
“Green Acres” took the absurdity even further. There is one fan website, “A flat-out assault against Cartesian logic, Newtonian physics, and Harvard-centrist positivism,” the show is described as “memorable television.” In search of the greening of America and high Jeffersonian ideals, lawyer Oliver Wendell Douglas (Eddie Albert) and his socialite wife Lisa (Eva Gabor) arrive to Hooterville. Instead, they find a virtual parallel reality of unbridled surrealism, replete with gifted pigs, square chicken eggs, and abiogenetic hotcakes, a universe that Lisa recognizes right away and leaves Oliver perplexed.”
Beulah Gocke (left) was one of many rural inhabitants who enjoyed the programs’ inventive absurdity. “They made fun of us,” she admits, “but being able to laugh at yourself is part of having a nice personality.”
William Luebbe (right) boasts that two of his sons have attended college and one holds a doctorate. The television programs “Farmers were represented as being backward and illiterate. That, however, was not fair to the farmers.” In his entire life, William has only owned two television sets.
The strange popularity of these country events was noticed even by critics at the time. “A few TV critics claim that many newly affluent Americans, befuddled by the technological ’60s, regard themselves as stupid hillbillies adrift in suburbia,” Newsweek wrote in 1969.
After the show’s star, Bea Benaderet, who played Kate, died of cancer in 1970, “Petticoat Junction” was canceled. Despite continuous high ratings, CBS opted to eliminate the “Beverly Hillbillies” and “Green Acres” the following year in order to appeal to a younger Baby Boomer demographic. Instead, “M*A*S*H,” “All in the Family,” and “The Mary Tyler Moore Show” were produced by the network.
The Ganzel Group’s Bill Ganzel wrote this. The book was first released in 2007. A limited list of sources can be found here.
Did cable used to not have commercials?
Although cable television was never intended to be commercial-free television, there was a common belief – at least among the general public – that cable would be mostly sustained by monthly subscription costs. However, as new cable systems are installed around the country and new programs are created on a regular basis to fill the void, cable executives are talking as casually about prospective advertising profits as they are about programming opportunities.
“The floodgates for cable advertising have opened,” says Michael Dann, a leading cable television strategist. Indeed, pay television, which was formerly thought to be free of commercial interests, is gaining traction as a viable advertising medium. To be sure, big premium cable services like Home Box Office and Showtime, whose programming is primarily comprised of theatrically released films, adamantly refuse to take advertising.
“We’ve learned that advertisers aren’t passive,” says Michael Fuchs, Home Box Office’s senior vice president of programming. “From a creative standpoint, once you have marketers on board, they believe they have a voice.” We’ll keep things as they are.”
However, when RCTV, the paid channel recently founded by Rockefeller Center and RCA, launches its programming service early next year, it has indicated that it would show commercial messages in addition to the BBC programs that were previously a hallmark of public television. Other members of the industry will, of course, be keeping a careful eye on the venture. (The Corporation for Public Broadcasting, which is seriously considering accepting product as well as institutional advertising due to cuts in government financing, will be among the interested observers.)
When did cable TV start in NYC?
The number of television sets in use in the United States increased from a few thousand to almost 60 million between 1945 and 1960. Despite the fact that many of the programs aired originated in New York City, many residents of Gotham had to deal with gradually deteriorating signal reception. New structures in the city’s vertically expanding city obstructed or reflected over-the-air signals, resulting in a blurred, speared, or distorted image. Living on the Upper West Side during the “BC” (Before Cable) era, one inhabitant compared viewing television to “going sightseeing in a heavy fog.” Building a Community Antenna Television (CATV) system was one of the answers to the problem. This meant putting up a master antenna in a good spot and then wiring coaxial wire from the antenna into individual residences, ensuring that the signal was not obstructed.
In 1962, New York City became the first city in the world to have cable television. Sterling Information Services, a subsidiary of Sterling Movies USA (later renamed Sterling Communications, Inc.), built a television studio and installed a coaxial cable system in that year, linking it to several hotels in Manhattan using the Empire City Subway Company’s existing ducts. Tourists and other out-of-town visitors may use the system to get information on the different events and attractions that New York has to offer. The service was especially effective during the 1964-1965 New York World’s Fair, which encouraged other big cities to adopt similar systems.
What was cable before Comcast?
Comcast, or Comcast Corporation, is a significant American provider of cable television, entertainment, and communications goods and services. It was formerly known as American Cable Systems (196369).
When did cable TV start in Ohio?
The cable-TV sector in Columbus saw a period of innovation in the late 1970s.
Construction of KBLE, a new cable television system, began in December 1977. It first aired in September of 1978. KBLE was the fourth company to join the Columbus market, but it boasted a unique selling proposition.
It was the first black-owned and controlled cable-TV system in a major U.S. market, founded by Columbus native and Capital University Law School graduate William Johnson.
The company had the exclusive right to serve the Near East and Northeast. According to Johnson, the new system was created to meet the requirements of the African-American population, which he claims is underserved by commercial television.
KBLE was a cable provider until 1985, when it was purchased by Pennsylvania-based Tele-Media Management Corp. Also in December 1977, near Olentangy River Road and 3rd Avenue, Warner Amex introduced QUBE, an interactive television service. The interactive project included only six cities, with Columbus being one of them.
Subscribers could contact with the programming station via consoles attached to set-top converters, which made QUBE unique. QUBE had 30 channels and employed over 400 employees during its height, providing content eight hours a day.
QUBE gave birth to a number of now-famous cable networks. Nickelodeon originated as a QUBE show named Pinwheel in Columbus. MTV has its origins in QUBE as well.
QUBE was on the decline by 1984, owing to the high cost of equipment and compensating the workforce. The QUBE approach, on the other hand, gave a glimpse into how people currently interact with television broadcasts via cellphones and cable on-demand content.
What came first HBO or Showtime?
Showtime Networks, Inc. is a subscription-based cable television network that owns and operates Showtime, The Movie Channel, and FLIX, as well as related multiplexed digital networks such as Showtime Extreme, Showtime Women, and Showtime HD. The company also broadcasts pay-per-view sporting events and concerts, owns and manages the Sundance Channel, and has a joint venture in Turkey with Zone Vision to broadcast an ad-supported network. After HBO and Starz, the company’s hallmark network, which broadcasts a mix of recent big movies and original programs such as The L Word and Fat Actress, is the third most popular subscription cable channel in the United States.
Showtime Networks, Inc. (SNI) was founded in 1976 by Viacom, Inc. (formerly a part of CBS but broken off in 1971 due to antitrust concerns), which launched a new subscription-based cable television network in the pattern of market leader Home Box Office (HBO). Showtime began airing on many Viacom-owned cable systems in northern California on July 1, 1976, for a monthly subscription fee of $9.95 ($2 more than HBO). Showtime debuted in the United States in 1978, and by the end of 1981, it had 2.8 million subscribers, a third of HBO’s total. That year, the network turned a profit for the first time.
In 1982, Showtime began filming new episodes of The Paper Chase, a critically praised drama about law students that had premiered on CBS in 1978 for only one season. The Showtime adaptation’s creator and main stars would be involved, and it would go on to be produced for three more seasons. The show was shot on the 20th Century Fox property for $500,000 per episode, making it the first original cable series shot at a major studio. Other original programming, such as a comedy series called Bizarre, were also being developed at the time, but the network’s bread and butter remained recent Hollywood hits.
In September 1983, the company merged with The Movie Channel (TMC) in a joint venture between Viacom International, Warner Communications, and the American Express Company, with Viacom International, Warner Communications, and the American Express Company owning 50 percent, 40.5 percent, and 9.5 percent, respectively. TMC was a pay-cable channel with around half the number of subscribers as Showtime. In December, the business signed a five-year, $500 million contract with Paramount Pictures that gave it the rights to air its films, as well as a $40 million deal to buy a small pay-cable service named Spotlight. TMC had 2.6 million subscribers, whereas Showtime had 4.8 million.
It’s Gary Shandling’s Show, a sitcom starring stand-up comedian Gary Shandling, premiered on Showtime in 1986. After episodes aired on Showtime, the innovative half-hour sitcom received critical acclaim and was later carried on the new Fox broadcast network. In the same year, the company began broadcasting boxing matches as pay-per-view events, and eventually formed a deal with famed boxing promoter Don King for a regular series of bouts involving top boxers such as Mike Tyson and Evander Holyfield. SNI generated $420 million in revenue by 1988, despite a $13.3 million deficit for the year.
Showtime’s parent company Viacom sued HBO and numerous cable TV businesses it also controlled in 1989, alleging antitrust violations that prevented Showtime from having a fair competitive advantage and seeking $2.4 billion in damages. By this time, Showtime Event Television, the company’s pay-per-view division, was airing boxing events as well as concerts by acts such as the teen-pop group New Kids on the Block, which fans could watch “live” on TV for roughly $20. TMC, a sister network, continued to air only theatrical films. In 1989, Viacom entered into negotiations with TCI, a cable system operator, to buy half of the company for $225 million. Negotiations lingered on and were eventually abandoned while TCI prepared its own Showtime-style services, Encore and Starz.
While the total number of pay-cable subscribers increased year after year in the late 1970s and early 1980s, there was a slowdown in the middle of the decade as home videocassette players and rental tapes made access to recent hit movies, which had long been the cornerstone of channels like HBO and Showtime, not only cheaper and more convenient for viewers, but also more timely, as the tapes were available up to six months before titles aired on television. While many new basic cable channels (such as commercial-free American Movie Classics) were being established, cable service providers were raising their rates more frequently, making the $10 monthly fee for HBO or Showtime appear like a luxury.
Concerned about these patterns, the company suggested a new cost structure to cable operators in 1990 that would lower subscriber rates in order to grow subscription numbers over time, though the cable system would have to pay Showtime a tiny charge for all subscribers. Some businesses accepted the suggestion, while others declined. During the year, the business also named Matthew Blank, a former HBO marketing executive, president and chief operating officer of SNI, with Tony Cox continuing chairman and CEO.
FLIX, a lower-cost subscription channel that broadcast movies from the 1960s through the 1990s, including several that had already premiered on Showtime, was introduced in 1992. In August of that year, a settlement was reached in the firm’s lawsuit against Time Warner, Inc., resulting in expanded distribution of SNI offerings on Time’s cable systems, joint marketing campaigns by SNI and HBO, new collaboration between Time units and SNI sister firm MTV Networks, the transfer of Viacom’s Milwaukee, Wisconsin, cable system to Time Warner, and a $95 million cash payment from Time to Viacom.
SNI also formed a new entity called Showtime Entertainment Group in 1992, which would produce up to 20 original movies per year for the network, as well as some of its ongoing series, such as Fallen Angels, which would be helmed by notable performers like Tom Cruise, Tom Hanks, and Sigourney Weaver. Remakes of 1950s American International drive-in films like Rock All Night and Dragstrip Girl, directed by Quentin Tarantino and John Milius and produced in collaboration with Spelling Films International and CBS/Fox Video, were among the other projects. The latter would be released theatrically in other countries as well.
In early 1993, the company launched its first combined marketing campaign with HBO. The multimillion-dollar promotion includes television and radio commercials, print ads, direct mail, and more. SNI also tried a new technique this year, releasing films it had produced in U.S. theaters to give them more cachet. Guncrazy, starring Drew Barrymore, and Hearts of Darkness, a documentary on the making of Francis Ford Coppola’s Apocalypse Now, were among the titles treated this way.
In 1993, a new business development unit was formed to look for brand extensions and other new items, and an exclusive seven-year deal with MGM was signed, covering up to 150 theatrical releases with a total potential value of up to $1 billion. During this time, further deals had been made with New Line, TriStar, Orion, and Castle Rock, and Viacom’s merger with Paramount Pictures would give SNI exclusive rights to that studio’s titles starting in 1998.