Sticking to Basics Might Still Pay Off in Future of Cable

Cable television showed tremendous growth during the 1980s.

ESPN, the little network that could, went from slo-pitch softball to NFL football and major league baseball. Turner Broadcasting became a major player as well, and regional sports networks, such as Prime Ticket, started popping up around the nation.

This has all been a boon for the public. Sports viewing went from a weekend activity to an everyday ritual.

But the underlying fear was that maybe all this was too good to last, that greed would take over in the ‘90s and viewers would have to pay considerable sums of money for events they have been getting for a nominal monthly fee.

Well, today we bring you some good news: Pay is not the way.

At least that’s what a number of top cable executives, in Anaheim this week for the three-day Western Cable Show, are saying.

Pay services, such as SportsChannel, are struggling, while basic services such as Prime Ticket--those you get as part of your basic monthly bill--are thriving.

Economics and the genius of Bill Daniels, the father of cable television, have set the tone. Basic cable, as Daniels always advocated, seems the way to go for sports.

Daniels owns Prime Ticket and several other regional networks, some of which make up the Texas-based Prime Network, which is jointly owned by Daniels and TeleCommunications, Inc. (TCI).

Prime Network is only one year old, but already it reaches 22 million homes through 16 regional cable networks.

It is more than twice the size of SportsChannel America. In the past year, SportsChannel grew from 7 million subscribers to 9.5 million. Prime grew from 16.5 million to 22.1 million.

The disparity in Los Angeles is far greater. Prime Ticket, which offers Lakers, Clippers, Kings and Pacific 10 Conference sports, has 4.2 million subscribers, including those in Arizona, Nevada and Hawaii.

SportsChannel Los Angeles, which lost the Clippers to Prime Ticket but still has non-King hockey and lots of college sports, has about 100,000 subscribers.

Why the big difference? Simple: One is a basic service, the other a pay service.

Prime Ticket actually is not free. Cable operators pay a per-subscriber monthly fee--anywhere from 10 cents in Arizona and Hawaii to as much a $1--to the network, and that cost is passed on to subscribers in their monthly bills.

It averages out to about 75 cents per subscriber per month. Multiply that by 4.2 million, and you’re talking about $3.15 million each month.

Meanwhile, SportsChannel, which costs roughly $10 per month, brings in about $1 million each month from subscribers.

Now factor in Prime Ticket’s higher advertising rates--because of its larger audience--and the disparity grows.

SportsChannel executives claim their appeal is to the fanatic who simply can’t get enough sports. For example, there will be 215 college basketball games on SportsChannel this season.

The SportsChannel people also say they are positioned for the future, that eventually basic services will be forced by economics to convert to a pay basis.

But John Severino, president of Prime Ticket, and Ed Frazier, president of Prime Network, dispute this.

“You may see a few more selected pay-per-view events,” Severino said, “but the way we do business now is the way we will continue to do business for years to come.”

Said Frazier: “We can make more money by charging less. It’s as simple as that.

“It’s what the viewers want, and it’s what we want. Now we have to educate the teams.”

For years, sports teams have seen pay TV as the pot of gold at the end of an already money-filled rainbow.

But the Dodgers and the Angels, for example, haven’t had great success in pay TV. They tried pay-per-view and, after that failed, went the SportsChannel route with moderate success at best.

“Many teams wrongly think that they must be on a pay service for two reasons,” Frazier said. “One, they think that’s the way to make the most money to offset their rising costs, and, two, (they think) that showing home games on a basic channel will hurt attendance at the gate.

“Well, it’s been proven that there is actually more money in basic cable. And we’ve taken surveys that indicate televising home games does not hurt attendance.”

A few years ago, when Frazier was president of Home Sports Entertainment, a Texas regional network, he had Gallup survey subscribers determine if televising Texas Ranger home games affected attendance.

“We asked: ‘Are you attending fewer Ranger games now that you can watch home games on HSE?’ What we learned was, 11% said yes, they were attending fewer games, but 22% said they were attending more. We viewed that as a positive result.”

Prime Ticket, launched in 1985, has made great strides in the past two years.

In the beginning, there were Laker and King telecasts and not much else, at least not much quality programming.

But now, through its affiliation with the Prime Network, which provides national programming, plus the development of its own programming, Prime Ticket has become a winning ticket.

“Press Box,” the half-hour local sports news program that began in October, and the two-year-old “It’s Your Call,” with host Bill Macdonald, are examples of the kind of programming Prime Ticket is able to develop through its financial growth.

Two years ago, advertising provided only 15% of Prime Ticket’s revenue, but that has grown to about 50%, and Severino’s eventual goal is 80%.

Advertisers are attracted to regional networks such as Prime Ticket because of the home-team appeal, which national networks can’t offer.

The appeal for viewers, besides the obvious one of lower cost, is also convenience. Pay-per-view events and monthly pay services require a conscious effort. The customer has to order the service.

With basic cable, it’s basic: Just turn on your set.

TV-Radio Notes

It’s a big NFL weekend, highlighted by Monday night’s game between the San Francisco 49ers (10-1) and the New York Giants (10-1). . . . With the Rams and the Raiders on the road Sunday, Los Angeles gets an extra game--Miami at Washington at 10 a.m. on NBC, with Marv Albert and Paul Maguire reporting. Tim Ryan and Irv Cross will work the Ram-Cleveland game on CBS at 10 a.m., and Dick Enberg and Bill Walsh will be in Denver for the Raider game on NBC.

The Heisman Trophy will be presented live on CBS Saturday, at the end of a 30-minute show scheduled to begin at 3:30 p.m., or after the Auburn-Alabama game, which begins at noon. Texas A&M; and Texas will play in the first game of the CBS doubleheader. Rocket Ismail, Shawn Moore and Eric Bieniemy will be at the New York Downtown Athletic Club, and CBS will have David Klingler and Ty Detmer on the air by remote broadcast. Klingler will be in Tokyo, where his Houston team meets Arizona State, and Detmer will be in Honolulu, where BYU plays Hawaii. . . . After the Heisman show on Channel 2 will be the first of a series of three NFL Films segments, “Silver Memories,” commemorating the acclaimed company’s 25th anniversary.

ESPN’s U.S.-Australia Davis Cup tennis coverage will begin today at 2 p.m., Saturday at 9:30 a.m. and Sunday at 10 a.m. . . . Ross Porter was among those celebrating the news that Nevada Las Vegas is eligible for the NCAA tournament. Porter is the radio voice of UNLV basketball and shares TV announcing chores with Chick Hearn. Porter and commentator Denny Hovanec will be in Vancouver Saturday for the Rebels’ game against Alabama Birmingham, which will be televised on Channel 56 at 8:30 p.m. . . . The November sweeps rating period shows Channel 4 is still the clear leader of the Sunday night sports shows. Channel 4 averaged a 6.1 Nielsen rating during the sweeps, Channel 7 a 3.9 and Channel 2 a 3.4.