Risky Coming of Age for Pay Per View : Television: The new cable ventures offer Hollywood blockbusters at $4 or $5 each. But can last summer’s hits still find an audience?

Five years ago a partnership of Hollywood studios, some cable operators and what might be called some space-age entrepreneurs, set out to turn the American home into a video store.

They blessed their new, not-so-free enterprise with the bland name of “pay per view,” and developed systems that would send movies and live pop concerts and wrestling matches by satellite to cable systems which in turn would charge their video shoppers.

The first year they were able to lure about 500,000 subscribers across the country.

This month, the two major pay-per-view networks, Viewers Choice and Request, claim they have 14 million household-customers and that they’ve hit a benchmark in their development: $1 billion worth of Hollywood movies based on box office and video-store sales.


The big ticket movie items being sold directly to home viewers include:

“Pretty Woman,” the Julia Roberts-Richard Gere movie that opened last March and has grossed $175 million at box offices, and since last month at least $103 million in video sales.

“Total Recall,” the Arnold Schwarzenegger adventure has attracted $118 million at theaters, $85 million in videos.

“The Hunt for Red October,” $119 million in theaters, $37 million at store counters.

“Back to the Future III,” $83 million and $33 million, respectively.

“Teenage Mutant Ninja Turtles,” $133 million in tickets but a whopping $209 million so far in video sales.

“Bird on a Wire,” $68 million and $33 million respectively.

If pay per view is new or remote to you, its basic market concept shouldn’t be. You pay for what you get. No matter what you watch on television, the viewer pays: your excursions to the super market pay for free commercial television, you pay monthly for basic cable, more for the premium, pay channels.


Pay per view charges per pop, per peek: $4 to $5 a movie on average, $20 to $25 for rock music, much more for some sports events, such as the recent Douglas-Holyfield alleged mayhem which took in $35 million for 7 minutes of action. You get pay per view if your cable company is technologically current and its sales staff properly aggressive. While pay per view traces its roots to a Palm Springs experiment in the ‘50s, what we’re seeing now--non-stop movies, occasional live specials, sporadic sports, wrestling exhibitions--has only been satellite-beamed from the skies regularly for the last 5 years.

Pay per view is the little show business engine that just might.

In the past 5 years it has moved into 14 million cabled homes. In another 5 years its wildest dreamers talk of upwards of 70 million homes and early retirement to Monaco. They’d settle for 20 million and a weekend in the desert.

For the most optimistic in the infant pay-per-view business, this month’s big Hollywood titles will help establish its presence and possibly bring in needed new customers, something pay per view and pay cable need in their competition with broadcast television and the neighborhood video store. They believe that despite the exposure these Hollywood films have had so far, the home audience will still pay to see them.


Others see it as a month that holds certain peril. How many people, they counter, are there left who haven’t seen “Pretty Woman” at the local movie house or bought its video for $20 or rented it for about $2? Banking on big names and big titles may be deceptive.

Of the five busiest rental movies at video stores, four went into direct competition on pay per view this month.

Pay per view earns its keep from two different sources. The steady stream of movies--on some systems up to 230 a year--provide the bread and butter. Special events like last Friday night’s live satellite broadcast of the “New Kids on the Block” concert, carried by 37 systems in the Los Angeles area and scheduled for repeats this Friday(14) and Sunday plus wrestling and a rap event are the dessert, the fiscal icing on the cake.

Suzan Couch of SET Pay Per View sees the icing this way: A live show like New Kids might attract 3% to 5% of the 14-15 million homes receiving pay per view. That would be 400,000 households spending an average $22 on one night’s stay-at-home. That would also be $9 million earned away from the box office. Half of the money goes to cable operators who, the pay per people hope, would go out and sell more people on the virtues of their business.


Thirty years ago film studios flirted with the idea of pay television, of offering movies for a fee directly to home audiences, eliminating middle men, eliminating negative costs, getting instant return from sales. But that idea never turned on any sets. In time the television networks grew strong, cable television developed, then home video stores popped up in every shopping mall.

Pay per view gets its movies a few months after theaters and video stores but before they go to cable and network TV. Some observers believe the growth of pay per view has slowed the growth of premium or pay movies on cable. If pay per view’s audience and its collective wealth ever build to something close to 20 million households a major shift may occur in our moviegoing habits and a 30-year-old idea just might work. Officials at two Southern California cable companies, Dimension and United Artists, say that the December pay per view movies so far are selling at a faster rate than those of previous months.

Technology or, in some cases, the lack of it, has retarded the growth of pay per view. Addressable systems--devices in the home that allow viewers to order a movie, then bill for it without any bother--have been slow in coming. Some cable systems also have run out of space on their lineups. Two of the largest cable operators in Los Angeles and New York--the Century and Manhattan systems--have yet to include pay per view in their lineups. Cable operators are studying new delivery systems, some incorporating fiber optics rather than copper wiring that would expand their channels to more than 100.

Then there’s the issue of schedules. Movies run on pay per view in a random, alternating--chop suey, is how one studio executive describes it--style generally a different one every 2 hours, day and night, for 1 month. Rarely does a movie hit prime time more than 12 or 15 times during a month. One movie company, Warner Bros., wants to change that system and has persuaded the pay-per-view networks to try an experiment called Continuous Hits for the next 2 years. Each week, one movie rather than a handful would run solely and continuously, through most of the day and night. Subscribers could order up the movie at their convenience.


In its short history, pay per view has moved to a position where it is a significant financial partner in bringing certain sporting events (until now boxing and wrestling predominate) and entertainment specials to a home audience. Many in the industry are saying that the 1992 Olympics may prove to be the real benchmark so sought after by analysts. NBC will cover some of the Olympics with pay-per-view events. If the Olympics telecast brings in a large audience pay per view will truly be the new kid on television’s block. Others in television see pay-per-view sports as the answer to the expanding costs of player salaries.

Pay per view will only survive if the cable companies are successful in selling the idea to their customers in larger amounts. That’s why its programming is aimed exclusively at mass audiences. News, certain movies, plays, the arts so far have no place in its schedule.

One network executive says that the secret of pay per view, especially with its third-time-around movies, is in playing “hits as much as you can, but look for T&A; titles and the sleepers. ‘Elvira, Mistress of the Dark’ made more money for us than most $40 million movies.”

For pay per view there are no sleepers this month. Just a question that might have been left over from a past political era:


How many of us would want to buy a used movie from it?