The Jury Is Still Out on Olympic Pay-TV : Communications: With 10 weeks to go till the start of the Barcelona Games, cable television operators are holding their collective breath.

There’s a line about the upcoming pay-per-view TV “Triplecast” of the Barcelona Olympics that wouldn’t get laughs at NBC but does get repeated: “If you have a job, you can’t watch it, and if you don’t, you can’t afford it.”

Ever since NBC and Cablevision Systems Corp. became partners in the $200-million venture, which kicks off July 26, a big question has been whether people will pay up to $170 for 15 days of 12-hour-a-day live coverage (plus 12 hours of taped replays) on three cable TV channels, when they could see 160 hours of action free on NBC’s regular broadcasts.

That question is still hanging. And other unanswered questions--especially about how the event is being marketed and how smoothly orders will be taken--are tightening the stomachs of cable TV operators across the country.

With only 10 weeks left until the Triplecast--the most ambitious, most complicated, most expensive pay-per-view event ever--some cable TV insiders are hoping for the equivalent of a dead heat: They won’t mind not making money on it as long as it doesn’t give pay-per-view an ill-timed black eye.

It’s an important concern because the cable industry is counting on pay-per-view, after 30 years in the background, to step up and become a major profit earner. Much of the technology now being developed to increase channel capacity and make distribution more targetable is aimed at turning U.S. television sets into multiplex home theaters--pay-per-view theaters.

On the plus side, some operators say the Triplecast has already raised awareness of pay-per-view and permanently expanded the potential audience for future shows.

Surveys also show there is a big appetite for commercial-free coverage, which is one of the Triplecast’s main selling points.

Still, there are fears that NBC and Cablevision have bitten off more than the operators can chew. Mishandling an event of this magnitude, they say, would alienate customers that the operators must live with long after NBC folds up its Barcelona production tent.

And there have been enough snafus already to fuel such fears.

“From our point of view, this whole thing came across as designed to accomplish what NBC and Cablevision wanted to accomplish, with very little sensitivity to either the operators or the consumers,” said Amos Hostetter, chairman of Continental Cablevision of Boston, the nation’s third-largest multi-system operator with 2.8 million households.

Among Hostetter’s complaints was a glitch at the event’s national voice center--the bank of phone operators at the other end of the Triplecast’s widely publicized 800 number. It is the voice center’s job to field questions and either pass on sales leads to the local cable companies or take orders directly.

Continental, leery of letting anyone but its own salespeople handle its customers, asked the voice center to refer Continental subscribers back to their local cable systems, Vice President Ron Stengel said.

But the message got garbled. For systems representing as many as a quarter of all Continental households, the voice center began telling callers that their cable company would carry the Triplecast.

This went on for three months until Continental discovered the mistake in April and had it corrected, Stengel said.

Problems cited by other operators include:

* NBC/Cablevision’s initial reluctance to offer a single-day option for viewers who balk at paying $95 to $170 for multiple-day packages. Under pressure from operators, the partners created a daily option at $29.95.

* Confusion in consumers’ minds because the marketing blitz started too early. With the Triplecast being promoted even before Christmas, some people believed that it was for the Winter Olympics.

* Feelings that NBC/Cablevision was heavy-handed in trying to persuade local operators to carry the Triplecast. Some operators were reluctant to commit three channels, plus a major marketing push, to so risky a gamble.

Responded Jim Dolan, the Cablevision vice president who has taken over command of the Triplecast from his NBC partners: “No one has ever done 15 days straight. No one has ever done 24 hours of pay-per-view. . . . This is the first time any of that has ever happened, so you can’t expect it to be really smooth.”

To complaints about high-pressure tactics, Dolan said: “When you negotiate 200 contracts with (multiple-system operators), you’re not going to make everyone happy.”

Will NBC/Cablevision be happy?

As the months have gone by, the organizers have sharply scaled back their sales expectations.

In January, NBC’s Martin Lafferty told Forbes magazine that he hoped to sign up 3.5 million households and needed 2.8 million to break even. Assuming costs of $200 million to the partners--a consensus estimate--and a 50-50 split with cable operators, that implies an average of $143 per household.

But last week, Dolan said he’d be happy with 2 million households at an average of $125 each.

When NBC bid a record $401 million for U.S. rights to the Barcelona Olympics, it allocated $100 million of the cost to the Triplecast. It also announced an advertising and promotional budget of $40 million. That leaves $60 million as the Triplecast’s share of the Olympic production expenses, an estimate that some analysts consider conservative.

Thus, if 1.5 million households buy in, the event will lose more than $100 million. And even if Dolan hits his target of 2 million, the partners still will take a $75-million bath together.

NBC/Cablevision is doing everything possible to keep the number that low.

Up to half of the promotional budget will be spent in the six weeks before July 26, Dolan said. That will buy a saturation ad blitz on cable and broadcast TV, plus direct-mail and newspaper ads.

NBC affiliate stations that agree to supply local ad time for the promo campaign will get $10 for every household that signs up.

The advertising is starting to bear fruit. An April survey by Chicago-based Strategic Media Research showed that awareness of the Triplecast in the 14- to 49-year-old age bracket had climbed to 44%, from 25% in December.

Organizers acknowledged that, as with most pay-per-view events, up to 80% of orders won’t come in until the final week.

There are bound to be delivery problems.

By the time of the Triplecast, Dolan said, the potential audience will have grown to 40 million--twice the size of any previous pay-per-view audience.

That 40 million is a squishy number, though. NBC/Cablevision has worked hard to expand the universe of “addressable” homes--those to which the show can be delivered simply by flipping a switch at headquarters.

But many of the homes--probably 5 million to 10 million--can be reached only by having the company install a device called a “trap” on the cable reception box in the customer’s home. A flood of orders from such homes could produce a logjam.

Aside from such logistics issues, expanding the audience so dramatically poses a marketing problem.

“Whenever you do major events, 75% to 80% of the universe has bought pay-per-view in the past,” said Suzan Couch, marketing consultant to SET Pay Per View, a Viacom unit that has done numerous pay-per-view boxing shows.

Well over half of the Triplecast’s potential audience will be pay-per-view first-timers, making the show harder to explain and ultimately harder to sell.

In the event’s favor will be a highly motivated selling force, according to Tom Adams, analyst for Paul Kagan Associates in Carmel. With so much on the line, local cable operators will push the Triplecast like no event before it.

“There are no mixed emotions,” he said. “Everybody’s up for it.”

Top 10 in Pay-Per-View

Fighting shows--either pro boxing or pro wrestling--have outdrawn rock concerts, movies or other sports events as pay-per-view television attractions. Partners NBC and Cablevision hope that their Barcelona Olympics TripleCast rewrites these records.

Price Households Revenue Event Date (per house) (millions) (millions) 1. Holyfield-Foreman April, ’91 $35.95 1.36 $49 (boxing) 2. Tyson-Ruddick II June, ’91 34.95 1.25 44 (boxing) 3. Douglas-Holyfield Oct., ’90 36.50 1.06 39 (boxing) 4. Tyson-Ruddick I March, ’91 34.95 1.00 33 (boxing) 5. Leonard-Duran Dec., ’89 35.00 0.7 24 (boxing) 6. Wrestlemania 7 March, ’91 29.95 0.8 23 (wrestling) 7. Spinks-Tyson June, ’88 34.95 0.6 21 (boxing) 8. Wrestlemania 6 April, ’90 29.95 0.7 20 (wrestling) 9. Leonard-Hearns June, ’89 35.00 0.6 19 (boxing) 10. Wrestlemania 4 March, ’88 19.95 0.9 18 (wrestling)

Source: Paul Kagan Associates Inc.