Adelphia Considers Adding Adult Channels

Adelphia Communications’ much-publicized financial problems--culminating in the arrest of three members of its founding family Wednesday--have more pragmatic implications for the cable operator’s estimated 1.2 million subscribers in Southern California. They could see adult entertainment become available on their channel lineup and already find themselves being courted by a satellite TV service hoping to cash in on the company’s woes.

Among the changes being contemplated by Adelphia--the largest cable TV provider in Southern California--is the introduction of adult channels such as Playboy’s Spice and the Hot Zone, which company founder John Rigas had refused to carry on moral grounds. Although standards vary by communities, Adelphia was alone among the top eight cable system operators in setting forth such a blanket policy.

Not surprisingly, suppliers of adult entertainment have been quick to point out the irony of that stance, given that Rigas and two of his sons were not only arrested on securities, wire and bank fraud, but were also sued by their former company Wednesday, in a lawsuit claiming that they are “responsible for one of the largest cases of corporate looting and self-dealing in American corporate history.”

In regard to introducing adult channels, Adelphia spokesman Eric Andrus confirmed that the Coudersport, Pa.-based company, which filed for bankruptcy protection in June, is “looking at a range of additional revenue-generation steps that it can take, and at this point nothing has been ruled in and nothing has been ruled out.”

In fact, representatives for Playboy Entertainment Group and New Frontier Media, an adult entertainment firm in Boulder, Colo., said they have already engaged in talks with Adelphia’s new management. Playboy, which acquired Vivid TV, Hot Network and Hot Zone last year, operates seven networks that offer varying degrees of explicit material.

Playboy and other adult entertainment companies say they are excited about the possibility of having access to Adelphia’s nearly 6 million subscribers across the United States. In the Los Angeles area--the nation’s second largest television market, reaching 5.3 million households--Adelphia provides cable to more than one-third of cable homes and more than 20% of all households.

Playboy Entertainment Group spokesman Scott Barton said there is “a huge market out there” for adult entertainment denied access by Adelphia, and added that because so much production of adult films occurs in the Los Angeles area, “it’s almost like being in Nebraska and not having anyone sell beef.”

Groups that applauded the previous position, however, are urging Adelphia not to alter its strategy in pursuit of a quick financial fix. “I would encourage the new management not to carry pornography,” said Jan LaRue, chief counsel for the Washington-based lobbying group Concerned Women for America, which seeks to promote biblical values. LaRue added that many consumers “don’t want to be subjected to it.”

Still, Ken Boenish, president of New Frontier’s the Erotic Networks, noted that with digital safeguards, Adelphia can meet the demand from viewers who want the option of adult entertainment while preventing those who don’t from being exposed to it in any way.

“Their decision never came from customer outcry or community standards,” he said of Adelphia. “Clearly, Los Angeles is not a conservative community.”

Boenish added that adult films--a market that exceeds $800 million annually via cable and satellite TV--provide much higher profit margins than other pay-per-view movie titles and that the anticipated shift by Adelphia systems, even if they are eventually sold to another operator, will be “a significant boon to us.”

Adelphia’s perceived vulnerability, meanwhile--including the many customer complaints registered when the company began making the transition to digital cable--has also inspired DirecTV to target Adelphia in a radio and print ad campaign initiated this month.

“Satisfied With Adelphia Cable? We didn’t think so,” read one ad in The Times, offering discounted installation as well as $39.99 monthly service to Adelphia subscribers in Los Angeles, Ventura, Riverside and Orange counties.

Although the advertising mentions Adelphia by name, DirecTV has not limited the offer to its subscribers.

A spokesman said it was too soon to tell what response the campaign has generated, but Adelphia has countered with its own print ads, reassuring subscribers that the company intends to proceed with service upgrades and “will continue to be available to you uninterrupted.”

DirecTV declined to provide distribution figures, but data from Nielsen Media Research indicates that 13% of households in the area (or fewer than 700,000 homes) receive programming from “alternate delivery systems,” a category that encompasses satellite dishes, with DirecTV accounting for the lion’s share of that total.

“Certainly, the competition is circling,” Adelphia’s Andrus noted.

Adelphia bought its way into Southern California in 1999 by acquiring Century Communications, and began dropping adult networks on those systems the following year. Its service currently reaches more than twice as many homes as AT&T;, the next largest cable provider in the Los Angeles market, which has a little more than 500,000 subscribers.

Despite the barrage of headlines about Adelphia’s former management, cable industry representatives say that as long as the company fulfills its obligations and viewers receive the programs they want, consumers will have little incentive to make a switch. As one cable executive put it, “In the end, we know that consumers don’t sit at work and say, ‘Gee, I can’t wait to go home and watch Adelphia.’ ”