The Federal Communications Commission is sitting on the fate of a whole batch of proposed new cable networks. Most of the new channels are so specialized that the success or failure of any one is unlikely to have much effect.
But taken together, the proposed channels such as one for recovering addicts and another for military news could provide essential programming in a 500 -channel universe of the future.
Meanwhile, until the FCC spells out exactly how the Cable Reregulation Act of 1992 applies to the biz in its day-to-day operations, cable operators are in no mood to sign up for new networks.
‘On hold until April’
“Everybody is on hold until April, when the Commission comes out with its rules,” said Ray Joslyn, group head of Hearst Entertainment & Syndication, at the Western Cable Show in Anaheim last month, where the new networks kept a low-key presence.
Most of these networks aren’t even going out of their way to seek publicity. They include:
o Worship, a religious network put together by Bud Paxson, former head of the Home Shopping Network.
o Americana TV, a service grounded in country/bluegrass music.
o The Military Channel, which will focus on news, docus and movies related to the armed services.
o RecoveryNet: The Wellness Channel, which will promote services for former addicts.
o Ole TV, a Spanish-language net.
o Prime Plus, a sports-news operation tied to all-sports Prime Network.
o New Culture Network, which will tap into the vast storehouse of foreign films and independently produced American movies.
o R&B TV, a music-video net.
Washington may start sending clear signals under the Clinton administration that cable operators will get slapped down if they raise their rates to subscribers.
If that happens, operators will shun any new networks that charge even a couple of pennies a month for each subscriber because the cable systems won’t be able to pass along these tariffs to their customers.
Even more frightening to the operators, said Lloyd Werner, senior VP of sales and marketing for Group W Satellite Communications, “is the specter of retransmission consent forcing operators for the first time to pay monthly subscriber fees to carry the signals of TV stations.”
Werner used as an example Time Warner’s cable operation, which serves 6.84 million subscribers.
If each of the company’s cable systems had to lay out an average monthly subscriber fee of 10 cents for each of five TV stations in a given market, that’s 50 cents a month, or $ 6 a year.
Multiplying that figure by the TW subscribers yields a blood-curdling $ 40 million a year, which would come right off the company’s bottom line, he said.
“I can’t imagine,” he continued, “how a new cable service with one concept and limited financing will be able to get off the ground in these circumstances.”
But what if all the entrepreneurs with ideas for new networks get discouraged by the odds against their getting off the ground?
If these proposed networks all go away, operators will face an explosion in channel capacity by the mid-1990s and then discover there’s nothing to fill them with.