A sizable percentage of the 1.1-million New York-area subscribers of Cablevision Systems Corp. will soon be able to buy cable networks such as USA, ESPN, CNN and Discovery individually, for $ 1.95 apiece, instead of as part of a standard basic package.
Declaring that the technology will kick in within the next two months, Chuck Dolan, chairman of Cablevision Systems, the fourth largest cable operator in the U.S., said at a news briefing that he’ll continue to offer the 30 -cable-networks-for-one-price tier, which many subscribers will stick with because they like its convenience and all-inclusiveness.
“But,” added Bill Quinn, president of cable operations for Cablevision Systems, “our ultimate goal is to give our subscribers as many choices as possible. The subscriber should pay only for what he wants to see — even the traditional networks should be available a la carte.”
But pricing all cable networks separately “could destroy our business overnight,” says Kay Koplovitz, president and CEO of the USA Network and the Sci-Fi Channel. “Neither of my networks are available a la carte. I want mass distribution of my networks.”
Most of the mass-circulated cable networks harvest about two-thirds of their revenues from advertisers, getting the rest from monthly subscriber fees paid by the cable operators. Mitzner says TNN would come out OK if a substantial part of the 57-million subscribers that get it now as part of their standard basic tier agreed to buy the service for a monthly fee.
“Even in a reduced universe,” he continues, people who pay extra for a net “tend to become avid watchers, and that would boost the ratings.” And the cable operator would probably split monthly subscriber fees with the network, which would lead to a big bump-up in dollars rolling in from cable systems.
In that situation, “we’d be supportive of what ends up as helpful to subscribers,” Mitzner says.
The only specific prices mentioned by Dolan were the $ 1.95 a month Cablevision plans to charge New York-area subscribers for each new cable channel such as the Cartoon Network.
The occasion for Dolan’s comments about pricing a la carte was the announcement at Cablevision’s Long Island headquarters of completion of the first stage of an electronic superhighway covering 3,000 network miles that will feed all sorts of services to homes and businesses in the New York area.
With final completion scheduled for 1995 at a cost of $ 300 million, the fiber-optic superhighway would deliver to Cablevision subscribers — among other services — 100 or more pay-per-view channels, a number of interactive shopping channels, video-conferencing capability and bank-at-home services.