The concept of selling a new theatrical movie to pay-per-view for a run prior to its release in theaters has picked up an endorsement from an unlikely source: Joseph Collins, chairman and CEO of Time Warner Cable.
Speaking as a panelist during the closing session of the National Cable TV Assn. convention here June 9, Collins said that such a PPV showing “could generate in one night more revenue than the picture could make throughout its entire theatrical release.”
Of course, Collins — who’s not concerned about the apoplectic reactions of theater exhibitors and videostore owners — is interested in the big bucks that would flow from a pre-theatrical PPV movie into the coffers of the cable systems owned by Time Warner, the second largest MSO in the United States, reaching more than 7 million subscribers.
Another panelist, Ted Turner, chairman of Turner Broadcasting Systems, who has made no secret of his desire to start producing big-budget theatrical movies , said that “theaters will not be supplanted,” even with the availability to cable subscribers — by the mid-’90s — of pictures not only before their theatrical run but as part of the predicted explosion of PPV movies in a window six months after they leave the theaters. “The video stores are the ones that are rightly concerned” about this development, Turner said.
The beauty of pay-per-view for Turner Broadcasting, he continued, is that the 4,000 MGM, Warner Bros. and RKO Radio theatrical oldies that Turner owns will start becoming available in PPV as digital-compression technology allows cable subscribers to call up a title from these vast movie libraries by the flick of a remote-control button.
Jeff Greenfield, media analyst of ABC News and moderator of the panel, tried to generate controversy by inviting Turner to criticize John Malone, chairman of Tele-Communications Inc., the largest cable operator in the country, for helping 20th Century Fox create a new broad-based entertainment cable network that could pull audiences away from Turner’s TBS, TNT and The Cartoon Network. “It’s not the best thing that ever happened,” Turner said, particularly since TCI owns more than 20% of Turner Broadcasting.
The new Fox cable network, which TCI will bankroll to the tune of $ 30 million a year for five years, “will put pressure on existing cable networks,” Turner continued. “But there’s not much we can do about it — we’ll have to survive.”
What’s particularly galling to Turner and to cable operators that are getting pitches to take the new network is that Fox is logging a big percentage of the TCI payment as a fee for the carriage by TCI’s cable systems of the seven Fox-owned TV stations and of the vast majority of its affiliates. The industry consensus is that buying the rights to Fox’s new network for its cable systems is a way for TCI to continue saying, technically, that it’s paying for a program service, not for retransmission consent.
The most optimistic note struck in the session arose from a comment by Greenfield, who marveled at the fact that phone companies and cable operators are announcing many joint ventures when last year at this time “AT&T was about as popular as Saddam Hussein.”
Citing the recent decision by U S West to invest $ 2.5 billion in helping Time Warner Cable upgrade its systems over the next five years, another panelist , Brian Roberts, president of Comcast Corp., the fourth largest cable operator in the United States, said, “That’s a tremendous vote of confidence in the architecture of the cable industry.”
“If the phone company was Saddam Hussein a year ago,” Roberts concluded, “then this year it’s the Sultan of Brunei, ready to invest lots of money in cable.”