Fun for the Viewer, Hope for the Industry

AT the very beginning of its color revolution, the television industry faces a new one--the possibility of pay-as-you-see TV. Three companies are ready with systems to enable telecasters to charge home viewers for certain shows. Thus, the Federal Communications Commission will soon have to answer the same kind of question it faced in color: Should pay-as-you-see be made available, and if so, what system should be chosen?

From the standpoint of the televiewer, pay-as-you-see promises great benefits: better shows and no commercials. Broadway shows and top sporting events now kept off the air because of the promoters' fear of falling gate receipts would be telecast. First-run movies would supplement the antiques now filling the screens; opera and ballet, which seldom come into the living room, could be telecast. Pay-as-you-see could put the Metropolitan Opera on a solid financial basis. And pay-as-you-see, instead of keeping audiences away from such events, might stimulate as much interest in them as radio did in symphony orchestras.

All three pay-as-you-see systems use the basic technique of broadcasting "scrambled" signals that form a picture only when unscrambled by a special device attached to the receiving set. Telemeter Corp., 54% owned by Paramount Pictures, uses a coin box hitched to the TV set, which unscrambles the picture when the proper amount of money is inserted. Zenith Radio Corp.'s Phonevision, now awaiting an FCC decision, originally used a special unscrambling signal transmitted to the set via a telephone-line attachment, and depended on the phone company to do the billing. But now Phonevision has several alternate methods. One uses the coin box; another uses a gadget which would unscramble the TV picture when set to the right combination. Cards with the combination would be sold for each show by dealers or vending machines. Skia-tron Electronics & Television Corp.'s Subscriber-Vision works by means of punched decoding cards inserted into a device on the set.

Economically, there is no doubt that pay-as-you-see would be a boon to the cost-pinched TV industry. Of the 83 TV stations which have gone into operation since April 1952, an estimated 30% will run in the red this year; last year, no fewer than 38 construction permits for new stations were surrendered because of the bleak profit outlook. Black & white broadcasting has become so expensive that only a few of the biggest sponsors can afford more than a half-hour show; color TV will increase the costs. When the cost of Milton Berle's Tuesday night hour soared from $17,500 to $150,000 a week, it became too much even for Texaco (Buick has since taken over).

Many moviemakers, who have seen their audience shrink 40% in the last five years largely because of TV, are now in the pay-as-you-see ranks. Like Paramount, which has poured $1,000,000 into Telemeter, they think pay-as-you-see would1) win back the moviegoers lost to TV, and 2) make fans out of the occasional moviegoers. With pay-as-you-see, a whole family could see first-run pictures for only a dollar or so, v. the $2 to $4 it now costs (often plus baby sitter). Said Sam Goldwyn: "Paid television must come'." Movie theater owners naturally disagree, along with 20th Century-Fox's Spyros Skouras, who thinks that CinemaScope and other new projection systems can lure the public back to the movie box office.

Would televiewers, accustomed to free shows, pay for them? Pay-as-you-see proponents think the answer is being given in an FCC-approved test going on in Palm Springs. Calif. More than 70 TV sets were equipped with Telemeter, and for 30 days set owners were offered such attractions as the Notre Dame v. U.S.C. football game and first-run movies (Forever Female, Here Come the Girls') simultaneously with their first showing in the local movie houses. First-run pictures (at $1.35) were an 80% sellout; all Telemeter programs drew an average "attendance" of 60%. Telemeters are now being installed in the test area (at a cost of $21.75 to the set owner) at the rate of 20 a week.

Among the most outspoken opponents of pay-as-you-see is RCA's David Sarnoff, who feels that 1) charging for programs might peril freedom of broadcasting, since FCC regulation of such rates might open the door to overall rate regulations; and 2) free programs are an American tradition. Pay-as-you-see proponents fear FCC also believes the air should be free, but they see no reason why FCC cannot set aside certain channels for their use, while free telecasting continues on all the other channels. They think the tradition of free programs is no more sacrosanct than the tradition of free roads; those who want to travel faster now pay to use toll roads. In the same way, they feel that televiewers willing to pay to see better programs should be permitted to do so. distressed," while retaining the present provision permitting losses to be carried forward five years.

P:Allow farmers to deduct full cost of conservation practices (up to 25% of their gross income), instead of present limited deductions.

P:Put corporations on a partial pay-as-you-go tax basis by having them pay part of their estimated taxes during the last half of the calendar year (the first half of the Government's fiscal year), thus simplifying the Treasury's debt management. Corporations now pay their whole tax bill the year after'it is earned.

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