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Cable Management

Program Services

Local, Over-the-Air Stations

Local stations have two options with regard to their carriage by cable systems. Stations may opt, according to the Communications Act of 1994, for must carry---which requires the cable operator to carry that local over-the-air signal if within fifty miles of the cable operator's headend; or compensation, which requires either a cash payment to the local station--- which few operators agree to pay...or an agreement with major station chains to carry a cable network owned by the station group. For example, ABC negotiated the launch of ESPN2 in 1993 on cable systems in exchange for granting cable operators the right to carry the owned-and- operated stations of then-ABC/Capital Cities. Similarly, Scripps-Howard Television negotiated the launch of Home and Garden Television, in exchange for granting carriage rights to its stations (at the time including WMC-TV in Memphis).

A local station may demand market exclusivity from carriage by another out-of-market station affiliated with the same network. Federal legislation would permit WBBJ-TV to demand removal of WPTY from the R-Media system in Jackson. However, the station has opted not to do so, because in fringe areas of west Tennessee---WPTY would have the right to request the same removal of WBBJ. WBBJ does exercise that right with regard to WKRN in Nashville, which is not carried on the local system.


Distant Signals

Beginning with the active efforts of Ted Turner to market his then-WTCG in Atlanta in 1976, the era of the national superstation was born. Turner's channel 17 in Georgia was attractive to cable systems because of his Atlanta Braves, Atlanta Hawks, Atlanta Flames hockey (at the time), and pre-season Atlanta Falcons games, as well as a heavy diet of Southeastern Conference and Atlantic Coast Conference basketball. WTCG (later renamed WTBS, now TBS Superstation) also featured a popular package of syndicated evergreen shows, including the perennial Andy Griffith Show and Leave It to Beaver.

Eventually, cable operators would add other big-city independent stations (not affiliated at the time with networks), which offered major sports packages. WGN in Chicago, with its Bulls, Cubs, and White Sox games, became the second most desired superstation. Others which still exist and are selected across the country are WWOR (New York), WPIX (New York), KTLA (Los Angeles), WSBK (Boston), and KWGN (Denver).

Local stations fought the expansion of superstations on cable. The primary reason was over syndicated programming. Many of the superstations imported by cable systems carried syndicated shows for which local stations had paid expensive licensing fees to carry in a specific market. Station managers feared ratings erosion would occur if viewers could see three or four airings a day of Andy Griffith and other series on stations other than one in the local market.

Cable operators are now required to offer local stations syndication exclusivity for the first cycle of a series' syndicated reruns. If a local station owns the rights to a syndicated show in a market, a cable operator is required to black out the same show on a superstation, or the superstation's distributor is required to cover the show with another program, for which it has paid national rights.

The exception to the rule is if superstations pay national rights fees for shows, rather than license fees merely for their market of origination. WTBS is the only cable network which offers a blackout-proof schedule, because it now pays license fees based on the entire United States, rather than just the Atlanta market. WGN, on the other hand, airs Frasier in the Chicago market---but the show is covered on cable systems with repeats of Family Matters, which has passed its first cycle.

Cable systems in smaller markets are limited in the number of distant signals they can carry. Rules governing Jackson, Tn., limit R-Media to three distant signal outlets. For many years, the cable system was restricted because, in addition to TBS, WPTY and WLMT (both carried on local cable) were both considered distant signals, because they were independent stations serving the Memphis market. When WPTY became an ABC affiliate in 1995, the station no longer qualified as a distant signal independent, which opened the door for R-Media to eventually add WGN to its lineup. WLMT, though affiliated now with UPN, still qualifies as a distant signal---because UPN is not, under FCC rules, a full network until it airs fifteen hours of programming per week.


Local Origination

Cable access channels are either owned by the cable system itself, or by the local governing body which grants the cable franchise. Government-owned access channels typically air live and videotaped coverage of government meetings and community affairs events. Cable-owned access channels tend to offer more entertainment, as well as community-oriented program offerings.

Each model of cable local origination has the right to lease time to local agencies, or production groups, for airing programming. Some cable operators will lease the entire channel to a local production entity to provide local origination programming, in conjunction with their agreements with their franchising body.

In Jackson, Total Reach Television is leased Channel 6 by R-Media, the local cable operator. In return for the leasing rights, TRTV is required to produce or air original programming for twenty-five per cent of its program hours, or an average of four hours per week. That committment is aided, in part, by Union University's productions of I've Heard That Song! and Jackson Tonight!, which provide one and one- half hours per week of that programming, when both are in season.

In some cities, an access channel is provided to major news operations. In Orange County, California, Orange County Cable News is a 24-hour around-the-clock news service, featuring local coverage for southern California cable subscribers. Two new 24-hour news services went online on access channels in Florida in the fall of 1998. News 12 Long Island in New York is considered the oldest of such services.


Basic Cable

Originally, cable defined basic services as any programming offered on standard VHF channels two through thirteen. That definition changed as the proliferation of non-over-the-air services developed in the late 1970s and early 1980s.

Basic cable is now defined as any non-premium, non-over-the-air cable network. The networks are advertiser-supported, rather than premium-fee subscription-supported. The first such service was ESPN, which was created by Getty Oil in 1979, as the nation's first 24-hour sports network. Following later in 1979 was the UA-Columbia Network, a consortium of United Artists and Columbia Pictures Television, which offered a combination of live sports, Madison Square Garden events, children's programming, and offerings from British television. UA-Columbia evolved into the USA Network in 1980. Cable News Network, a brainchild of Ted Turner, originated in mid-1980. Eventually, the basic networks served the same function as radio---targeting niche interests of viewers. Networks such as Lifetime (women), The Nashville Network (country music), American Movie Classics (pre-1970s films), and Nostalgia Television (senior citizens, now Good Life TV) have tailored programming to specific demographics.


Premium Cable

In 1975, a New England-based company delivered a college basketball game live via cable television for a subscription fee from viewers. Later the same year, the company purchased a series of recent Hollywood films to air on a similar subscription basis. The birth of Home Box Office led to a major sea change in the cable industry.

HBO was the pioneer in scheduling blockbuster films, live championship boxing, concerts, and premium sporting events. HBO led the way in the era of premium cable---program services which offer a mixture of films, sports, and big-ticket programming for a monthly subscription fee, which often ranges between $8 and $13 per month, depending on the competitive structure of a market.

In the early 1980s, HBO was challenged by Showtime. The new service, owned by Viacom, Inc., battled Home Box Office for rights to major motion pictures and concerts. However, cable operators did not have to negotiate for exclusive rights to either service. Cable systems offer both to subscribers for typically equal fees, though occasional price wars have emerged between the two.

Eventually, the major premium services developed sister channels. HBO created Cinemax, which became an almost exclusively film-oriented channel, as did Showtime's The Movie Channel. The Walt Disney Company added its own Disney Channel as a family-oriented premium service in 1984; however, Disney has recently been converting the channel to a basic service in much of the country. In the 1990s, the addition of Encore and Starz! to the mix has increased the competitive structure of premium cable.


Pay-Per-View

Scattered trials of pay television go as far back as the late 1950s in California. Experiments with using over-the-air channels with scrambled signals, for which viewers paid a fee to unscramble through a set-top box, to deliver premium movies met with limited success and frequent failure.

However, the sophistication of cable developed in the 1980s to the point of adding a new phrase to the cable dictionary: pay-per-view. Viewers were enticed to pay a subscription fee per-event, rather than per-month, to receive movies and live sporting events.

As in the origin of television, boxing and wrestling led the way in cementing pay-per-view's success. The advent of pay-per-view cable also led to the virtual end of a thirty-year tradition in the sports world: theater, or closed-circuit television, where customers would pay big-ticket admission fees to see championship fights on a big screen in arenas and auditoriums across the nation. Major heavyweight championship fights have been a mainstay of pay-cable. However, the most consistent successes have been registered by the events of the World Wrestling Federation and World Championship Wrestling. The WWF began its pay-cable enterprise in 1986 with a made-for-pay event called The Wrestling Classic. However, its first megasuccess came in 1987 with its Wrestlemania III, which featured Hulk Hogan defeating Andre the Giant before more than 90,000 in the Pontiac Silverdome. WCW, a subsidiary of Time Warner and Turner Broadcasting System, was a distant runner-up in the wrestling pay sweepstakes until the mid-1990s when it imported former WWF stars Hogan, Randy Savage, Kevin Nash, Scott Hall, and Bret Hart---combined with its traditional standouts Ric Flair and Sting (Steve Borden).

The pay-per-view industry is now said to gross $1 billion per year for cable operations across the U.S. Pay-per-view movies and concerts are also frequently featured, but have registered less financial success than sports pay-cable.


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