or premium cable is a cable television service that supplements
the basic cable service. Most cable system operators carry one or
more pay cable services (called "multipay") on their systems and
make them available to customers for a monthly fee that is added
to the basic fee. Cable customers who choose not to subscribe to
pay cable receive a scrambled signal on the pay cable channel or
channels. The monthly pay cable fee is subject to unit discounts
whenever a customer subscribes to two or more pay cable services.
Pay-per-view (PPV) is a second form of pay cable that requires cable
television customers to pay for individual programs rather than
a program package. The cable customer's monthly cable bill reflects
the total cost of each PPV program or event viewed during the preceding
Since pay cable services are supported by subscriber fees, they
carry no commercials. Pay cable programmers usually schedule programs
that are unique and that may never be seen on basic cable or broadcast
television. These include sports events, musical concerts, and first-run
uncut movies. Some movies carried on pay cable are especially produced
by the pay cable service; others were released originally for theatrical
viewing prior to their availability for a pay cable audience.
cable subscribers pay an average of $15 per month (in 1995 figures)
above their basic cable service cost. Any cost figure above or below
the average depends upon the total number of pay cable services
in the subscriber's package and the package discount allowed by
the subscriber's cable system operator. The operator him/herself
keeps approximately 50% of the fees collected from pay cable subscribers.
The other 50% goes to the company or companies originating the pay
The origin of pay cable predates the cable industry by several years.
The first known pay television or subscription television (STV)
service in the United States was a short-lived experimental effort
by Zenith Radio Corporation in 1951 called Phonevision. During its
90-day life span, Phonevision offered daily movies carried by a
special telephone line to some 300 Chicago households. Two other
experimental STV services, one in New York City and one in Los Angeles,
followed the Phonevision lead in 1951 but met with similar fate.
Federal Communications Commission (FCC) enacted rules in 1957 that
severely limited STV program acquisition. The rules prevented STV
from "siphoning" movies and special events such as sports from "free"
television to pay television. Revised FCC rules in 1968 limited
any STV service to a single channel only in communities already
served by at least five commercial television stations. Such restrictions
for STV and, by then, pay cable were eliminated by a 1977 U.S. Court
of Appeals decision that declared that the FCC's pay television
rules infringed upon the cable television industry's First Amendment
Court of Appeals decision was especially important to the Home Box
Office (HBO) pay cable service. The idea behind HBO was conceived
by Charles F. Dolan. Financial assistance from Time-Life Cable to
launch HBO was followed by agreements with Madison Square Garden
and Universal Pictures allowing HBO to carry live sports events
and recent movies. HBO was launched on 8 November 1972, providing
pay cable programming (a professional hockey game and a movie) to
365 Service Electric Cable subscribers in Wilkes-Barre, Pennsylvania.
In less than one year HBO's service was carried by 14 cable television
systems to more than 8,000 cable customers.
ground was broken in pay cable distribution in 1975 when HBO first
carried its service via satellite to UA Columbia Cablevision subscribers
in Fort Pierce and Vero Beach, Florida and to American Television
and Communications Corporation subscribers in Jackson, Mississippi.
The first satellite distributed (via RCA's Satcom) pay cable programming
was the Ali-Frazier championship boxing match from Manila. A nationally
distributed pay cable network was in the making but would not be
a reality until HBO managed to convince prospective cable system
affiliates to spend nearly $100,000 to purchase the necessary satellite
receiving dish and accompanying hardware.
1995, fourteen national and six regional companies had launched
pay cable services in the United States. HBO remained the largest
with 18 million subscribers receiving the service from over 9,000
cable systems. Other leading national pay cable services in 1995,
based on subscribership numbers that exceeded a million, were The
Disney Channel, Showtime, Cinemax, Encore, and The Movie Channel.
Leading regional pay cable services whose 1995 subscribership numbered
more than a million included Sports Channel Pacific, Sports Channel
New York, and Sports Channel New England.
cable services, since their inception, have struggled to satisfy
subscribers who too often have chosen to disconnect from pay cable
after a brief sampling period. Such "churn" has resulted from subscribers
who have indicated in surveys that low quality movies that are repeated
too often rank pay cable as a low entertainment value.
pay cable industry is at a disadvantage in combating this criticism
because of the preference (based on financial considerations) that
the movie industry has for pay cable's chief rival--home video.
Production companies whose movies score particularly well at the
box office generally follow the movies' theatrical run by release
to the home video market. The movies are then available for rental
or purchase on videocassettes long before they appear on pay cable.
Pay cable services that are best able to compete with home video
in coming years may be those that have the financial resources to
produce their own movies.
Baldwin, T., and D. McVoy. Cable Communication. Englewood
Cliffs, New Jersey: Prentice-Hall, 1988.
Joseph R., Barry L. Sherman, and Gary A. Copeland. Broadcasting/Cable
and Beyond, 2d ed. New York: McGraw-Hill, 1990; 2nd edition,
Susan Tyler. Broadcast/Cable Programming: Strategies and Practices.
Belmont, California: Wadsworth Publishing Co., 1981; 4th edition,
Garay, Ronald. Cable Television: A Reference Guide to Information.
Westport, Connecticut: Greenwood Press, 1988.
August E., and Kenton T. Wilkinson. Communication Technology
Update: 1994-1995. Boston, Massachusetts: Focal, 1994.
Robert G., editor. The Cable Networks Handbook. Riverside,
California: Carpelan Publishing Co., 1993.
See also Cable
Cable; Pay Television;
States: Cable Television