A Pay-Per-View Test

LEON Demar, an avid opera lover who lives on Manhattan's Upper East Side, saw a commercial for the opening of the Metropolitan Opera's 25th season at Lincoln Center on his cable channel, inviting him to order the event on pay-per-view (PPV) television.Mr. Demar called the number and found out that the premiere - actually a star-studded concert rather than a full opera - would cost him $34.95. He decided to skip the telecast. "I'd rather spend more and actually go to the Met," he explained. "I don't think it's worth paying that kind of money for a TV show." Whether Mr. Demar's view prevails, or whether he is an exception and tens of thousands of families will decide that the gala is indeed worth the money, will indicate the potential of pay-per-view which, its proponents claim, could well become a cornerstone of a new, cable-dominated television structure. It will get its first serious test on Sept. 23 when pay-per-view will carry the Met opening. The concert, to be seen only on PPV channels throughout the country, uninterrupted by commercials, marks the first major cultural offering on pay television in the United States. It is being presented by an unusual trio of companies - the combination of NBC and the Cablevision Systems Corporation, Polygram Holding Inc. (a prominent Dutch record company) and exclusively sponsored by Panasonic. "Cable today reaches some 54 million households of which about 16 million are equipped to receive PPV," says Susan Greene, vice president in charge of business development at NBC Cable. "We are aiming for around 40,000 people to 'buy' this extraordinary program. Of course, there could be many more since we are advertising and promoting the event very heavily." Pay-per-view functions simply. A viewer whose TV is equipped with an "addressable" cable box, simply calls a number and orders a program. It appears on his set at the desired time, and the charge is added to his bill. While the Met opening is a promising starter for pay-per-view, NBC and Cablevision expect much bigger things from the Olympics next summer. Clients will be able to watch all or parts of the competition without commercial interruption, while NBC TV will simultaneously carry 150 hours from the games on regular network television. Tom Rogers, president of NBC Cable and of business development, sees pay-per-view as part of a network strategy for the future, when there may be 100 or more cable channels. "We are increasingly viewing ourselves as a networks company rather than a single network company," he says. "The strength of our network long-term is to be able to reach viewers across a multiplicity of channels since the single network audience has fallen off." NBC also owns the CNBC business channel, Bravo, Sports Channel America, and has a major interest in the Arts & Entertainment Network. Mr. Rogers added that it was the potential income from pay-per-view summer Olympics that enabled NBC to win the rights to the games. "We project 2 million subscribers," he said, adding that PPV might reach the point where movies are premiered on the basis of income from homes. PAY-PER-VIEW, which has been a remarkable success for specials like boxing and wrestling at a charge of close to $30 (though they are also available on free television), is almost as old as network television itself. It was proposed back in the 1950s when Arthur Levy, an Englishman, vainly tried to introduce his Skiatron system, which was remarkably similar to the current one. Later, Paramount Pictures ran a PPV test in Pennsylvania, using new movies. At this moment, pay-per-view is spreading rapidly in Japan where Jeffrey Reiss Entertainment just negotiated for the WOWOW PPV channel to show a batch of new pictures from Columbia Studios (now owned by Japan's Sony Corporation). WOWOW claims close to half a million paying customers. Mr. Reiss, an active entrepreneur in PPV, sees pay television as ready to achieve a major status with the 1992 Olympics. "Once this new industry can afford to put money into promoting itself, it will become very important," he says. In Canada, too, pay-per-view is spreading via the Viewer's Choice company, which shows recent movies. While Rogers acknowledges that NBC's PPV service represents competition within NBC, he sees it as imperative that viewers be offered new choices. "If you are a single channel on that dial, you are far less able to compete in today's media environment," he said. "And, in any case, you can't have all your eggs in the network basket."