Interconnecting Cable Television Systems by Satellite

An Introduction to the Issues

by Nathaniel E. Feldman

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Hard facts and harder questions about cable television and satellite interconnection, expanded from a symposium leader's remarks at the October 1972 SMPTE Technical Conference. Under the severe FCC restrictions on importing distant television broadcast signals, how can urban cable systems attract subscribers? Neither advertiser-supported nor noncommercial locally originated programming seems able to attract subscribers or to make leasing excess cable channels attractive. Two-way television services seem promising in the long run, though many fear invasion of subscribers' privacy; interactive television, however, seems not to need satellite linkage. Total revenue from satellite interconnection and programming may someday average perhaps $10 per subscriber per month above the present $5 cable television subscription fee and attract 10 million subscribers. An additional charge of only $5 per subscriber per month and one million subscribers, however, will generate a mere $36,000,000 yearly for programming all channels. Each major network now spends about $500,000,000 per year programming a single channel. Competition from home videotapes and videodisks must also be considered. The potential of pay television is still unknown, although experiments that may answer some of the questions raised here are beginning.

This report is part of the RAND Corporation Paper series. The paper was a product of the RAND Corporation from 1948 to 2003 that captured speeches, memorials, and derivative research, usually prepared on authors' own time and meant to be the scholarly or scientific contribution of individual authors to their professional fields. Papers were less formal than reports and did not require rigorous peer review.

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