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9: Cablemania (1980–1984)
- Temple University Press
- Chapter
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9 Cablemania (1980–1984) We don’t really have the foggiest idea of how those big city bells and whistles systems are going to be paid for. —Steve Effros, CATA President, 19811 I t was, as Yogi Berra famously put it, déjà vu all over again. Cable franchising activity, which had abated in the early 1970s, mushroomed in the last half of the decade and into the early 1980s. The tumbling of federal controls, the emergence of national cable programming, and the renewed flow of investment dollars meant that cable could try its luck once more in the major markets. Touting forty-, fifty-, and even eightychannel or more systems carrying HBO, Showtime, ESPN, C-SPAN, and Nickelodeon, cable came back, pounding on the doors of city hall. Only the top MSOs had the resources to take a run at the urban market, but their representatives were there, handing out business cards, and more. The stakes were high. The major markets, as noted, were where most of the nation’s viewers lived. Franchises were long term, ten to fifteen years, and often exclusive. Companies that failed to secure a beachhead in cities such as Dallas, Pittsburgh, Boston, Chicago, and Denver, faced the prospect of being locked out of 70 percent or more of the national subscriber base for years to come. It was a once-in-a-generation opportunity . The competition, therefore, ranged from lively to cutthroat. NCTA President Thomas Wheeler called it a “land rush,” Broadcasting magazine , a “Gold Rush.”2 In the final days of the 1970s, Forbes magazine declared “Cablemania is here again,”3 and, a few years later, author James Roman took “Cablemania” as the title for a new book on the industry.4 As the parameters of the assault on the cities became more 404 / Chapter 9 widely publicized, however, a new label was offered, and stuck. Soon everyone was calling it the “franchise wars.” If any lessons had been learned from the franchising scandals of a decade before, they apparently were forgotten in the renewed frenzy. Pressed by the competition and driven by the fear they would be permanently excluded from most of the nation’s television homes, many operators promised far more than they could deliver. As Broadcasting magazine later observed: “The attitude of the most aggressive operators was to promise anything to win the franchise and worry about fulfilling the promises later.”5 Cable’s exuberant pursuit of urban America became a massively expensive treasure hunt, damaging the industry’s financial health and its public image. Cable faced other challenges in the early 1980s, as well. Equity dollars were costly, and interest rates spiraled so high that operators looked back nostalgically on the 1974 cable depression. This chapter first looks at the franchise wars and the assorted business problems of the early 1980s, as the industry struggled to gain a beachhead in the major markets. It subsequently considers the rise of a new set of potential TV competitors in this period, ironically labeled the “new communications technologies,” and the on-going deregulatory movement in Washington, D.C., that fostered them. The second half of the chapter reviews the continuing development of new cable programming services—including the Cable News Network, Black Entertainment Television, MTV: Music Television, and The Weather Channel— and the often-awkward process of creating partnerships between the young programmers and the older distribution side of the business. Finally, the chapter considers the birth of the Cable Communications Policy Act of 1984, an act of Congress that would bring both great benefits and great troubles to the industry. The Franchise Wars: Wreckage and Response More than 4,000 cable systems were in operation in the United States by 1980, but public attention focused on fewer than fifty situated in top markets where two thirds of the nation’s potential subscriber pool resided. The stalled efforts of a decade before had left most of the big cities still unwired. In 1979, 18.3 percent of the country subscribed to cable, but in the twenty-five largest markets cable passed only 22 percent of the television homes and only about 8 percent took the service.6 Market size was, as discussed earlier, only part of the attraction. Operators also prized the housing density in the big cities, where more potential customers per mile of coaxial meant increased system efficiency and overall profitability.7 While the competition was often intense, it was chiefly limited to the top MSOs...