Too Few Takers

A pay cable service folds

A second tombstone was added to the cable graveyard last week. Right next to the headstone of CBS Cable (October 1981-November 1982), it marks the passing of The Entertainment Channel, a 24-hour pay cable service offering exclusive programming, much of it cultural. After nine months in business, analysts estimate, TEC lost close to $50 million for its joint owners, RCA Corp. and Rockefeller Center Inc. (RCI). Amid sundry explanations of its demise, the principal reason was clear: TEC could not entice enough subscribers to pay $8 to $12 a month to watch it. The service is transmitted via the Satcom IV satellite, which, because it is received by far fewer cable operators than Satcom III-R, reaches only 2 million of the 30 million cable homes in the U.S. Of these, only 45,000 subscribed to TEC, and the cancellation rate was running between 30% and 40%.

TEC's guiding spirit was Arthur Taylor, 47, a former president of CBS Inc. His vision, backed by a $100 million three-year commitment from RCA and RCI, was of a service providing "quality but popular" programming for viewers not addicted to the networks. TEC had a ten-year contract with the BBC for first rights in the U.S., and nearly 40% of its fare was composed of such British shows as the political spoof Yes, Minister and the detective series Shoestring. Besides showing distinctive foreign films (Federico Fellini's City of Women, Eric Rohmer's The Aviator's Wife), TEC had exclusive rights to such Broadway shows as Pippin and Sweeney Todd.

According to Taylor's postmortem, TEC was caught in the crossfire between HBO, owned by Time Inc., with its 11 million subscribers, and Viacom International Inc.'s Showtime, with 4 million. Taylor predicted a rebirth for TEC in another form, however. He is planning to launch a scaled-down, advertiser-supported channel under the same name late this spring. It will seek a broader audience with fare including Hollywood classics and short-lived TV series from seasons past. RCA and RCI have not decided whether to back the new venture. It would be a gamble. Of the 29 advertiser-supported channels now operating on cable, only one, Cable News Network, is approaching the break-even point. This file is automatically generated by a robot program, so viewer discretion is required.