Fort Worth Star-Telegram from Fort Worth, Texas • 145

3H SUNDAY FEBRUARY 1 1981 0)19E31 FORT WORTH STAR-TELEGRAM Sunday business report IOMMI Prices are likely to drop as cable time nears 2 gas sales OK'd by RRC FOR SALE OR LEASE' 100200 Square feet Light Manufacturing and 3614 McCART Fort Worth Texas Contact: Louis Bogart 926-5244 1 UR 1: 4 iii i -I CAI fE BEN II Ill i'l ORLEANS: Ausrusi Two Midland-based producers have been given Railroad Commission authorization to sell gas from leases on West Texas public lands for ultimate use outside the state The sales supported by the General Land Office and the University of Texas System involve an estimated 12 billion cubic feet of gas reserves in Crockett and Winkler Counties Neither area murticipalities nor other inttrastate markets indicated any desire to purchase the gas Texas statute requires that the Railroad Commission review and approve' applications to sell gas from public lands for use in other states Such gas sales are authorized by granting exceptions to the RIIC''s Statewide Rule 69 And cable operators may not turn deaf ears Another bidder for the Fort Worth cable franchise is Atlanta's Metrovision Inc and its president Henry Harris says "It depends on what programming they develop If they develop that package (a good package) and deliver it cheaper than I could I'd be interested But if all they deliver is movies there are a jillion movie packages out there" And then there is the fallback position backing out of fee television into free television The STV operations currently split hours with conventional advertising-supported television operators because of Federal Communications Commission requirements that an STV license be granted only to a licensee that already operates a commercial station That station still must broadcast a minimum of 28 hours of free advertising-supported programming each week If desired it would be as one operator puts it "an easy step" to turn into a full-time commercial television station A different beast The impact of cable could thus be brutal but hardly fatal Not all four present pay television rivals are expected to survive Preview's Dieckmann calls the rivalry something of a "crapshoot" and says "I'm not totally sure three (STV) companies can exist five years from now" in this market One STV operator is even planning for a 40 to 50 percent drop in subscriptions in communities that become wired for cable But these pay systems neither expect nor need to reach into 40 to 45 percent of the households covered by their service to survive or be successful like cable projects The pay television systems are looking for coexistence and niches not dominance and mass acceptance As such the services are significantly different economic beings and will play a subsidiary role in the evolving information and entertainment media marketplace Even now with their strategy of beating cable systems into markets subscription and MDS services do not comprise nearly as large a business as cable does By December 1980 STV had garnered 868000 subscribers nationwide or slightly more than 1 percent of America's 776 million households according to Knowledge Industry Publications MDS had achieved 559000 subscribers or 7 percent In dollars sr represented a $208 million business about the size in terms of annual revenues of a single corporation like Fort Worth-based Color Tile the floor and wall covering retailer And MDS was a $1185 million business about half that of SW Cable television by contrast had extended into 26 percent of American homes by December representing 199 million subscribers and $22 billion in revenues from basic and pay services That doesn't approach the commercial networks' combined revenues of $11 billion in 1980 but in comparison to other pay services cable is a behemoth already and is likely to widen its spread over the next 10 years But even if subscription television or MDS is only able to achieve penetration into 5 percent of American homes it is likely to be a viable long-term business The most notable difference between the services is the lack of cable and the difference that makes Laying cable requires heavy capital expenditures from $15000 to $80000 for every Please see $20 on Page 411 UNLIMITED FREE MILEAGE AIRPORT LOCATION LOWEST COMPETITIVE RATES SPEEDY EFFICIENT SERVICE And those are just four of the benefits of renting from Budget when your're in New Orleans Discover more like our immaculate cars our friendly service Come look us up! We'll see you at the airport or at our other Budget locations downtown and Gretna For reservations see your travel consultant or call TOLL FREE: (800) 228-9650 T--711---1 Us your Soars credit card at Sears authorizod arsitidarl distribution corder Call toll tree 100-22a-2800 Budtlet Continued from Page 111 and that uninterrupted movies unavailable on commercial television were one of pay's biggest selling points Preview's Dieckmann thinks SW could cause cable operators who expect to reach roughly 45 to 55 percent of Fort Worth homes severe trouble He thinks STV could knock 10 percent from cable's expected penetration levels The head of one of the bidders for Fort Worth's cable franchise Tim Thomas of Citizens Cable admits that a drop of even two or three percent off projected penetrations could spell "big trouble" for system operators STV argues that to receive a movie channel like HBO cable subscribers must also buy the basic service There is no choice So to receive an HBO-type service will cost that movie buff $16 to the $20 a month being charged for the STV movie channels "With 10 channels to watch from already who needs cable?" challenges Terry Mahn counsel for the Subscription Television Associa- tion Moreover you can expect price-cutting to occur as the dawning of cable television nears "We're not going to roll over and play dead when cable comes to town" vows Dan Petty Golden West Subscription Television's (purveyors of VEU) marketing manager As Petty is won't to point out roughly $10 or half of a monthly $20 subscription fee goes to paying off the converter unit a $140 device After little more than a year of subscription then the converter is paid off and operators have an additional $10 a month in cash flowing in As long as cable appears in the distance an operator is likely to keep the monthly fee intact But come the competition of cable and the operator such as VEU could quickly drop the price to $10 a month while maintaining current margins Which causes some consternation among cable syst(trn operators because their hands are tied by franchising agreements from making rapid competitive reactions "They're totally unregulated" fumes Bill Strange a cable executive with Dallas-based Sammons Communications "They don't have to worry about city councils they can show whatever programming they want they can price whatever they want" But cable operators profess not to worry about the advance inroads of STV For one thing no major market wired for cable has significant subscription television competition And the sizeable subscription television markets like Los Angeles where ON-TV plays to 350000 households have yet to feel the bite of cable wiring "The scorecard's still out" says Strange of Sam- mons which has sought the cable franchise in both its home town and Fort Worth "I have no idea of what the impact of STV will be (on cable penetration) I have no concern about S'rV because of all that cable television has to offer" In fact come the advent of cable cooperation may emerge in place of competition Cable systems offering up to 108 channels will need program- ming to fill those channels The subscription or MDS packages could switch as well as fight and try to sell their programming services to cable works as either an advertising-supported part of the basic service or as another pay tier "They'll sell all their converters hope the cable television operator will put them on one of their channels and try to sell advertising" predicts Citizens Cable's Thomas SHOWS AT 1011AM 12 1 2 3 4 5 6 78 PM rent a car 111A Budget System Itce nsee 1FrirtiriPTInrIt 0 4 5 yi plior 0 Cmt 0 Irall 3 5 13 0 el SHOWS AT 4 et al Rd UgH 0 0 jio129 Am r0 I 19 29 pp- 3 4 5 9 9 9 2: 4 $:: 6 7 8 PM iTgiv 4 111 SD 8 '0 4 'I fiTE ftTU OF THE 4 rrm Hyatt Regency Fort Worth Grand Ballroom 815 Commerce St Fort Worth Texas Tuesday February 3 1981 1981 Pi Mil 1 DECAD BUSINESS LOANS I Dial Finance offers loans to established businesses for expansion equipment inventory or to convert current short-term notes to longer-term financing Equity financing and repayment plans to fit your needs are available For more information about a Dial business loan call: (817) 3354050 Ask for Mr Farenkopf Dial Finance Company of Texas You owe it to yourself to attend this big event and see the newest in TRS-80 Microcomputer innovations! itOn New TRS-80 Model III New Pocket Computer New Popular-Priced Color Computer New Videotex Home Electronic Telecommunications and the Powerful Model II Business Computer IParticipate in "Hands-On" Demonstrations of the Latest TRS-80 Software for Financial Business Educational and Personal Use Over 200000 satisfied owners can't be wrong! 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