By Adam Hanieh
Until now there hasn't been much you can do with a TV: you either sit and watch it, or you turn it off. This is all about to change. Telecommunications is undergoing the most dramatic changes in its history, and the corporate scramble is on for the mega-profits to be made from pay TV.
There are presently three different methods of delivery: satellite, a microwave-based technique called multi-point distribution system (MDS) and cable TV.
The government has made three satellite licences available, the first to the ABC and the other two (A and B licences) to private companies. The betters' favourite for both licences was a consortium stitched together between Kerry Packer, Rupert Murdoch and Telecom, known as PMT. However, an unknown group called UCOM made a higher bid. The B licence went to a company closely related to UCOM, and UCOM has until mid-November to come up with $92 million for the A licence.
There has been a ban on microwave, mostly due to pressure from Kerry Packer. Steven Cosser, the former chief executive of the Ten network, has shown most interest in developing microwave Pay TV. Next year the government will start selling MDS licences.
Cable looks like being the eventual preferred option of big business. Cable TV in the US demonstrates that the media monopolies stand to make a fortune. In most areas of the US, viewers can select from about 70 channels: from all-nude talk shows to 24-hour home shopping. US cable companies are predicting a 500-channel system in the near future.
Control
Despite this vast array of channels, enormous control is in just a few corporate hands. Whoever controls the cable, controls cable TV.
In early October the US telephone company Bell Atlantic announced plans to acquire Tele-Communications Inc, the largest cable system in the US, for $16 billion. This would be the largest media merger in US history, creating an empire that encompasses telephone services, cable TV and television channels. The new Bell Atlantic corporation would control cable to 40% of US homes.
Along with Tele-Communications Inc, Bell Atlantic would also get TCI's cable programming company, Liberty Media Corporation. Liberty is the largest shareholder in the cable shopping channel operator QVC Network.
QVC in turn is pursuing a bid of US$9.67 billion for Paramount Communications, which owns TV stations, theme parks and the film company Paramount Pictures. Paramount also owns the Simon and Schuster publishing house, the New York Nicks professional basketball team and the professional hockey team New York Rangers.
Another media company interested in Paramount, Viacom, is also carrying on discussions. Viacom controls cable channels such as the MTV network as well as the sitcoms Roseanne and Cosby Show. One of the major investors in Viacom is a telephone company, Nynex Corp.
Prices are increasing for US cable customers. Between 1987 and 1993, cable companies increased their average rates by 60%.
In Australia, it is almost inevitable that control of the cable system will fall into the hands of Packer and Murdoch, given their collaboration with Telecom in the PMT consortium. Telecom has already laid much of the cable necessary for cable TV.
The effect of this control over what we see on TV has again been amply illustrated in the US. The only news channel seen on US cable TV is CNN. Two of the major owners of CNN are Time Warner and Tele-Communications Inc — and why would they want to see an increase in competition?
Another example occurred in 1991 when a company affiliated to John Malone (chief executive of TCI) sought to buy Learning Channel, an educational cable TV service. Another company also had its eyes on Learning Channel, and when this company looked like beating Malone, TCI just dropped Learning Channel from the system, causing its value to plummet and destroying the rival bid. The Malone-affiliated company then picked up Learning Channel at a price $US19 million lower than the original price.
Interactive TV
The next big change, coming very soon, is interactive TV. Viewers will be able to affect what they see on the screen by means of a remote control set and a little black box which sits on top of the television. Viewers will be able to compete directly with quiz show contestants on the screen, select which slow motion replay or camera angle they want to watch on the sports show, or automatically order a washing machine.
Interactive TV units will sell for about $425 each, and market analysts predict that the number of Australian homes that have one of these units will be 7% in 1995 and 71% in 2003. Interactive TV is being tested in five Sydney pubs at the moment, and next March 500 units will be installed in Adelaide. A second trial, covering 10,000 Adelaide homes, will start in November 1994.
The PMT consortium is rumoured to be looking at interactive systems which will be closely linked to pay TV. The video-encoded signals which form the basis of interactive TV will be deciphered by the signal decoders that pay TV subscribers will buy.
US companies, including Viacom International, Time-Warner, Tele-Communications Inc and IBM, are already testing out systems that could be used in Australia.
Humanity's technological ability to communicate has never been at such a high level. Yet the enormous possibilities that this opens are restricted by the lack of popular control over this technology. We are force-fed a TV diet of nude talk shows, violence and misogyny. The increasingly concentrated ownership of all forms of communication will intensify this contradiction between the potential and the reality on our screens.