CBS Inc. announced today that it will move full tilt into the emerging home video market as well as develop programming for other outlets such as cable television.
Two weeks ago CBS said it would manufacture video discs (which look like records but are played back on television sets) compatible with the upcoming RCA Corp. video machine.
That announcement gave RCA a major competitive boost in its race with Magnavox to corner the U.S. market in video disc machines. Discs that can be played on the RCA machines -- due to be marketed early next year -- cannot be used on a Magnavox machine and vice-versa. Magnavox has been selling its machines on a limited basis for a year.
Walter Yetnikoff, president of CBS Records, said a new division, CBS Video Enterprises, would "manufacture, produce and market programming for the new video technologies," including video discs and video tapes.
Although CBS is the last of the three major broadcast companies to get into the home video game, the move had been widely anticipated. CBS is the nation's biggest manufacturer and distributor of records and can use both its manufacturing facilites and broad distribution network in its home video operation.
A number of electronics companies are banking on home video equipment at the emerging entertainment industry of the 1980s. Several major companies -- including Sony -- have been selling home video equipment that can be hooked up to television sets for several years. Manufacturers have more troubles developing the so-called video discs, although most of the technical problems -- at least at Magnavox and RCA -- seem to have ironed out.
Magnavox reports higher than anticpated sales of the video disc equipment in the three cities in which it is selling the machines. MCA makes the disc that can be played on the Magnavox machines, which use a laser to "read" the programming stored on the disc.
The RCA machine uses a stylus much like the needle on conventional record players.
CBS said that it had named Cy Leslie, former chairman of Pichwick International, Inc., as president of its new video enterprises division. Pickwick is the world's largest reatailer of records and tapes. American Can Co. bought Pickwick in 1977.
The new division will draw not only on existing CBS programming for its tapes and discs. It also will produce original programs such as theatrical or musical shows for the home video market.
In addition, the new division will produce shows for other outlets, such as cable television.
CBS declined to disclose what level of resources it will commit to the new division or when it expects the division to show a profit.