Speaking not long after the announcement of its decision to close down TV-Cable Week magazine and take a $50 million loss, Time Inc. President Richard Munro indicated yesterday that the multimedia giant would soon discontinue the teletext venture it once hoped would be a mainstay of its cable television programming.
Teletext is a new technology that allows written texts to be transmitted to home television sets equipped with a special decoder.
For the past two years, Time officials have expressed the belief that such new information services would be a profitable complement to the entertainment services, such as movies, the company now provides to cable systems.
However, in remarks made at a Duke University luncheon, Munro said, "You'll see us winding teletext down. We got into it too soon." However, Munro stressed that "I'm not announcing the closing of teletext today."
Calling the service a "research and development item," he said a teletext test begun early this year revealed that the typical subscriber used the service for only 15 minutes a day.
Moreover, the home computer used to receive the service costs more than $1,000 and, until the cost of the receiving system drops to $150, such a service is not economically viable, he said.
CBS, Westinghouse and other broadcasters are now offering a limited over-the-air teletext. Some in the field predict teletext could become an important advertising medium and garner revenues as a pay-television subscription service as well. Other industry observers believe teletext may be surpassed by home computer networks using cable television or phone lines to transmit information, computer programs and games.
A Time Inc. spokesman in New York emphasized that the teletext project was still in testing, saying, "We believe the field holds long-term promise."
Munro also said that Time's Home Box Office, the most popular of the pay television services for cable, may soon consider financing movies with a more adult flair. HBO surveys show that R-rated movies are extremely popular with cable television subscribers, he said, and the company would have to recognize that.
While Munro personally termed the research "very depressing," he said one survey showed HBO viewers preferred the R-rated "Death Wish II" over the Academy-Award-winning "Chariots of Fire" by a 4-to-1 margin. "Our movies are taking the high road," said Munro, "maybe too high."
Talking about the failed cable television magazine, Munro said, "This TV-Cable Week was really a humbling experience. It really hurt." He attributed at least some of the failure to "the Time Inc. arrogance."
Munro said the company failed to detect potential problems in the magazine, but said Time Inc. was not going to retreat from new magazine development.