In The Washington Post survey of television by Tom Shales [Style, Feb. 20], the view was put forward that the battle now raging between broadcast television and cable television hinges on opposition to new technology by television broadcasters.
What is obscured and overlooked is the role of the copyright owner, the producers and distributors of feature films and series of verying kind.
Shales and others he cites declare themselves to be for "diversity" and the right of the American home to see as many different programs as new delivery sustems can provide. Fine. I agree.
But there is one small omission in that embrance of diversity. It is this: Under the Copyright Act of 1976, cable systems are now being "subsidized" through a "Compulsory license" -- in this case not by the federal treasury (for which taxpayers may rightfully rejoice) but by the owners and producers of creative material, a situation that all of us in the entertainment business find remarkable in its largesse and absurd in its concept.
That bountiful congressional act gives cable systems the right to capture any television-station signal off the air, bring its programs into their cable system and transport it to homes in their community without the copyright owner's permission and without paying a fair market-place value for those programs on which they make handsome profits.
The fact is that some 75 percent of the 3,500-plus cable systems (with some 14 million customer homes) in the United State pay more for postage stamps to mall out their monthly bills to customers than for all the network and individual TV station programming they use! It is charity on a grand scale.
For example, in 1978, cable systems in America paid some $12 million (or less than $1 per year per subscirber) for all their programming, for which they received some $1.2 billion in revenues. In other words, some 1 percent of their income is all cable systems pay for the programming without which they could not remain in business.
To put it anonther way, networks spend $12 million for about 2.3 days of their programming. Individual TV stations spend $12 million in 4.4 days. Cable systems operating 24 hours a day, 365 days a year, are given compulsory licenses for a full year's supply of programs for the same $12 million.
It is this kind of exotic economics that fortifies the belief that programming for cable systems comes from the tooth fairy, granted by some divine abstraction to cable-system owners.
Consider that cable systems originate virtualy nothing. They purchase no programs in the open market. They live off the programs created by someone else, financed by someone else and sold to someone else. Here is how it works:
Norman Lear, letus say, licenses his "All in the Family" to Atlanta station WTCG-TV, WTCG-TV pays a few thousand dollars per episode of "All in the Family" for use in the Atlanta market. Okay so far. But them "All in the Family" is lifted off the Atlanta transmitter, hoisted in the sky to a satellite and flung to some 3 million to 4 million cable-subscriber homes throughout the land. When Morman Lear attempts to sell "All in the Family" to TV stations in other states, they respond by saying that the programs is of little value to them since it is alreday available to thousands of cable homesin that particular community. Lear and othe rproducers of other programs also carried on WTCG-TV are left with a shrunken market, the value of their programs a shambles.
Is there any other business that is compleled by law to give away its proudct for a pittance to a special group anointed by congressional fiat? Is there any other profit-making enterprise that pays practically nothing for what it sells to the public for a large profit? Is it equitable? Is it right?
Copyright owners want nothing more than a fair price for creative material in which great sums of money have been invested and for which every other purchaser -- pay-cable, network television, individual television stations, buyers of prerecorded video cassettes and prerecorded video discs -- dnegotiates a fair and resonable price. Only cable TV lives outside this competitive and traditional marketplace bargaining.
Moreover, cable systems received this grand dispensation by vowing to the Congress that they would provide new and diverse programming, special-minority entertainment not otherwise available. They have done nothing they pledged, because it is more profitableo take than to create.
A good many congressmen and senators are now having second thoughts about what they have wrought. The chief spokesman for the administration in the field of communications, Assistant Secretary of Commerce Henry Geller, has affirmed the unfair out-of-balance cable marketplace. Rep. Lionel Van Deerlin (D-Ccalif.), chairman of the House Commerce subcommittee on communications has written to Rep. Robert Kastenmeier (D-Wis.) of the House Judiciary subcommittee on copyright to say that, if competition is to be fair, cable systems must pay appropriate copyright royalties.
Producers and distributors of visual material are excited about new technology, new delivery systems that will give the American public a wider choice of entertainment never before imagined. The quarrel is not with the new technology; it is with the skewed marketplace designed by Congress for one small segment of the communications industry.