TELEFIRST

Looking back at the history of television from a marketing perspective, from its earliest days the person or entity that controlled the medium had the tallest soapbox in the world. As radio proved twenty years earlier, advertisers supplied the industry with the money to expand and improve. Without sponsors, television (like radio) would not survive. And the advertisers knew this and quickly assumed their place in the pecking order.

In television's early days, the sponsor had almost complete control over the programming it paid for. Their names were often put before the star of the show and sometimes even became the title- our beloved Uncle Miltie- Milton Berle, didn't star in a show named after him but rather he performed under the banner of his main sponsor The Texas Oil Company- in a variety series called The Texaco Star Theater. Even later, when Berle's sponsorship changed to Buick, it was called The Buick-Berle Show. Money talked and advertisers did a lot of talking. Scripts were changed simply because a reference might remind a viewer of a competitor's product. Sponsors could hire and fire at will with a power and ruthlessness of a maniacal dictatorship.

But as the television industry grew it became more and more expensive for one sponsor to foot the bill for an hour of television time. Taking a cue from the print media, Sylvester "Pat" Weaver of NBC introduced the method of selling minutes of airtime to multiple sponsors. At the same time, programming would become the responsibility of the networks, not the sponsors. It is this system that is still in use today.

And as television grew "spot" sales, as they are referred to in the industry, were rising to astronomical heights. The attitude was no longer "We'll support your network as long as we say what goes..." to "The cost is $XXX for a sixty second spot on our network, gentlemen! Take it or leave it!"

But winning control over the advertisers and programming didn't prepare the networks for the changes that were in store for the upcoming decade. By the late 70s, a small subscription movie service called Home Box Office was already serving more than a million customers over a medium that had been around since the 1950s- Community Antenna Television, but only recently had begun to expand into areas it had never been originally designed to serve.

CATV had been created to supply broadcast signals to mountainous areas where conventional antennae would not suffice. It was merely a conduit to the outside world and supplied no original content of its own. The advent of HBO changed all that and the old guard was faced with a new and potential enemy.

Around the same time, another problem faced the networks- the rising popularity of the home video market. After a few false starts (the Sears Cartrivision system, for example), JVC's Video Home System (VHS) and Sony's Beta formats were becoming popular alternatives to what the networks had to offer. Viewers now had the control to watch what they wanted- whenever they wanted and however many times they chose.

Working with the engineers at Sony, a revolutionary system was designed especially for the Telefirst project. Transmitted alongside a specially scrambled video signal that looked something akin to a reverse field negative flickering like a strobe light and a scrambled audio signal that some called "a machine gun" or "an old movie projector", was a special code. It was this code that allowed the set top converter to unscramble the picture. Telefirst offered the public first run movies at a discounted price with the flexibility of time-shifting. Since the recordings had a limited life, (Telefirst would change its unscrambling codes making the older recordings useless), you could use the same tape over and again.

Agreements were signed with major studios to allow Telefirst to air films right after their initial first run release, bypassing at times, the second run movie houses, HBO, and the home video market. Incentives were announced in hopes of attracting subscribers, keeping them home and away from the video store.

After three months of preparation and with the blessings of Leonard Goldenson, who flew to Chicago to witness the event, Telefirst went on the air over WLS-TV. If the experiment was a success, other ABC owned & operated stations would join in. The prospect of airing original content such as music videos, concerts, and specials, along with the Hollywood films, was a certainty.

But then something happened. Suddenly, as if in response to Telefirst's possible threat to their business, the video stores dropped their prices for rentals. One of Telefirst's biggest selling points over the home video market was the affordability of the movies it aired. The drop in rental prices and the incentives offered by the stores, such as three day rentals for a discount price, sent that point swirling down the drain. Why pay for a movie that had a limited lifespan when you could rent it, dub it onto another tape and keep the recording forever? Sure there was copy guard, but in it's early days, the technology was easily defeated.

Granath also recalls an additional problem that contributed to the failure of the project. Many jokes have been written about the VCR programming challenged. Today's modern home systems have on screen capabilities, one-touch or one-button recording features and Gemstar's VCR Plus programming system to help the user program his unit for any hour, any day, of any year. They've come a long way. But in the early 1980s, the situation was somewhat different.

For years. viewers have been asked to add additional equipment to their televisions to enhance the viewing experience. Whether it be a converter box that was connected both to your TV and your telephone for Phonevision or a converter to receive those new UHF channels. With the advent of home video recorders, that box on top of the TV got bigger and somewhat harder to handle. Now the user was not only faced with two additional tuners (VHF and UHF) on the VCR but also a timer to record programs while away. The timers and tuners were complicated and confusing. Many of the early Sony Betamax recorders were only able to record for a maximum of one hour at a time and could only be set to record a single channel. Most people couldn't get past the blinking "12:00" on their displays. Since Telefirst broadcast their scrambled signal in the middle of the night, it was either stay up late or master the dreaded timer. Most people just went to sleep.

Movie studios were moving cautiously into the new medium. Pre-recorded movies for sale were seldom less than $150 and almost never under $100.00. But just about everything on video was available for rent and the video store became one of the biggest businesses of the decade. Big enough to gain the attention of ABC.

The networks were facing new challenges. Cable (as CATV had come to be called) was making great strides in suburban areas offering subscribers content not available "over the air" as well as "interference-free" reception of your local broadcast channels. But many larger cities (including Chicago), squawking at the cost and logistics of stringing up the entire city, opted to go with a cheaper and inferior system of subscription television over UHF. Both services were gaining enough popularity, however, to warrant attention by the network's top brass.

Even though ABC saw the cable and home video industries as threats, it didn't stop them from getting into the ground floor themselves. The popular and highly respected A&E Network is a joint venture of ABC, NBC, and The Hearst Corporation. But ABC needed something different and the man they chose to find it was Herb Granath.

Granath's answer was Telefirst, the industry's first marriage of the broadcast and home video markets. Subscribers recorded major Hollywood films (many that were available to the home market for the first time anywhere) on their VCRs in a special scrambled form. Recordings were made in the middle of the night while the normal ABC feed was down and WLS-TV was off the air.

For a price of about $4.00 (considerably cheaper than a tape rented at the local video store), the viewer could watch a first run movie that was being unscrambled by the matching signal code being transmitted by Telefirst through yet another of a long line of set top converters. The tapes were unplayable through a VCR without the converter and after a few days when the master code would change, unplayable on them as well.

This was the first attempt at broadcast subscription television since the ill-fated Phonevision experiment in 1951. During that time, the movie studios had to be convinced that television could be an ally rather than an enemy. They didn't have to worry about consumers making pirate copies of their films and selling them to others without proper copyright compensation. So Granath was faced with figuring out how to design a system that would eliminate the pirating issue and attract the major studios and cash in on the ballooning home video market. Granath went to Japan.

After three months, Telefirst was deemed a failure in its original form. However it paved the way for today's Pay Per View industry and Pay On Demand TV, the digital counterpart to PPV. Herb Granath today is chairman of the board of another ABC network, ESPN (The Entertainment & Sports Network) and is a senior vice president of ABC Television in New York.

The author would like to thank Mr. Granath for sharing his memories of the Telefirst system and also a special thanks to Bruce DuMont of The Museum of Broadcast Communications in Chicago; Ms. Loreen Arbus (daughter of Leonard Goldenson) and owner of Arbus Productions in Hollywood; and Ms. Char Beals of CTAM in West Virginia for their assistance in tracking down information on this almost forgotten part of Chicago television history.

In the early 80s, Suburban Chicago television viewers had more programming vendor choices then they've ever had before...or since. Along with the free VHF and UHF channels already available to everyone, suburbanites also had access to cable, Telefirst, and some new over-the-air subscription services that promised to provide city dwellers with all the "perks" found on the continuously elusive cable television channels. UHF PAY TV tells the story of WSNS Channel 44 and its disastrous union with ON-TV. When cable finally arrived in the windy city, the subscription services quickly folded, leaving the stations with virtually no programming. Spanish language television was a rapidly growing market in Chicago, first covered almost exclusively by brokered ethnic station WCIU. Soon WSNS and WGBO (the former WFBN) would flip to Spanish language after unsuccessful attempts to compete with powerhouse independents WGN-TV and WFLD. Read UHF WARS, an accounting of a very important part in Chicago television history. Videophiles weaned on cable television (and familiar with only the cable channel to a favorite station rather than the actual over the air channel) will not be able to appreciate the historical significance of a station operating on channel 4- but one did for thirteen years. The story of the first WBKB CHANNEL 4, the first commercial station in Chicago. Follow Chicago's conversion to the new digital system by clicking on the CHICAGO DIGITAL TELEVISION