America's top cable tycoon looks at the complex years just ahead
America's No. 1 cable tycoon is a man who in less than a decade has turned a If the country's burgeoning cable TV industry has its own William Paley, he is undoubtedly Charles (Chuck) Francis Dolan, managing partner of Cablevision Systems Development Company of Woodbury, N. Y.
Like CBS pioneer Paley, Chuck Dolan possesses longrange vision, short-term foresight, entrepreneurial acumen, programming ingenuity -- and enough self-assurance to act with calculated abandon on his beliefs.
And, oh yes, like CBS's Paley, Cablevision's Dolan has moved with startling rapidity into the multimillionaire class.
It is estimated that in the eight years he has presided over the $250 million Cablevision operation, he has come to be worth -- on paper at least -- more than the 80's Chuck Dolan may be worth a half billion dollars.
However, the millions don't show. I met Mr. Dolan for lunch at the exclusive Metropolitan Club, just off fifth Avenue. Despite his current affluence, he is a shy, self-effacing man, with a sly sense of humor and an unobtrusive intensity which, in conversation, encourages the interviewer to join him in delving into his areas of expertise.
Mr. Dolan has managed to hang on to his limited partnership, mom-and-pop cable business in an era when large conglomerates are busy acquiring systems from entrepreneurs, as in the case of Westinghouse's acquisition of Teleprompter and American Express's involvement with Warner-Amex.
Mr. Dolan's partner's include Marshall Field and Newton Minnow, among many others. But he insists he will not sell out to the titans.
Instead, Mr. Dolan keeps expanding his own privatelyheld company -- Cablevision is the largest cable system in the New York metropolitan area, serving close to 200,000 households.He also holds 18 franchises in the chicago area. In addition, Mr. Dolan's company is applying for franchises in Queens, the Bronx, and Brooklyn, having formed a joint corporation with a black organization in Brooklyn in order to improve its chances for that franchise as the only applicant with solid ethnic representation.
Mr. Dolan, who was the original creator of Home Box Office, now the most successful movie channel in operation, created Sportschannel, the nation's first optional pay cable system, with exclusive rights to nonbroadcast games of the New York Yankees, New Jersey Nets, New York Mets, New york Islanders and sporting events from Notre Dame and Columbia Universities. Cablevision also developed Bravo, cable TV's first performing arts channel.
What next for Chuck Dolan, who started in the business about 30 years ago at the age of 25 with a sports newsreel service?
"We are now proceeding through the franchise period for the urban areas. That will be wound up in 1983 and then we will reach the point of seeing whether everything that has been promised can actually be delivered -- double-feeder home terminals, two-way interactive systems, etc. If all that comes to pass then we have an almost unlimited channel capacity. Then, we are headed for a large mix of channels supported by direct viewer subscription -- the pay channels, either on a monthly subscription basis or on a pay-per-view basis. And there will be the advertiser-supported channels, delivered primarily by satellite, as well as the audience-initiated channels, the public access channelss. They will have different kinds of support. And, there will be the local-origination channels, initiated by the cable system itself out of its concept of what it ought to do to provide local service to its subscribers. All of that will produce an enormous proliferation -- mostly within the pay area and in the areas where the subscriber is given the opportunity to choose what he wants to have on his screen. Services that really find and serve their audiences ought to be perpetuated."
Mr. Dolan indicates that he believes the advertising supported services are also important but may run into economic problems much sooner than the other services. "We now have a wonderful Cable News Network and a sports network addressing two primary interests, neither one reporting financial success yet.
"Soon we will have a women's channel, several more performing arts channels, a music channel, a children's channel, a 24-hour weather channel, all supposedly supported by advertisers. The audiences will be so fragmented, it may be a dubious venture for advertisers."
At what point will two-way interactive TV become economically feasible?
"It may become economically feasible long before we can make any money from it. The interest in it is enormous so the systems may have to provide interactive capability for purposes that are not in themselves economic long before we have found a way to create a revenue stream. So far, nobody in the industry -- and this includes QUBE, which has publicized its efforts highly in Columbus, Ohio -- has made a dollar offering interactive services."
Might we soon see cable subscribers receiving $150 bills for all the pay services to which they subscribe?
"Not unless those pay services are providing the consumer with something commensurate with a $150 expenditure. In urban areas today, 55 percent of homes do not buy any cable services when they have the opportunity to buy.
"There is an attitude that TV is not very valuable. The most frequent reason given for not subscribing to cable television is that 'in our home, we do not spend any time watching TV.' The attitude seems to be that TV demeans you and the more time you give to it, the less individualistic the person. If you suggest to them that they now make a payment for TV, that is a total contradiction of their views.
"We try to say 'The reason you don't watch TV is that you don't like advertiser-supported lowest-common-denominator programming. But with cable we are becoming more like the public library and we will be providing you with a considerable choice. Sometimes it works."
Is there still a place for the small entrepreneur in the cable business?
"Sure. There are lots of entrepreneurs in the business. We have over 4,000 cable systems and around 2,400 different companies. The cable industry still remains substantially a group of small businesses."
Will people be able to offer very narrow services, buy time on local cable to offer their services?
"It's already happening. Every cable system ought to have the attitude, especially if it is the only system in the area, that it is willing to share that facility with any comer."
Should cities be in the business themselves, using the profits for the benefit of the citizens? Mr. Dolan has ambivalent thoughts about that, although on the surface he is very definite.
"I don't see any reason for that. Yes, the city should be in the business if private capital won't provide the risk investment necessary. But we certainly have not reached the utility status with cable. It is still possible through a contract to require the cable company, if there is only one, to assume enough of a common carrier position so that nobody is denied opportunity or access.
"Fundamentally, we are editorially based, which makes it a big first Amendment question. You should never have an information monopoly in a community."
Mr. Dolan is known to favor dual or multiple franchising. But is he for competitive franchising in the places where he now has the exclusive franchise?
He smiles. "Absolutely not. But we would accept it. Nobody wants competition with themselves. But you can have that view and still stand foursquare for competition and reallize that somebody is going to come in and complete with you."
How about advertising. Why does the average commercial-TV viewer accept so much advertising?
"Because it's free and they are conditioned to accept ads."
So, why should they accept ads on cable for which they pay?
"We wouldn't dream of putting a commercial in the middle of a film, not because we are purists but because it would be economically self-defeating. We would be jeopardizing our relationship with our audience which has been accustomed to no advertising for a few extra dolars.
"But there is no reason why we would not run advertising on Bravo, our cultural channel. If we could convince Steinway to try to reach our performing-arts audiences, I doubt the audience would object as long as the ad isn't in the middle of a ballet."
So, Chuck Dolan will be in the cable business for a long time?
He smiles again. "I like the business. I'm doing well in it. If I sold out I wouldn't do much better anywhere else. You would have to be a real pessimist to believe that the industry is not going to do very, very well in the next ten years. I want to be part of that growth."
There is no doubt that the cable industry will do well -- just as there is little doubt that the industry's No. 1 tycoon will co ntinue to do well, too.