Two-way TV to almost everywhere? An insider's view of future cable

Not so long ago, "video" meant only three things to most viewers: ABC, NBC, and CBS. Yet some visionaries talked about "cable networks" and "satellite communications," and predicted the time when an issue of TV Guide would be as thick as the Manhattan phone book. Today, as cables and satellites weave their invisible web of communication, the prospect no longer seems silly.

According to Gustave Hauser, chairman and chief executive officer of Warner Amex Cable Communications, the cable industry is in an explosive period. For example, consider Qube -- the Warner Amex brand name for "two-way interactive television." Want to talk back to your TV set? Push the proper button and make yourself heard.

It's quite a breakthrough. And it's only the beginning of new wave of TV technology. Home security systems, shopping from your living room, and official college courses are some of the services offered by the "interactive" system -- not to mention "data retrieval" of information from your local newspaper, your favorite encyclopedia, or just a department-store catalog.

The first Qube system was set up in Columbus, Ohio, in late 1977. A second system was activated this May in the Cincinnati area -- the world's first cable-TV system operating with a whopping 60 channels to choose from. Other installations are under way in cities from Pittsburgh to Houston, and Warner Amex is bidding for cable franchise in New York and Boston. In his New York office, Mr. Hauser recently discussed cable TV and his own Qube technology.

How did the cable boom begin?

Cable began as a technical service, to improve reception in remote areas. Later it began importing distant signals and offering various services and options. Pay TV came along, which operates by subscriptions.

Now cable encompasses the "interactive" mode, which allows people to participate in programs. And there are nonvideo systems where the equipment is used -- information retrieval, banking, shopping.

Have developments in cable usually caught on quickly with the public?

The idea of pay TV began with nobody really understanding or wanting it. Now everybody wants it. It's delivered by satellite; people buy one subscription, and then they buy many subscriptions.

Your new system in Cincinnati offers 60 channels. Are so many channels needed?

It's a chicken-and-egg situation: Which comes first? Channels that need programming, or programs that need channels?

Our system in Columbus includes a 30-channel service. When we started, we wondered how we could fill 30 channels; there were only four we could get from the airwaves. Now we're out of channels, just five years later!

So programs came along to fill the void?

Sure. To help fill one channel in Columbus, for example, we created a children's program called "Pinwhell." Then we realized it was good, and that the satellite system could distribute it all over the country.So we expanded its time, put it on the satellite, and suddenly the first non-pay cable network came into existence: "Nickelodeon," exclusively for children.

Now, of course, there are so many you can't count them. We have another one launching in August, for instance -- the music channel, with video presentation of the performers you're listening to. It's like a video disc jockey, 24 hours a day, from the satellite. It has already been accepted by cable systems reaching more than 2 million homes. "Nickelodeon" goes to 5 million.

What is the Qube system?

It's our brand name for interactive services, which is a logical step into the next level of cable service. With it, we're developing live programming where the viewer can participate. Not just for entertainment, but for education , too. We have live courses where the students talk back to the teacher. Other uses include public-opinion polling, market research, business. Mayors can ask their constitutents about affairs in the community and get immediate feedback, on an ongoing-dialogue basis, where the second question may follow from the answer to the first.

Are any other developments hot right now?

Yes. There's nonsubscription pay TV, where you order one program at a time.Pay-perview, it's called.

What's the advantage?

It permits delivering all kinds of programming that never gets in a package. We can present, say, a prizefight as it occurs. And it's been overwhelmingly successful where it's been tried out. People get together in someone's home and share the cost of a program, and have a social event. There can be special shows, operas, theatrical performances, sporting events.

People who create these events are very enthusiastic about the cable outlet, too. They can get into homes without being part of a package, and viewers can decide to buy or not, just as they do in the street.

This must increase the diversity of programming.

Yes. You can buy eight guitar lessons, or prepare for the college boards. And we can turn on homes by "narrowcasting" -- reaching certain people with a special interest. We can have training programs for Avon ladies or city firemen , sent into their homes and nowhere else.

There's also the "informercial," a long commercial that's really an information or demonstration program. With the interactive mode, the consumer can even be asked about preferences. And here you shade over into shopping: If you want the item, you can press a button to order it. The payment can even be automatic, using a credit card programmed into the computer.

The uses of the system are obviously broad.

Yes. In fact, we've created a system for dealing with burglar, fire, and health emergencies in the home. It's very secure, because it's monitored by the computer. If anything goes wrong, the computer knows within a second or two. This is another major service entering the cable industry, though it takes time to learn how to provide such things in the best way.

And the facilities keep expanding as these services multiply?

Yes. We've pioneered the hig-capacity cable, and now we're building systems with 100 channels. These will be used to provide services and to draw all the over-satellite systems. Hopefully there will be a tremendous number of these.

What's the next frontier?

We're already well into it: information retrieval. In our pilot project in Columbus, people can use their home terminal and call up any kind of information. Before long you'll be able to order merchandise, engage in banking , and perform other financial transactions, all by pushing buttons -- or ultimately, I think, by voice. All the administration is handled by the computer.The only thing you can't do is bargain!

So this is a good time for the cable business.

It's exciting and heady. The industry will be serving half the homes in the country by the latter part of the '80s, I'd say.

Are you interested in the way people see TV -- larger screens, 3-D, and other innovations?

The development of larger and better screens will create an interest in better delivery systems -- a clearer picture, sharper images -- and in alternative programming: You don't want to have a nice big screen and just three networks to watch!

So of course we're interested. And I'm quite sure cable technology will stimulate more program development. After all, the main concern is the product, not the delivery. We're on the verge of a tremendous outpouring of artistic and literary product.

So you feel creativity will benefit from current developments?

Until now, in the video area, creative people had no real outlets but the networks. Now the outlets are multiplying every day. I think we'll see a lot more opportunities and jobs for creative people, and the development of new production facilities all over the country.

And that may stimulate even more channels to provide even more outlets.

The system keeps growing -- based not on technology, but economics. The channel capacity has expanded as demand has grown, and as the opportunity to present material has grown. I expect that any shortage of capacity will be temporary. We'll keep expanding as the demand warrants, like any business.

With so many outlets, and with people using interactive systems, television is being democratized more than ever. Will this raise the overall quality of TV? Or perhaps lower it, through the famous lowest-common-denominator effect?

You raise an important point. The democratization is clearly going to happen. We've already had programs where the audience chooses the end of the story. How democratic can you get?

But I don't think this will lead to many people watching morem TV, except a few addicts. I think it will attract a lot of people who don't use the set very much now,m because for them there's nothing on.

Does the new interactive system represent a threat to privacy in the home? Isn't there at least a psychological effect?

It's true the computer is becoming omnipresent in our society. It's just a dumb animal that collects information, and it has to be used properly. We're using the greatest security restrictions in handling whatever modest information , relatively speaking, we gather. In any case, we know nothing about our subscribers except where they live, so we can send them a bill. If they purchase a program, we have to note that, to bill them.