The Demise of a Cable Directory

Heavy losses and poor prospects, despite advertising support

In April, when Time Inc. launched TV-CABLE WEEK, many analysts predicted that cable operators and their subscribers, although accustomed to low-cost program guides, would be ready to buy the information-packed, four-color magazine, which retailed at $2.95 a month. The expectations were wrong: Time Inc. announced last week that TV-CABLE WEEK was far behind its circulation targets, and will close with the Sept. 25 issue. Estimated pretax losses: $47 million, almost half of the $100 million that the company had planned to lay out during a four-to five-year startup. Said Time Inc. Editor in Chief Henry Grunwald and President J. Richard Munro: "We were prepared to spend more--if the prospects had warranted it. In our judgment they did not."

TV-CABLE WEEK offered 32 pages weekly of news and features, wrapped around detailed, "system-specific" program listings. Prepared with the help of a costly computer system, the listings cited, channel by channel, exactly the programs that a particular subscriber could receive. The magazine had to be sold twice: first to cable systems, which would share in the revenues, and then to those systems' rosters of subscribers. TV-CABLE WEEK met resistance at both levels. According to Time Inc. officials, many cable operators at first welcomed the concept of the magazine, but later declined to sign up. One reason was that the program guide might compete for subscriber dollars with more profitable pay-TV services. Also, many cable firms either publish their own directories or have contracts with rival guides. As of last week, TV-CABLE WEEK was available in only 19 cable systems, vs. a projected total of 30 by the end of 1983. In those markets, the magazine would eventually have sold to just 15% to 30% of households, against Time Inc.'s expectation of 40% to 60%. Thus the magazine was well below its rate base of 400,000 readers, though advertising sales were close to goals. Said Kelso Sutton, Time Inc.'s group vice president-magazines: "Our business plan depended upon high acceptance by cable systems and individuals. We thought the product would be so compelling that it would develop a new market."

Time Inc. owns the leading U.S. pay-TV network, Home Box Office, and one of the biggest cable-system companies, American Television and Communications Corp. But Sutton doubted that those ties affected cable operators' responses to the magazine. Said he: "That would not matter if the deal was right."

Although substantial prepublication research was conducted, TV-CABLE WEEK, unlike other Time Inc. magazines, could not be effectively test-marketed before launching. Producing issues for even a few cable systems for a long enough time to gauge renewal rates would have demanded nearly as big a staff and computer system as a full launch. Moreover, a test would not necessarily have uncovered the cable operators' reluctance. As the weekly's problems became evident, Time Inc. officials explored alternative editorial formats and distribution systems, including turning the magazine into a monthly. But the only viable possibility appeared to be a low-cost, less ambitious guide emphasizing pay TV, which would have lacked the distinctive editorial features of TV-CABLE WEEK and would have been vulnerable to competitors.

Time Inc. officials left open the eventual prospect of publishing some other form of cable magazine. Meanwhile, TV-CABLE WEEK subscribers were guaranteed pro-rata refunds. The magazine's 250 employees were granted extra severance pay, help in placement and priority for Time Inc. jobs. Said Grunwald and Munro: "Throughout TV-CABLE WEEK'S development and during its short life, the magazine's staff persevered and displayed the highest professionalism. The quality of the publication, from both an editorial and business point of view, was unique in its field." - This file is automatically generated by a robot program, so viewer discretion is required.