Pay television

Pay television also known as subscription television or premium television,[1][2][3][4] refers to subscription-based television services, usually provided by multichannel television providers, but also increasingly via digital terrestrial, and streaming television. In the United States, subscription television began in the late 1970s and early 1980s in the form of encrypted analog over-the-air broadcast television which could be decrypted with special equipment. The concept rapidly expanded through the multi-channel transition and into the post-network era.[5] Other parts of the world beyond the United States, such as France and Latin America have also offered encrypted analog terrestrial signals available for subscription.

Not to be confused with pay-per-view.
This article is about television services in which rely on a subscription fee (which is paying) in order to be watched. For the forms of subscription TV services in which "pay television" is also sometimes used as a generalized term, see Multichannel television.

The term is most synonymous with premium entertainment services focused on films or general entertainment programming such as, in the United States, Cinemax, Epix, HBO, Showtime, and Starz, but such services can also include those devoted to sports, as well as adult entertainment.

Business model

In contrast to most other multichannel television broadcasters, which depend on advertising and carriage fees as their sources of revenue, the majority of pay television services rely almost solely on monthly subscription fees paid by individual customers. As a result, pay television outlets are most concerned with offering content that can justify the cost of the service, which helps to attract new subscribers, and retain existing subscribers.[5]

Many pay television services consist of multiple individual channels, referred to as "multiplex" services (in reference to multiplex cinemas), where a main flagship channel is accompanied by secondary services with distinct schedules focusing on specific genres and audiences (such as multiplexes focusing more on "classic" films, or family-oriented programming), time shifting, or brand licensing deals (such as channels focusing specifically on Disney films, or content from U.S. pay television brands if they do not specifically run their own network in a specific market). Typically, these services are bundled together with the main channel at no additional charge, and cannot be purchased separately.

Depending on local regulations, pay television services generally have more lenient content standards because of their relatively narrower distribution, and not being subject to pressure from sponsors to tone down content. As a result, programming is typically aired with limited to no edits for time or, where applicable, mature content such as graphic violence, profanity, nudity, and sexual activity.[6]

As premium television services are commonly devoid of traditional commercial advertising, breaks between programming typically include promotions for upcoming programs, and interstitial segments (such as behind-the-scenes content, interviews, and other feature segments). Some sports-based pay services, however, may feature some commercial advertising, particularly if they simulcast sporting events that are broadcast by advertiser-supported television networks.

In addition, most general interest or movie-based pay services do not adhere to the common top and bottom of the hour scheduling of other cable channels and terrestrial broadcasters. As such, programs often air using either conventional scheduling or have airtimes in five-minute increments (for example, 7:05 a.m. or 4:40 p.m.); since such channels broadcast content without in-program break interruptions, this sometimes leads to extended or abbreviated breaks between programs, depending on when the previous program concludes and when the start time of the next program is. The only universal variation to this is prime time, where the main channel in each pay service's suite usually schedules films to start on the hour.

Programming

Films comprise much of the content seen on most pay television services, particularly those with a general entertainment format and those that focus exclusively on films. Services often obtain rights to films through exclusive agreements with film distributors. Films acquired during the original term of license agreements with a distributor may also be broadcast as "sub-runs," in which a service holds rights to film long after the conclusion of a distribution agreement (under this arrangement, the pay service that originally licensed the rights to a particular film title, or one other than that which had held rights, may hold the broadcast rights through a library content deal).

Many general interest premium channels also produce original television series. Due to the aforementioned leniency in content standards, they too can contain content that is more mature than those of other cable channels or television network. These series also tend to be high-budget and aim for critical success in order to attract subscribers: notable premium series, such as HBO's Curb Your Enthusiasm, Game of Thrones, Sex and the City, and The Sopranos, and Showtime's Dexter, Homeland, and Weeds, have achieved critical acclaim and have won various television awards. Some premium channels also broadcast television specials, which most commonly consist of concerts and concert films, documentaries, stand-up comedy, and in the past, theatrical plays.[5]

Sports programming is also featured on some premium services; HBO was historically known for its broadcasts of boxing, while Showtime and Epix also carry mixed martial arts events. Some general interest premium channels have aired other professional sporting events in the past: HBO for example, carried games from the National Hockey League (NHL), National Basketball Association (NBA) and American Basketball Association (ABA) in its early years, and from 1975 to 1999 aired the Wimbledon tennis tournament. Specialty pay sports channels also exist—often focusing on international sports considered niche to domestic audiences (such as, in the United States, cricket), and are typically sold at a higher expense than traditional premium services. Out-of-market sports packages in North America are multi-channel pay services carrying professional or collegiate sporting events which are sold in a seasonal package. They are typically the most expensive type of pay services, generally running in the range of $35 to $50 per month.

Some pay services also offer pornographic films; Cinemax was well known for carrying a late-night block of softcore films and series known as "Max After Dark"—a reputation that led to the network often being nicknamed "Skinemax" by viewers. Cinemax phased out this programming in the 2010s, noting the increasing amount of sexual content in other mainstream premium series (such as Game of Thrones) as having made a specific block redundant, the increased availability of porn via other digital platforms, and an increasing shift towards action series as part of its original programming strategy.[7][8][9][10] Specialized channels dedicated to pornographic films also exist, that carry either softcore adult programs (such as Playboy TV), or more hardcore content (such as The Erotic Network and Hustler TV).

Pricing and packaging

Pay television channels come in different price ranges. Many channels carrying advertising combine this income with a lower subscription fee. These are called "mini-pay" channels (a term also used for smaller scale commercial-free pay television services) and are often sold as a part of a package with numerous similarly priced channels. Usually, however, the regular pricing for premium channels ranges from just under $10 to near $25 per month per suite, with lower prices available via bundling options with cable or satellite providers, or special limited offers which are available during free preview periods or before the launch of a network's prestige series. However, some other channels, such as sports and adult networks may ask for monthly pricing that may go as high as near $50 a month. There are also premium television services which are priced significantly higher than the mini-pay channels, but they compensate for their higher price by carrying little or no advertising and also providing a higher quality program output. As advertising sales are sensitive to the business cycle, some broadcasters try to balance them with more stable income from subscriptions.

Some providers offer services owned by the same company in a single package. For example, American satellite provider DirecTV offers the Encore channels along with the Starz multiplex (both owned by Starz Inc.) in its "Starz Super Pack";[11] and The Movie Channel, Flix and SundanceTV (the latter of which continues to be sold in the DirecTV package despite Showtime Networks no longer owning Sundance, that channel is now owned by AMC Networks) along with Showtime in its "Showtime Unlimited" package;[12] Cinemax and its multiplex networks, in turn, are almost always packaged with HBO (both owned by WarnerMedia).

Though selling premium services that are related by ownership as a package is common, that may not always be the situation: for example, in the United States, Cinemax and Encore are optionally sold separately from or in a single package with their respective parent networks HBO and Starz, depending on the service provider. The Movie Channel and Flix meanwhile, are usually sold together with Showtime (all three channels are owned by ViacomCBS); though subscribers are required to purchase Showtime in order to receive Flix, The Movie Channel does not have such a restriction as a few providers optionally sell that service without requiring a Showtime subscription.

Unlike other cable networks, premium services are almost always subscribed to a la carte, meaning that one can, for example, subscribe to HBO without subscribing to Showtime (in Canada, there are slight modifications, as most providers include U.S. superstations – such as WGN-TV and KTLA – with their main premium package by default). However, subscribing to an "individual" service automatically includes access to all of that service's available multiplex channels and, in some cases, access to content via video-on-demand (in the form of a conventional VOD television service, and in some cases, a companion on-demand streaming service as well). Most pay television providers also offer a selection of premium services (for example, the HBO, Showtime and Starz packages) in one bundle at a greatly reduced price than it would cost to purchase each service separately, as an inducement for subscribers to remain with their service provider or for others to induce subscribers into using their service. Similarly, many television providers offer general interest or movie-based premium channels at no additional charge for a trial period, often one to three months, though there have been rare instances of free trials for pay services that last up to one year for newer subscribers to that provider's television service.

Distribution

Pay television has become popular with cable and satellite television. Pay television services often, at least two to three times per year, provide free previews of their services, in order to court potential subscribers by allowing this wider audience to sample the service for a period of days or weeks; these are typically scheduled to showcase major special event programming, such as the pay cable premiere of a blockbuster feature film, the premiere (either a series or season premiere) of a widely anticipated or critically acclaimed original series or occasionally, a high-profile special (such as a concert).

Subscription services transmitted via analogue terrestrial television have also existed, to varying degrees of success. Canal+ operated a national analogue terrestrial pay channel in France from 1984 until the 2011 closedown of analogue television, when it transitioned to digital with the other terrestrial analogue channels. Its Spanish counterpart, Canal+ Spain, also broadcast nationally between 1990 and 2005. Some U.S. television stations launched pay services (known simply as "subscription television" services) such as SuperTV, Wometco Home Theater, PRISM (which principally operated as a cable service, only being simultaneously carried over-the-air for a short time during the 1980s, and unlike other general-interest pay services accepted outside advertising for broadcast during its sports telecasts), Preview, SelecTV and ONTV in the late 1970s, but those services disappeared as competition from cable television expanded during the 1980s.

In some countries, the launch of digital terrestrial television has meant that pay television has become increasingly popular in countries with regular antennas. Conversely, even as Cord-cutting by pay television subscribers due to price increases resulting from rising carriage fees and as the use of digital multicasting by terrestrial broadcasters has increased since the late 2000s, there have not been any attempts to launch new over-the-air pay services in North America.

In Australia, Foxtel, Optus Television and TransACT are the major pay television distributors, all of which provide cable services in some metropolitan areas, with Foxtel providing satellite service for all other areas where cable is not available. Austar formerly operated as a satellite pay service, until it merged with Foxtel and SelecTV. The major distributors of pay television in New Zealand are Sky Network Television on satellite and Vodafone on cable.

In the 2010s, over-the-top subscription video on demand (SVOD) services distributed via internet video emerged as a major competitor to traditional pay television, with services such as Amazon Video, Hulu, and Netflix gaining prominence. Similarly to pay television services, their libraries include acquired content (which can not only include films, but acquired television series as well), and a mix of original series, films, and specials. The shift towards SVOD has resulted in increasing competition within the sector, with media conglomerates such as ViacomCBS (Paramount+), Disney (Disney+, and also having acquired majority ownership in Hulu—originally a joint venture of multiple broadcasters), and NBCUniversal (Peacock) having launched their own services to compete, and existing premium services such as HBO (HBO Now, succeeded in 2020 by HBO Max—a revamp of the service adding content from other WarnerMedia properties and third-parties) launching OTT versions of their services sold on a direct-to-consumer basis to appeal to cord cutters.[13][14][15]

Ambiguities

Pay-per-view
Main article: Pay-per-view

Pay-per-view (PPV) services are similar to subscription-based pay television services in that customers must pay to have the broadcast decrypted for viewing, but usually only entail a one-time payment for a single or time-limited viewing. Programs offered via pay-per-view are most often movies or sporting events, but may also include other events, such as concerts and even softcore adult programs. In the U.S., the initial concept and technology for pay-per-view for broadcast television was first developed in the early 1950s, including a crude decrypting of the over-the-air television signal and a decoding box, but never caught on for use at that time. It took another four decades when cable broadcasters started using pay-per-view on a widespread basis.[16]

Free-to-view
Main articles: Free-to-view and Free-to-air

"Free" variants are free-to-air (FTA) and free-to-view (FTV); however, FTV services are normally encrypted and decryption cards either come as part of an initial subscription to a pay television bouquet – in other words, an offer of pay-TV channels – or can be purchased for a one-time cost. FTA and FTV systems may still have selective access. Australia Plus is one example, as much of its programming content is free-to-air except for National Rugby League (NRL) games, which are encrypted.

See also

References
  1. Busch, Anita (2016-04-19). "Former Universal & Relativity Exec Michael Joe Joins STX As Film Group COO". Deadline. Retrieved 2019-09-04.
  2. Gross, Daniel (2013-08-10). "Why Time Warner Cable Can't Cave to CBS's Demands". The Daily Beast. Retrieved 2019-09-04.
  3. Steel, Emily (2015-05-21). "Epix Joining the World of Scripted TV With Two Original Series". The New York Times. ISSN 0362-4331. Retrieved 2019-09-02.
  4. Barnes, Brooks (2010-09-25). "A Fight Brews Over Hollywood's Video 'Window'". The New York Times. ISSN 0362-4331. Retrieved 2019-09-02.
  5. Lotz, Amanda D. (2014). The television will be revolutionized. New York, New York. ISBN 9781479890392. OCLC 891396456.
  6. Friedlander, Whitney (2017-08-16). "FCC Censorship Rules Vary for Broadcast, Cable, and Streaming". Variety. Retrieved 2019-09-10.
  7. Shire, Emily (October 15, 2013). "The demise of Cinemax After Dark: How the internet killed softcore porn". The Week. Retrieved August 1, 2017.
  8. Steinberg, Brian (October 8, 2013). "Cinemax Has Become Uncomfortable in Its Skin". Variety. Retrieved August 1, 2017.
  9. Sampson, Mike (October 9, 2013). "RIP Skinemax: Cinemax Looking to Ditch "After Dark" Softcore Porn". ScreenCrush.com. Retrieved August 1, 2017.
  10. Andreeva, Nellie (December 9, 2016). "Cinemax Returns To Action, Pulpy Series & Co-Prods In New Programming Strategy". Deadline Hollywood. Retrieved August 18, 2017.
  11. "DirecTV Official Site – Starz Super Pack Information". DirecTV.
  12. "DirecTV Official Site – Showtime Unlimited Package Information". DirecTV.
  13. "The Office, Friends and Grey's Anatomy Were Netflix's Most Streamed Shows Last Year". Adweek.com. Retrieved 2020-01-06.
  14. Blumenthal, Eli. "Disney Plus vs. Apple TV Plus and more: Which streaming service is right for you?". CNET. Retrieved 2020-01-06.
  15. Welch, Chris (2015-03-09). "HBO Now coming in April for $14.99 per month, Apple TV price cut to $69". The Verge. Retrieved 2020-01-06.
  16. "Will You Pay for TV Shows?" Popular Science, April 1952, pp. 124–127.
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