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April 2, 2013

History Books and the Cable Industry

      Larry Satkowiak

As I research the history of American television, I can only conclude that the cable industry must not have made much of a difference. Outside of brief references to the founding of the industry in 1948, the First Generation of cable pioneers are hardly mentioned and not given any credit for the phenomenal growth of television. The Columbia History of American Television sums up this entire period with the statement, “Although this community antenna television (CATV) only provided content that was freely available over the air in nearby metropolitan areas, the parasitic business enjoyed stable growth throughout the 1950s.” Well OK, but…

Television (think NBC and CBS) was launched in the large metropolitan areas simply because the economics favored the most populous areas in the country—such as, New York, Philadelphia, Boston, and Los Angeles. Unfortunately, if you lived out of the transmission range of the signal, you simply did not have the opportunity to watch television and the programming that people craved. This was the ideal condition for the typical American entrepreneur—find a need, find the technology, and then provide a service to customers at a reasonable price. The FCC put a freeze on new station licenses between 1948 and 1952, but by 1955 it was estimated that Americans owned more than 30 million television sets, which translated to about 65% of the country. In addition, there were 411 commercial television stations at that time and an estimated 400 cable systems.

Those 400 cable systems were mostly in small towns across America and not the big cities, so the subscriber base was still very low. George Delaplaine’s story is typical of this era. His family’s entrepreneurial roots run deep in Frederick, Maryland, where beginning in the late 1880s, his grandfather built the first house, opened a print shop and started the local newspaper. Frederick’s television signals from Washington D.C. and Baltimore were just out of range and the town simply was not big enough to attract its own television station. When talk of cable television came up before the community leaders in the 1960s, they turned to Delaplaine, one of the most trusted men they knew, to ask if he would consider bringing cable television to their community. The risk he took with his own capital benefitted his business and his community. Although he sold the system years later, Delaplaine is still contributing in significant ways to his hometown.

As entrepreneurs in a new business, it was common that the entire family was involved in making the business work. Our Pennsylvania friends certainly remember Joe Gans Sr. and his wife, Irene. Irene once told me that Joe would run the business and make everything work while she would do the bookkeeping and answer the customer service calls. There was no such thing as an eight-hour day. We should remember that those early entrepreneurs were a small group of people competing against the giants of the television industry. Sarnoff at NBC and Paley at CBS did not always look kindly at these young upstarts when it came to retransmitting their programming. The movie studios also felt threatened that cable could potentially disrupt their business. Many utility companies imposed onerous fees for pole attachments and regulation in Washington D.C. seemed to work against the industry, especially in its early days.

The Columbia History of American Television won’t tell you about George, Joe, Irene, or the numerous other entrepreneurs who contributed to the growth and development of television in America. Beyond that though, I think that most academics have missed one of the key legacies from the First Generation of cable: They instilled in all of us the culture of entrepreneurship and innovation that are hallmarks of our industry today. The academics who thought we were simply in the “television business" seem to have missed the main point. The First Generation of cable gave us a strong foundation that prepared us for the challenges that the industry faces now, and a future bound only by the limits of our imagination.

(Larry Satkowiak is president and CEO of The Cable Center, the nonprofit educational arm of the cable industry. The Center preserves cable’s enduring contributions to society, strengthens relationships between cable and academia and unites the industry around the advancement of exceptional customer service.

Comments (1) for "History Books and the Cable Industry"
Dear Larry,

You are neglecting to add that, as an Industry, we have greatly increased the consumer cost of watching television. We have made generations of athletes wealthier than they would otherwise have been. We have dumbed down the American viewer even more than they were (I didn\'t think that possible). We have helped the broadcast networks produce more bad television then ever before.

We\'ve contributed a great deal.
Posted by Mike Rahimi on Wednesday, April 3, 2013 @ 10:32 AM

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