Welcome to the Jungle: America After Vietnam
                                       AP US History 2007
   



Michael Chang

Author's Bio


Christopher Bryron is the author of the book The Fanciest Dive. He has been writing about business and finance for over forty years. He is constantly writing books about business and has contributed to many major corporations and companies. He is a contributing editor and has written for magazines such as Worth, Men's Health, and Travel Holiday. He has covered Wall Street as a weekly columnist for the widely known New York magazine. H has also been an assistant managing editor of Forbes magazine. In addition, he has also worked as both an editor and correspondent for Time. He graduated from Columbia University School of Law where he studied finance and law. He currently lives with his family in Connecticut.


Cable Television

     As times changed television permeated into mainstream culture. It became increasingly more common for people to purchase cable to enhance their viewing experience. The Fanciest Dive, by Christopher Bryon, narrates the rise and fall of Time Inc.'s and documents its attempt to control the rising cable industry. Time Inc., a leading magazine publisher, wanted to create a new magazine on this new market, which was estimated to grow to unimaginable numbers. Some even predicted that in the future almost every household would have cable TV. Knowing that someday cable would become big, Time Inc. wanted to reap its profit and thus created a magazine to focus on listing channels and to show that were on at a specific time. They launched TV-Cable Week early in 1983, which promised to offer state-of-the-art programming information to cable subscribers. Six months later however, the magazine was withdrawn at an astounding $47 million loss. Christopher Byron states, "The indirect damage was far greater, from slippage in Time's stock, which lost nearly $750 million in market value in little more than two weeks."1 What started out as an attempt to become a dominant suppler of cable TV listings ended up as a gigantic failure as they failed to attract distributors, and losses surpassed the initial estimated projections. All in all, Times Inc. served as an important example to others to show that not all corporate giants were successful in everything they did.
     Cable television was becoming bigger and bigger in the U.S. and more and more people were subscribing to cable networks. From the industry's inception, Time Inc. saw the opportunity to profit from this immense target in the future. They wanted to become mainstream and as common as the daily news. At first, they "attempted to co-market a publication in cooperation with cable operators. They would create monthly guides and market them to cable companies. Each cable company was, in effect, an individual market all its own, and the cable operator had the name and address of every potential subscriber in it."2 Time Inc. had to include cable operators in the marketing effort whether they chose to whole sale the guides directly to the operators or set some form of joint marketing arrangement. The company chose to cooperate with the cable providers and not become rivals for power. Both the cable companies and Time Inc. would work together in order to benefit from each other. To be successful and turn in an annual profit, the magazine would have to sell their product to roughly at least 30 percent of all cable viewers. According to the computer generated analysis, "Once they got it working, the ten-year forecasting model showed something quite amazing: assuming one could make the required penetration levels, and assuming renewals were satisfactory, and assuming cable operators kept signing on to distribute the magazine, then all one had to do was pour $100 million into the product over a five-year time frame, and in the sixth year the money started flowing back in broad rivers of profit."3 They were aiming to profit immensely in the long run and now that their plan was finalized, Time Inc. was ready to start the process.
     In order for the plan to succeed, advertising had to be flawless. The company had to create an enormous hype and a market that would purchase their magazine. They called upon Zucchi, which was the marketing director because, "The advertising community was Zucchi's home turf, the world he knew best, and he worked it with a frenzy. Cable TV viewers were the 'hot buttons' of the 1980s, he would tell the ad men, and Time Inc.'s new magazine was how they could 'reach out and touch it.'4 This was going to be 'the new magazine for the television,' the way to reach the "upmarket, affluent, involved" consumer. By 1990, cable TV would be in 60 million homes, and TV-Cable would be right there with them. "Cable subscribers will be the new consumers of the late 1980s and 90s," Zucchi would declare, "and we're going to be how to reach them in print." Time Inc. attended the 31st National Cable Television Association convention, as it was the annual high point for the U.S. cable industry, attracting executives by the thousands. Zucchi was the publisher of TV-Cable Week and the name of the magazine changed to TV-Cable Week. The price of the magazine was set to $.69 per copy as opposed to $.50 per copy charged by TV Guide. They believed that the higher price was necessary because of the higher production cost. Time Inc. was set to spend millions on its new magazine, upholding its reputation for sticking with ventures for years if need be, to make them profitable. While most of the staff was dedicated to the success of the magazine, some still doubted. Stan Sutton, CEO and staff leader, was already preparing a bail out plan. For example, he said, "These penetration figures are much higher than anything we've ever had in this building. 60 percent penetration? Come on!"5 There were still strong doubts about the success and some people were already starting up backup plans. TV-Cable Week "hampered our ability to develop other magazines" and "we also don't really know yet if technology will be able to cope adequately with an immensely complicated publishing proposition."6 Knowing that such risks would be taken, Time Inc. nevertheless proceeded to publish the magazine.
     TV-Cable Week launched with disappointing results. The company's public relations people hoped that the press conference might have attracted coverage by publications which never happened. "Time Inc. had committed $100 million to its newest property, and it was prepared to stay with it for years if necessary before earning a profit."7 According to the original plan, TV-Cable Week would sell instantly, achieving unheard-of penetration levels in every market, but in the end, "TV- Cable Week might not make its required penetration level."8 There were fewer than expected subscribers to the new magazine and it wasn't very popular with the pubic. There were many problems as one such person complained, " All I want is to start getting your magazine. I've paid for it twice already, but all you do is end me more bills! I'm an old, sick man. I just want to know what is on TV. Can't you help me?"9 TV-Cable Week, was getting less than 10 percent penetration, with subscriptions not in the tens of thousands, but in some cases merely hundreds. After the results their first launched, Time. Inc. found out it was a very big mistake to launch the magazine without testing it first. They were suffering very high losses in revenue and not making any profit at all. Time. Inc. started to consider bailing out before losing even more.
     TV-Cable Week at this point, was running out of options. It had to find a way to sell, or face bankruptcy. The employers decided to have a meeting with all of the 251 employees which were currently working full time under TV-Cable Week. The solution to the problem came in three edition of the magazine. "30 Cent cheapo, 60 Cent Medium Cheapo, and 1 El Cheapo Grande," were their answers to the problem. They would create new editions that ranged from cheap to moderately expensive. "It'll be like Burger King-three monthlies, any way you want 'em. The cheapest version would only have pay TV listings; the medium priced version would contain pay TV plus basic cable listings; the top-of-the-line version would have all that plus broadcast listings. "10 Even with such adjustments, success did not follow. They faced mainly the problems, "no efficient technology to deliver the service, and worse, no market demand."11 Their only option left was to terminate TV-Cable Week, and production ended with the 25th issue.
     The author, Christopher Byron, believes that the higher ups were all to focused on making money and didn't pay enough attention to the subscribers, which ultimately led to the downfall of the magazine. He believed that success or failure; it didn't really matter for the high ranking people of Time Inc. as they would still be making immense money. For example, "Munro's annual salary and bonus package totaled $710,907.00 the highest in the corporation, and he held rights as well on $2.5 million in exercisable stock options He was the first chief executive in the company's history to have been made a millionaire on a track record of entrepreneurial failure."12 There were a total of 251 employees who worked full time under TV-Cable Week. Each of them played a role in the downfall of the magazine since they contributed to it. There were many featured articles which had insignificance importance which rarely anyone paid attention to. In addition, the staff was tricked into believing that their jobs were long term, and that they would be working on the magazine for at least a period of five years. Little did they know that Time. Inc. would stop production in less than a year. The magazine was filled with much unnecessary information. People didn't need to know where the show was produced to look up the scheduled viewing time. Also, from the start, Time. Inc. wasn't 100% determined to follow through with the magazine all the way since there were already people planning "bail-out" scenarios. Christopher Bryon may be biased in that he was narrow minded, and didn't see the overall picture as the executives may have.
     The rise of cable TV was inevitable; everyone saw it coming as the next big thing, and it was even assumed to someday become as big as radio. Many different companies tried to benefit, profit, or base their business on the new industry, and Times. Inc. was just one of the many that tried to become compatible with the newly developed technology. It wanted to provide according to the needs of the people and to do so, they created the magazine TV-Cable Magazine, a magazine that would list the TV shows and the times. Unfortunately, Time. Inc.'s TV-Cable Magazine failed to gain the support of the consumers, as there were already magazines that existed besides TV-Cable Magazine listing show times. It also "promised to provide state-of-the-art programming information to cable owners across the country."13 Cable TV, a rival magazine, had already gained most of the support and subscribers of cable viewers. In addition, their listing guides cost less and went straight to the main part, leaving many unnecessary extras out. TV-Cable Magazine, on the other hand, included many features, which weren't important or associated with cable television. Instead, it was a very big failure and called, "the quickest and costliest failure in magazine publishing history."14The communication industry was shocked when Time. Inc, known for staying with an investment in long term bailed out so quickly with their new magazine, which didn't even last over a year.
     The book had various strengths and weaknesses. It took the side of the workers and progressed through the creation of the magazine up until the magazine stopped production. The workers were the victims of the executive leaders of Time. Inc, who failed to realize the mistake they were making. They were overconfident and inflated projected numbers believing that much of the population would want to purchase this as they believed essential magazine. The fact that they forgot to test the market first showed how much risk they were taking. "If you want to know how gutsy Time Inc. is, think of this: we launched this magazine without ever even testing it!".15 "Byron, an editor with the ill-fated publication, furnishes the answers in this inside account of corporate bumbling and confusion."16
     When marked a watershed in American cultural history in that cable television became common, people started watching more it and purchasing more channels and subscribing to them. This time period marked the beginning of more networks and the expansion of television, and the industry boomed during this time. Almost all households had a television somewhere, and in most houses there was more than one television and even up to three or four. Television technology also became more advanced as time went on. For instance the installation process for cable television became much more efficient. The cable television industry also became very popular among the average citizen. It was very crucial to the citizens and had a vast influence on the citizens. People got their daily news from watching TV, and also became influenced under it. Commercials created trends for merchandise and the advertising industry had a whole division dedicated television advertisements. Cable TV can change the way people think and may also cause some people to become addicted. It wasn't very expensive so people were able to purchase it. Cable TV was easily installed and could be done locally by a local cable company provider. Cable TV can also help the public by showing them education programs that were meant to be viewed at home. While cable television proved to be successful, "TV-Cable Week failed because the publication's marketing formula 'proved unworkable'"17
     The downfall of TV-Cable Week had quite an impact on this era today. Many companies learned from the mistakes Times. Inc. made while publishing their unsuccessful magazine. From the start, many doubted the success of TV-Cable Week. There were already some magazines based solely on giving the subscriber information on television show times. Time Inc. believed that they could crush their competition by adding in a lot of extras and more features which they believed would enable them to steal their opponents subscribers, but it as proved to be unsuccessful. Today, there are still many companies who are doing the same thing. For example, companies are still trying to have an edge on each other. They try to attract and provide more benefits and want to be dominant in the market. They want to be superior and build up a good repetition among others. TV-Cable Week, was just an " outstanding case history of a major business failure."18 Over the years, Time. Inc. has had numerous success creating new magazines, which have all been very popular. TV-Cable Week was Time. Inc's newest and latest magazine in 1981 which had cost over 50 million to produce. The communication industry was simply shocked, when TV-Cable Week was suddenly dropped. It was seen as the "quickest and costliest failure in magazine publishing history."19 Byron, the editor of the poorly configured publication, gives the answers in this inside account of corporate confusion and failure. The steps to the complete destruction of the magazine set an example and standards for others not to follow. This book shows the perfect example of a case in history of a major business failure.





Endnotes

1. Byron, Christopher. The Fanciest Dive. W.W. Norton & Company, Inc., 500 Fifth Avenue, New York, 1986, 12. 2. Byron, Christopher. 55. 3. Byron, Christopher. 77. 4. Byron, Christopher. 81. 5. Byron, Christopher. 132. 6. Byron, Christopher. 146. 7. Byron, Christopher. 157. 8. Byron, Christopher. 191. 9. Byron, Christopher. 212. 10. Byron, Christopher. 252. 11. Byron, Christopher. 275. 12. Byron, Christopher. 283. 13. Kenneth, Kister. 178. 14. Publishers Weekly 1. 15. Byron, Christopher. 212. 16. Kenneth, Kister. 178. 17. Byron, Christopher. 12. 18. Library Journal February 15, 1986, 1. 19. Byron, Christopher. 3



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