How Pay-Per-View Television Worked in 1951
Eugene McDonald enjoyed taking risks. He was an avid outboard motor racer who was fond of arduous polar expeditions and showing off his collection of gangster-used firearms. In the late 1940s, what he was proposing to do may have been the most radical idea of them all: getting people to pay for television, one program at a time.
McDonald was chairman of Zenith, a radio and television manufacturer since the 1920s. At the end of World War II, the company was able to revisit concepts they had been stockpiling. Among them was McDonald’s plan for something called Phonevision. A box would sit on top of a television and connect to a phone line; the viewer would be given a schedule for feature films. If they wanted to watch something, they’d dial a dedicated call center and request the signal be unscrambled—more specifically, that several key frequencies missing in the signal be sent over the telephone line. Each time they phoned in, one dollar would be added to their phone bill.
Phonevision, McDonald asserted, was the answer to television’s inability to secure theatrical films. They were too costly, with advertisers who paid for conventional programming unable to afford the rights. But with the consumer paying, that hurdle would be eliminated. Better, viewers wouldn’t have to suffer through advertising. The films would be commercial-free.
There was just one problem: the movie studios.
McDonald was turned down flat by the major film players of the era; they were beholden to theater owners, who were soured by the notion of having to compete with television for film audiences. One studio, 20th Century Fox, even went so far as to spread word they’d be screening television signals in theaters, reversing McDonald’s idea.
Eventually, McDonald managed to secure the rights for a handful of forgettable titles for a test run. In 1951, Zenith installed Phonevision into 300 Chicago-area households for 90 days to assess whether the idea had any merit. One movie a day was shown in the afternoon, evening, and late night. Almost immediately, the company found that people were tinkering with the boxes in an early form of content pirating; others were happy to watch a scrambled picture with clear sound.
The grand experiment didn’t prove much of anything. While households ordered an average of 1.7 movies per week, the fare was mediocre: 1945’s The Enchanted Cottage or the 1947 Alan Ladd vehicle Wild Harvest failed to attract attention. Worse, the distorted signals were subject to further interruption by passing planes or trucks. Zenith would later toy with Phonevision in New York and even Australia, but nothing seemed to gain traction; the Federal Communications Commission (FCC) had jurisdiction over a nationwide rollout and appeared unable to come to a decision.
Despite the hurdles, Zenith wasn’t without imitators. Skiatron was launched in 1952 and used IBM punch cards for orders and billing; Telemeter, which was owned in part by an enlightened Paramount Pictures, had a coin-operated device for the home. Zenith itself re-entered the market in 1961, this time armed with an RKO studio partnership and a sizable library of movies. But color television hadn’t yet reached a wide audience, and viewers were reluctant to pay for older films in black and white when they could catch newer films in theaters. Phonevision floated along at a loss until 1969.
Zenith had nonetheless proved “pay as you go” television was a viable business model. When cable boxes became more pervasive in the late 1980s, professional wrestling and boxing found a lucrative new source of income. But programming that strayed from combat sports was often a bust: a pay-per-view course on taking the SAT exams was a flop, as was NBC’s attempt to monetize the 1992 Olympic Games. Infamously, a deal for O.J. Simpson to be interviewed following his murder trial in 1995 was canned when boycotts were threatened.
Even in today’s fractured programming landscape, the right prizefight can still entice people into paying as much as $89.95 for a single evening’s entertainment. Maybe the next boxer who offers his thanks to trainers and sponsors should also mention Eugene McDonald, yet another man who suffered from the unfortunate condition of being ahead of his time.