Interview Date: Friday November 12, 1999
Interview Location: Denver, CO
Interviewer: Gerry Yutkin
Collection: Hauser Collection
YUTKIN: This interview is being funded by the oral video history project of The Cable Television Center and Museum in Denver, Colorado and it’s funded by the Hauser Foundation. My name is Gerry Yutkin and we’re here talking with Greg Liptak today. Greg has been one of the pioneers; one of the leaders in the industry. Probably one of the most respected people in the industry I might say, and it’s a pleasure to have you here and thank you very much for taking the time out of your schedule.
LIPTAK: Thank you, Gerry, and it’s a pleasure to be here and thanks for those nice words.
YUTKIN: You’ve been in the business for a long time and one of the things I think about you is that you have moved from television production to cable to programming to marketing and now you’re into a new field, so let’s hear about that first and then we can go back and do some reminiscing.
LIPTAK: Okay, very good. Yes, Gerry, I am the chief executive officer of a start-up company here in Denver called Across Media Networks. About five or six years ago, the founder of Across Media Networks approached us at my previous gig at the Jones companies. I spent 15 years with Glenn Jones as President of Jones Intercable and then as President of Jones International. He wanted to know if the Jones companies would make a financial investment in Across Media Networks. I headed the due diligence team that investigated AMN, recommended to Mr. Jones that we make the investment. He decided he didn’t want to but I became excited about what I saw five years ago and proceeded then about six months ago to make an investment in AMN. Some folks say I bought my way in and became CEO. So let me tell you what AMN does.
LIPTAK: In the history of cable, dating back probably twelve to fifteen years ago, when we started selling local advertising on cable systems, when the national networks – Turner and CNN and MTV and Discovery – gave the cable operators two minutes per hour for local advertising sale, cable industry ginned up and developed local advertising sales teams in nearly every market. Well, a group of people found that by the creation of what were called photo advertising channels, a whole new revenue stream could be tapped at the local cable systems. It was generally realtors and automobile dealers principally, but also other kinds of retailers in a local community, and a channel would be created that would often have a static picture of a home and it would list the price and have a picture of the real estate agent and a phone number and there’d be sort of one picture after another. Well, it took a lot of money to create the artwork at the local cable system to do that. I mean, you had to have creative artists that prepared these frames and often by the time that you spent the money to get the artists you could not make a profit in this kind of activity. So a fellow here in Denver, who was with a small multiple system operator called Triax Communications Corporation, a fellow who is now my partner, Dave Downey, came up with the idea of centralizing that creative function. Having a group of artists at one central location that would prepare all of these frames and then they would be transmitted down to a computer at the cable system head end and then displayed on the cable system, thereby centralizing that function, you could make money at the local cable system. So that was Dave’s original idea. Of course this started five or six years ago with some experimentation at Triax at a time when there were indeed computers, but the computer technology of course has exploded so that today these computers can do animated graphics, audio files and music can be presented as well as full motion video. So the whole thing changed. I became excited about that possibility, and then two other things happened to me in my experience that caused me to make this move to this start-up company. At the Jones companies, I was in charge of the Jones Radio Network and one of my responsibilities, and we built a terrific, the nation’s third largest radio network operation, and we started to get a lot of advertising from the .com companies. Amazon.com, Ebay, Priceline, Barnes & Noble, etc… and for us this became a very big new revenue source and this was a year and a half ago. So I called a number of them and said, “Well, thanks for supporting us, but why are you doing that?” They all said, without exception, that you can build internet websites, but if you don’t have a media engine, and that was the term several of them used, if you don’t have a media engine to promote viewership of those websites, nobody looks.
LIPTAK: So, I got thinking about what Dave Downey was doing at Across Media Networks, and as strong as radio is, how much stronger would it be with television, that if in a local community you had a television opportunity to promote viewership of a website. And then I got thinking, why shouldn’t the cable operator develop a community internet website. I mean, where is it written in stone coming down from the mountain that only the local newspaper shall do it or only city search shall do it. Why shouldn’t a cable operator develop a website and use all of our skills to bring people to that website with local information. So those are the things that caused me to say, wow! This little developmental company here in Denver with about 110 employees, very creative computer technologists and graphic artists might be able to develop a new interesting niche for the cable operator. So I’m sorry, that’s kind of longwinded but that’s why I’m here and we’ve just started. It’s going to take a lot of money to build this company over time and so we looked for an investor and I’m proud to say that some of my long time, very respected colleagues in cable now own us. Adelphia Communications Corporation of Coudersport, Pennsylvania, John Rigas, Timothy, Michael and James Rigas bought control of our company and we’re rocking and rolling.
YUTKIN: So the cable operator would come to you and say, this is my town, let’s make a website.
LIPTAK: Yes, exactly. They would say, “Come in. Let’s build a photo advertising channel on cable and build for me a community website simultaneously.” Because we have local salespeople in the community, then, we can sell local merchants participation both on television and on the website. And we’ve discovered two other things, Gerry, that I want to mention that are very exciting. We have software that we have exclusively licensed here in the United States called Billboard, which enables anyone who has access to the internet to go to a certain website, create a message and send that message then both to our television channel and to the internet website. So think of those possibilities in classified advertising, for example. We put the power of the internet and the power of communication at the fingertips of people and it’s going to have an impact as we launch this in communities. It’s going to have a major impact, I think, on the daily newspaper as we’re able to bring a lot of this classified advertising material to the web and to cable.
YUTKIN: That’s incredible. That’s, in some ways, an extension of the local origination programming that was so very much a part of the franchising process in terms of awarding cable franchises in the ’80’s.
LIPTAK: Yes, you’ve hit it. In fact, one Saturday morning about four months ago, when I was pitching this idea to John Rigas, and you know John, in his home in Coudersport, Pennsylvania, when we pitched this Billboard idea, John said, “That is the culmination of the promises we made to communities twenty years ago.” He immediately saw that putting this power in the hand of the people would open it up. So we have communities now where it’s not uncommon to get four hundred community messages a month from organizations. My dream is that every single organization in a community will have a category on the website. In Denver, the Junior Symphony Guild will have its own category and members will be able to go in and see the latest information; not having to rely on a monthly newsletter.
YUTKIN: That’s come a long way.
LIPTAK: It has.
YUTKIN: Let me go back now to the fact that I know that you started in TV production. You’re a graduate of the University of Illinois, one of the better schools I think in the country, sometimes the football team is not as good as it should be…
LIPTAK: Most times. (Laughter)
YUTKIN: (Laughter) Well, we’re going through a period now. I know you studied marketing and business and your first job was in what?
LIPTAK: My first job was in radio with a small radio group broadcaster in my hometown of Streator, Illinois, and then I went to work for them in a place called Decatur, Illinois where they owned a radio station.
YUTKIN: That’s where, who’s the big company in Decatur? Archer, Daniels…?
LIPTAK: Archer, Daniels, Midland. ADM.
YUTKIN: What did you do in radio?
LIPTAK: Well, you know, in a local radio station you do everything. So I was doing news, I was on the air as a disc jockey now and again, I was out talking to clients, I was writing copy.
YUTKIN: Sweeping the floors?
LIPTAK: Of course, turning on the transmitter. (Laughter)
YUTKIN: Got to remember to do that, right? How long did you do that before you went to…
LIPTAK: Well, actually I sort of did a little of that in high school and through college and worked at the college radio station at the University of Illinois and then got a commission in the U.S. Army Signal Corps and went to work for a few months at this radio station in Decatur before getting called up to the military. And then after that serving, I came back and got a master’s degree at the University of Illinois and then went back to work for this local radio station for awhile.
YUTKIN: Okay, and then when did you go into television?
LIPTAK: I went into TV, I think, in about 1966.
YUTKIN: So that was about the time of Vietnam.
LIPTAK: A little bit after Vietnam.
YUTKIN: Well it was starting up.
LIPTAK: I’m sorry, that’s right.
YUTKIN: And you were out.
LIPTAK: I was out of the military before the conflict really escalated, right.
YUTKIN: And then you went into TV production.
LIPTAK: Actually, I went to television news. I was looking for a job in sales but couldn’t find a job in sales so I went into television news and worked for a number of months at WAND TV in Decatur, Illinois, the Champaign, Decatur, Springfield market.
YUTKIN: And where did you go from there?
LIPTAK: Well from there, it was interesting how personal life coincided. My wife, who is here at our taping, we were married and literally right after our marriage, I went to work for the Cox Broadcasting Corporation in Lakewood, Ohio through a contact at graduate school at the University of Illinois. A fellow I went to school with was a Georgian and went back to Atlanta and the Cox company was going to get into cable at that point and he was serving as a consultant to them and he said, “I know this guy, he’s working for a UHF television station,” which was a real strike against you at that point in those days, “it’s an ABC affiliate,” another strike against you because ABC was at the bottom of the heap, “so he ought to be a guy who knows something about the competitive market and cable’s entering a competitive market, you ought to call him.” So they did and I went to Lakewood, which was one of the first cable systems ever constructed in a big urban market.
YUTKIN: Did you sense the possibilities of cable at that time?
LIPTAK: No, I don’t think so. This was before Pay Television, it was long before…
YUKTIN Early ’70’s? About 1971 or ’72?
LIPTAK: No, Gerry, it was ’68. This was ’68. So the best cable could hope for at that point was that the government would open up the door and permit the importation of distant independent signals into a market and that was the premise upon which the Lakewood cable system was built. Lakewood is a suburb of Cleveland, so full national network service that we defined at that time as ABC, CBS, NBC and PBS – this was before Fox and UPN and all those guys.
YUTKIN: WGN was around though.
LIPTAK: Not on the satellite. So we were hoping that the government would permit this importation and we would bring into Cleveland signals from Canada and perhaps from Pittsburgh and that would bring the sports teams, principally from Pittsburgh and those markets and we’d have a product to sell. That was the hope.
LIPTAK: Well, then in 1968, the government decided we’re not going to do that. So the whole premise upon which this cable system was built, the importation of distant signals, suddenly evaporated. In fact, that’s constant theme of cable in the early days. We didn’t know if cable was going to continue to exist. We had a lot of threats from the government that, well this cable is just a temporary phenomenon and when we get full transmitters licensed across America, there’ll be no need for cable. It was that kind of thinking.
YUTKIN: So the thinking was contrary to a wired world, a wired country.
LIPTAK: Oh, indeed! Oh yeah, cable in those days was considered a parasite. Why was cable needed? All it did was take broadcast signals and retransmit them for a fee – a parasite on the communications landscape of America.
YUTKIN: Well, that was the broadcasters’ thinking.
LIPTAK: Yes, exactly.
YUTKIN: But it still got them into areas that would not normally be able to receive their signals.
LIPTAK: Well, yes. That was the golden days of cable, the first growth of the industry. Bringing television signals into those communities separated by distance or terrain from television transmitters. And then, phase two was building in the markets where full network service was available off the air.
YUTKIN: So you got into cable maybe at the wrong time without any incredible insight?
LIPTAK: (Laughter) Or at the best time.
YUTKIN: Well, at the best time, because you stayed. But you didn’t know then.
LIPTAK: I view it as the best time. I didn’t know then. In fact, my wife has often mentioned we’ve had a lot of valleys in cable that often you don’t recognize when you’re in them. Sometimes you do recognize them.
YUTKIN: Well, if you’re lucky. In hindsight, anyway. So the first job was in Ohio, and how long were you there?
LIPTAK: I was there about two years, or a little less than two years.
YUTKIN: And then what happened?
LIPTAK: Then, through industry contacts because we were doing some pretty creative things in Ohio, I was approached by the principals of a company that later became United Cable Television Corporation. It was then known as GenCoe, General Communications and Entertainment Company and the principals were Gene Schneider from Casper, Wyoming and his brother, Richard Schneider. The senior cable operating officer was a fellow from Moab, Utah, previously from Tulsa, Oklahoma, by the name of Ed Drake and then also at that time, partners in the company were Jack Crosby and Fred Lieberman and Ben Conroy. The two groups actually split up at one point and split the company and Crosby and Lieberman and Conroy took their cable systems and Gene Schneider kept his and I went to work for Gene in Tulsa, Oklahoma.
YUTKIN: That was quite a shift from Cleveland to Tulsa.
LIPTAK: It was, but the principals of the company were totally committed to the growth of the cable industry. Gene Schneider, then and today, although he’s not particularly well known here in the U.S. now, but he is, I think, perhaps one of if not the largest cable television operators outside the United States. He’s in Europe and the Far East and so forth. United Globe Com, or I can’t remember the exact name, they just changed the name.
YUTKIN: UIP, or it was UIP and now it’s – but it’s the old United that merged with Phillips and back and now I know that they’re very big in Europe.
LIPTAK: Very big in Europe. Well, back in 1968, Gene was an engineer, an aeronautical engineer that got into cable up in Casper, Wyoming through a contact that his uncle had with a local insurance man in Casper, Bill Daniels, and that’s how that all occurred.
YUTKIN: When was this?
LIPTAK: This was in the very, very early days of cable. In the late ’50’s perhaps. Casper was one of the first communities in cable where signals were brought in by microwave to a cable community and Gene and his brother Richard built that cable system, and their mother. Their mother worked there. So anyway, Gene was just totally committed to the growth of the cable industry and he had a vision about what cable could be and that’s why it was a very exciting time in Tulsa as we marched across America and gained a lot of really terrific franchises.
YUTKIN: I’d like to get to the franchising in a minute, but tell me what you did in Tulsa. What were you doing there?
LIPTAK: Well, I was involved in marketing, and for a number of years the development of marketing campaigns for all of the cable systems that the company owned and then a little bit later I was the senior operations officer in the construction and initial launching and building of all these cable systems.
YUTKIN: So that takes you up to about the mid-’70’s?
LIPTAK: Yes, ’75 actually, that’s right.
YUTKIN: And that’s when you went to Times Mirror?
LIPTAK: That’s correct. I actually in 1975 joined the company called Communications Properties, Inc., which later became Times Mirror Cable Television. Communications Properties, Inc. was the split off company from GenCoe. It was Ben Conroy, Fred Lieberman and Jack Crosby. I’d maintained contact with them through the years and they invited me to come to Austin and so I did.
YUTKIN: So you moved from Tulsa to Austin.
LIPTAK: Tulsa to Austin.
YUTKIN: And then when did Times Mirror become involved?
LIPTAK: Times Mirror became involved, perhaps in 1979, I think. The Times Mirror Company was the first major newspaper company to make a big investment in cable and they were fairly rapidly followed by some of their buddies: The Chicago Tribune Company, Knight-Ridder, the New York Times Company, and so forth, but Times Mirror was first and the reason I’m told they got into cable, and Gerry this is fascinating, is that even then they were worried that some electronic delivery system would somehow take away some of their classified advertising revenue. Isn’t it ironic? Back in the early days of Times Mirror, I heard all that discussion, cable is going to hurt our classified revenue stream and here I am at Across Media Networks and we’re poised to start doing it. So it takes a little longer then you think.
YUTKIN: Yes, and I guess a lot of people have predicted the demise of newspapers for many years.
LIPTAK: Yes, newspapers will be around but you know, the newspaper game is a very tough game. The readership continues to decline and the whole trend with young people today, they are simply not reading newspapers.
YUTKIN: I think that my kids probably get more of the news from the internet and television then they do from reading the papers.
LIPTAK: Right, well you know, the newspaper has a basic disadvantage and that is the cost and the time of getting information on a piece of a very scarce commodity print, coming from wood and trees and getting it to your home. I mean that, when you think about it, that’s a very cumbersome process compared now to what we can do electronically.
YUTKIN: How was it being involved with a newspaper company in terms of, you say it was almost a defensive position that they were taking, but did they leave you alone?
LIPTAK: No, at that point in their corporate life and up until when I left, they were in it for defensive purposes. I remember, there were fourteen of us that moved from Austin, Texas to Southern California and I was the last to leave. I remember the first budgeting process that we went through with Times Mirror and we developed plans to upgrade these systems and build line extensions and the senior executive that was in charge of us was just astounded because their experience was that you’d spend millions for a new printing plant but that printing plant you didn’t have to put any more money into it for 25 years if you maintained it properly. And here were these crazy cable guys who wanted to build these line extensions to serve sparse areas that wouldn’t pay out for three years. I mean, they just couldn’t fathom that. So they made, in my judgment, a lot of mistakes in their corporate strategy. They blew cable, finally got out of it, sold a group of great cable properties to Cox, merged with Cox. They sort of fouled up their involvement in broadcast television and in print, broadcast print and so forth. Wonderful people, nice people, great American communications company, but was not committed to cable. Like, by the way, a lot of these newspaper companies that have gotten in and have now gotten out. Have you observed that?
YUTKIN: Yes, I remember the story with the Tribune Company. At one point they had cable properties and they wanted to get out and then I think they kept them for awhile and then ultimately they sold them to us, to Jones, when we were together in the mid-’80’s and now they’re out.
LIPTAK: A senior executive of the Tribune Company told me a couple of years later, it was the single biggest strategic mistake they every made selling the cable systems.
YUTKIN: Well they made a lot of money though.
LIPTAK: They made a lot of money, yes. For then, Gerry, but today they would have…
YUTKIN: Yes, well that’s right. So that takes you up to the late ’70’s and the early ’80’s, which brings us to the days of the franchising. There are a lot of funny stories, there are some sad stories, almost tragic stories, but it was certainly one of the most exciting times I think that I could have gone through during that time, and I’m sure that you must have some much better war stories then I have.
LIPTAK: Well, I had a lot of fun. It was a fun time. Let me just try and put a couple of those things in perspective that everybody knows about. My new owner, John Rigas, was telling me the story that John owned this theater in Coudersport, Pennsylvania, that was his basic business and this travelling theatrical salesman came in and said, “John, you ought to get a cable franchise in this town. You’ve got lousy television of the air.” And John though about it and finally a few months later he did and he got the franchise by going in and giving a check for $100 to the city. That was the cost of the franchise and that was the case in the early days. Ben Conroy told me the story, great story, Ben, who later became the chairman of the NCTA, he’s actually the person who came up with the idea for The Cable Center and Museum, that was his idea. Ben was a senior operations officer at Communications Properties. Ben was a naval officer, a graduate of the United States Naval Academy and he knew he didn’t want to have a career in the U.S. Navy, he was a Brooklyn boy. As I understand the story, and of course these stories get better every time they’re told, but I believe this is the case: Ben was on leave at his home in New York. He was from Brooklyn, and he and his wife and a couple of kids were at the beach and he knew he wanted to get out of the Navy, didn’t know what he was going to do. And so the story goes, he picked up a magazine and he read this story about this industry called CATV. He asked his father, who was a banker, what his father thought about that and his father said, “Well, you know, I read something about that, there’s this guy over in Pennsylvania that’s building equipment. His name is Shapp. Let’s go talk to him.” So supposedly Ben and his father went to see Milton Shapp, founder of the Jerrold Corporation, and later Governor Milton Shapp of Pennsylvania, about Ben’s involvement and the Governor at that point at his desk said, “Yeah, I’d be thrilled. I’ve got all these towns that want to build cable systems.” He opened his drawer of his desk and here were all these letters from these towns that wanted cable and he said, “Go through those, pick any one you want, you can have it as long as you’ll build the cable system with my equipment you can have any of those towns.” So Ben shuffled through the paper and picked up a letter from the city of Uvalde, Texas, which was just north of the Corpus Christi, Texas air station where Ben either knew about or had been stationed, and Ben said, “I’ll take that one.” So he piled, Ben has five kids – seven kids – pardon me. I don’t know how many he had at that time, piled them all in the station wagon with his wife Toni and resigned from the Navy and off he went to Uvalde and built a cable system.
YUTKIN: When was that, approximately?
LIPTAK: Early – early ’60’s perhaps, late ’50’s, early ’60’s. I’m not exactly sure.
YUTKIN: A long time ago.
LIPTAK: A long time ago. So in the early days, then, cities that were separated by distance or terrain from television transmitters were anxious to get people to build cable like Bob Magness did in Memphis, Texas, or Bob Tarlton in the hills of Pennsylvania or the fellow up in Astoria, Oregon. So all this was going on. That was sort of one phase of the industry, bringing cable to these communities that were separated by distance or terrain, but then the second phase began, which is the phase I think you’re most interested in.
YUTKIN: Well, that’s the one with a lot of stories. So tell us about your experiences then.
LIPTAK: Okay. The thing that kicked off cable’s growth in America was this device. The domestic communications satellite. The dish. On September 30, 1975, the Time Incorporated Company, headed by Gerry Levin, made the decision to put a signal up on the domestic communications satellite – the first time this had ever happened. So on September 30, 1975, a program, The Thrilla from Manila, with Muhammad Ali, was broadcast to two cable systems in America and that kicked off then, the ability for cable to become a national television delivery system with program services all across the nation. Up until that time, signals had to be delivered by microwave from one community to another or originated in a community, which was very costly.
YUTKIN: Or with bicycled tapes, as I think HBO was…
LIPTAK: Or with tapes bicycled, right. So beginning then in 1975, and I think probably through the period of 1982, nearly every major city in America went through the franchising process and it was not uncommon to, at the multiple system operator level, to be processing five or six franchise applications at any one point in time. And this was before word processors and all the computer equipment when these big bound books had to be typed and printed and assembled and delivered to communities, so it was quite a time.
YUTKIN: Which was the first franchise in process that you were involved with?
LITPAK It was at United Cable. I think literally moments after I arrived on the scene in Tulsa, we began the process of trying to get the franchise in the city of Tulsa, which was our home and that, I think, was the first and the biggest one that I was involved in at that point.
YUTKIN: And if that was in ’75, that was before it became highly competitive, or much more competitive.
LIPTAK: Actually the Tulsa process was earlier, about 1970, because we actually, I think, turned on service in ’72 in Tulsa, so that was really before ’75.
YUTKIN: So after the satellite went up and much more programming became available with the superstations, that kind of triggered…
LIPTAK: I think that really triggered the major franchising activity across America.
YUTKIN: Have you got any horror stories?
LIPTAK: Oh yeah, I do. I remember one, of several of them, one was working on franchises up in what’s called the treasure valley of Idaho and Oregon. Boise, Idaho through Napa, Oregon. Fourteen communities went together in a single franchising process and I remember I was in charge of that and I made fourteen trips in three months from Tulsa to Boise, Idaho. I always came Tulsa to Denver and then had to get on a United flight from Denver to Boise and every time I flew with a pilot by the name of Captain O’Neill, he had a controlled crash landing in Boise. So I’d get on the plane in Denver and the pilot would come on the speaker and I’d pray that it wasn’t Captain O’Neill, but nine times out of ten it was Captain O’Neill. So that was interesting. We won the Treasure Valley. That was a good one. We had, at United Cable, a great deal of success early on with franchises. We got Chattanooga, Tennessee and we were kind of early in the game. We’d gotten Tulsa. At that point the company had Albuquerque and Hayward and San Leandro, California and on and on and on, Charleston, South Carolina. We were very successful in the early days. Far too successful because we didn’t have the money to build the systems and later Gene had to sell a number of the cable systems.
YUTKIN: Well, tell me more about that. If they were more successful was there a tap dancing that was done or did they just have to pick and choose what they were going to keep and then sell?
LIPTAK: Yes, I think that’s what happened basically. United Cable at that point kept Tulsa, its home base, sold off Albuquerque to the Tribune Company, sold Chattanooga and Charleston, because it didn’t have any operations near there and kept the California properties. Sort of a judgment community by community.
YUTKIN: My experience was that situations like that, being looked at from the other side, from the community standpoint, and we had some major problems with that in New York State, wanted to prevent cable companies from franchising, obtaining the franchise and then turning them around and selling them for profit. I think what you’re saying is that they didn’t really intend to do that, at least United didn’t.
LIPTAK: Not at all, no. United intended to be a builder and operator and was in many places.
YUTKIN: But maybe there were companies that were just getting franchises for political reasons and they’re probably not around anymore, I bet.
LIPTAK: Probably not around, and often were not around shortly after the franchise was granted in some cases. It was a very tough process because it became highly political and highly competitive and there was the term use, the “rent a citizen”. You’d go into these processes where the cities would adopt an enabling ordinance and then there’d be a mad scramble by eight or ten cable companies to try and get really powerful and influential local people as their partners and they were often let in without making any financial investment. They were given some equity in the partnership and their job was to deliver the franchise through their political power.
YUTKIN: I got in the business in 1979 with ATC, which is now Time Warner, and it was shortly after ATC had been franchising, I believe in Syracuse, and I think that was about the first time that they went with local citizens and the company, at least internally, was not all that thrilled about having to do that because it was almost a defensive thing. I don’t know if the industry really enjoyed that because of the image that it gave, but they seemed to have no choice.
LIPTAK: Yes, one of the best organized franchise processes was in a community in Kentucky – Lexington, Kentucky – wonderful town that’s turned out to be a great cable system. There were, I think, either seven or nine applicants for the franchise and I was with the Times Mirror Company at the time and they held the big franchise presentations in their convention center, three a night, in different rooms in the convention center, so the crowd would get up and move from one room to another. Very well organized, so the applicants could get set up. Lexington is a big horse town, horse country.
YUTKIN: Oh, yes, Churchill Downs.
LIPTAK: So we hired a California company. We hired Ed McMahon, who was very popular on the Tonight Show at that time, to be our spokesperson for Lexington, Kentucky and we recorded him at the Santa Anita racetrack in LA.
YUTKIN: But that’s not Lexington.
LIPTAK: That’s not Lexington. We had to be very careful not to shoot any of the palm trees. We shot him at the stables, actually, but no palm trees because they’d know he wasn’t in Lexington and that was an experience. I remember we had to pay him 7,500 dollars, which was a lot of money at that time for 60 minutes work. We had to have a limo pick him up at his residence, bring him, it had to all be on TelePrompTer. His agent told us he would do one take, if we didn’t get it in one take that was it, we still had to pay him and off he’d go. Those were the conditions. Ed McMahon was our spokesman, he did a great job by the way, but we lost the franchise.
YUTKIN: Any more? Go on.
LIPTAK: Yes, I think Gerry, my favorite story was from a little town in Oklahoma, Stillwater, Oklahoma, not so little, home of Oklahoma State University. Big franchise competition, a lot of interest. Stillwater was just far enough away from the television transmitters in Oklahoma City that there was a bit of a reception problem, so everybody knew we were going to have a gangbusters cable system here, everybody’s going to want it. Well, a lot of local people were involved as parts of the teams that were going for the franchise and at one point in the proceeding, some local person got up and made these sort of inflammatory statements about one of the other outfits. All at once, these two guys rushed to the back of the room and got into a fistfight and we’re all sitting there watching it and there’s this fight going on with the locals. So there was intense competition. Intense.
YUTKIN: I know there were families that broke up over these things. We were involved in a franchise renewal in Columbus, Nebraska with ATC and long standing friendships went by the wayside and it was tougher for the local people because they had to live with it afterwards. Of course, if you had a good company, they delivered on what they promised, but I remember the story about a fight, I think between two council people in Green Bay when it was awarded. They were very, very emotional and I’m glad that’s past us now.
LIPTAK: I guess I’m glad it’s past us. It was really fun. It didn’t seem like a lot of fun at the time, but in retrospect it was a lot of fun.
YUTKIN: It was fun if you won.
LIPTAK: If you won, or if you won your share. You didn’t expect to win them all and especially if you got a good community.
YUTKIN: Yes. Let me go on to some of the people that you’ve known in the industry. You’ve known them all; you’ve probably worked with most or all of them. Who are some of the people that have been influential in your career. Some of the people that you admire, some of the pioneers that you’ve known and worked with.
LIPTAK: Alright, good, good. Some of these names may surprise you. Some of them you may not recognize because they may not have been around in the business for awhile, but the first name I would suggest is Leonard Reinsch. Does that name ring a bell?
YUTKIN: Yes. I had the privilege of meeting him, I spent some time with him and we did an interview with Newt Minow, who also mentioned Leonard Reinsch. Tell us about him.
LIPTAK: Yes, Leonard Reinsch was the chairman of the Cox Broadcasting Corporation and he had a distinguished career in building radio and television properties for the Governor Cox family of Dayton, Ohio and in connection with that, he was an advisor to the Democratic Party and the Democratic political candidates through his whole career. I respect him because he was the first major group broadcaster in America to get into cable and he and his company were roundly criticized for that – traitors. Traitors to the broadcast business. They got into cable. They bought the big San Diego cable system. But Leonard saw the future, he saw what that would do and so he is one of my heroes. One of the great people.
YUTKIN: I spent an evening with him when we were purchasing some properties and doing some transfers and I’m sorry that he’s not part of this project. He passed away a number of years ago.
LIPTAK: Yes, about five or six years ago, perhaps. A real visionary and a real gentleman.
YUTKIN: A real gentleman, yes. Who’s next?
LIPTAK: The next on my list is Chuck Dolan. Cablevision Systems Corporation. Chuck is the founder of Home Box Office. He then sold HBO to Time Inc. and started to develop cable properties in Long Island. In my judgment, his contribution was the development of HBO, but also he did and is doing something else and that is the packaging of cable program services. There was a point when in cable we thought all you should do is just sell basic cable, but Chuck led the way by packaging sports channels and HBO and basic cable all into one giant offering to the consumer and made the strength of the package much stronger than our sale of individual parts. So he’s the king of packaging and to this day is still very active in the industry although he is, I think, retired. Semi-retired.
YUTKIN: He is one of the pioneers who probably will never retire. Those visionaries I think find it hard to give things up and always want to continue with some row of work. I remember in my early years, when we would look at the statistics in the trade publications, that Cablevision was always the one that had the highest pay penetration and way ahead of everyone.
LIPTAK: The highest revenue per subscriber. I think that’s the case even today. Next: Gerry Levin. Gerry, the current chairman of Time Warner, back in 1975 was the executive who recommended to the board of Time Inc. that they should take their Home Box Office product to the satellite. And I’ve told a story about that. I don’t know if it’s apocryphal or not, but it probably embellishes upon the telling. Supposedly Gerry went into the board of Time, Inc. All of these East Coast Brahmans that ran this big magazine empire at that point.
YUTKIN: At that time, yes. Well, the Luce…
LIPTAK: The Luce family, etc… and Gerry made this pitch about the satellite and HBO and so forth and then he left the board meeting. Supposedly one board member said, “Who was that and what in the world was he talking about?”
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START OF TAPE 1, SIDE B
LIPTAK: But Gerry sold them and they agreed to do it and so we launched on the satellite with these giant 33 foot dishes, it was a major project to build an earth station back in those days. You had to get zoning approval, FCC approval. Now we get it a meter and a half, but it was a big deal at that time. So Gerry Levin, in my opinion, is the father of… people say Bill Daniels is the father of the cable industry. I believe Gerry Levin is the father of the modern cable industry because he’s the one that created the national service by means of the satellite. Ted Turner. Mouth of the South. Who would not agree that Ted has done so much for the cable television industry? At the time he took his independent station on the satellite roundly criticized by all of his buddies in the broadcast business but he stuck with it and built an incredible empire. So he’s obviously one of our heroes.
YUTKIN: It’s interesting that around the time that TBS became a superstation, I think United Video was putting WGN up and I think at that point WGN was not too happy about it and I think they fought it. I think that’s come around to be the opposite and I think they’re probably happier now than they ever dreamed they could have been. Who else?
LIPTAK: The next one is, and I’m not so sure that this is an individual, but it’s the Qube project at Warner Cable and perhaps the individual should be honored is Gustave M. Hauser.
YUTKIN: The benefactor of this oral history program.
LIPTAK: Gus Hauser. They created the interactive service, struggled with it, a fledgling technology in Columbus, Cincinnati, a couple of other places and brought the attention of the nation’s press, I think, to what cable’s promise could be. Now none of those really worked out from a commercial point of view. They all turned into fairly standard cable systems, but it was an exciting time and in that group were people like Nick Davatzes at A&E and Larry Wangberg and other people like that. So the Qube project was a terrific one.
YUTKIN: Well, I think that it’s coming to fruition now in a slightly different format.
LIPTAK: It is indeed. It is. Next on the list, and this is not in necessarily a priority order, would be the creators of AT&T BIS and that would be obviously Bob Magness and John Malone. Bob Magness with his incredible vision and quiet soft spoken gentleman from Oklahoma built an empire, brought in John Malone, who Bob has said several times in the press, he’s the smartest son of a bitch I ever met. Brought John in to run his empire and they created this immense operation, which now is owned by AT&T and of course the programming side is AT&T. Maybe it will be spun out at a point but Liberty Media Corporation that owns interest or has management in, I think, it’s over 90 different program services. So it’s just amazing what’s been created and a whole group of people surrounding John and Bob; J.C. Sparkman and Bill Brazile and etc, etc… I have a lot of respect for Mr. Schneider, who I mentioned to you.
YUTKIN: Gene Schneider.
LIPTAK: I worked with Gene for a number of years. He built a great domestic company, which he sold to John Malone and Bob Magness. Then taking some of those proceeds, started to build an international company and they are headquartered here in Denver. We don’t see a lot of the people from UIH, but they’re certainly here and if you read the trade press about international cable developments, certainly UIH is at the top of the list. So, what a company Gene has built.
YUTKIN: You know, a lot of cable companies were into international areas in the late ’80’s, early ’90’s. Why do you think they’ve been so successful?
LIPTAK: I think they have been so successful because they avoided Great Britain. Most of the U.S. domestic companies that got involved in international cable participated in the development of cable and telephony in the United Kingdom and cable never sold particularly well in the U.K. Even today, 24-25% of the subscribers buying cable is a pretty good number. So U.K. cable was very, very tough. Gene, in fact he told me this a number of years ago, that he did not like England. He did not like the U.K. He saw a, if you will, a more traditional cable opportunity in some of the other places that he went to like Israel and Malta and then with the Phillips Company in a number of places in continental Europe.
YUTKIN: In Poland.
LIPTAK: In Poland, yes, yes. So he avoided the very difficult times that 4 or 5 U.S. MSO’s had in the U.K. and concentrated his efforts in what has turned out to be, in my judgment, more lucrative, better opportunities. At least then. U.K. cable, as you know Gerry, is starting to come around now, but it was tough.
YUTKIN: Yes, well but now telephony is a bigger portion of it than anybody ever dreamed would be in the U.K. in those days.
LIPTAK: Yes, yes indeed.
YUTKIN: You got anymore?
LIPTAK: I think that’s it on my franchise stories. Oh no! I’m sorry. People, we’re talking about people. I do. Well, I think the world of Ben Conroy. He was my mentor for a number of years at the CPI Company. Again, the visionary that created and came up with the idea of The Cable Center and Museum. I would put on the marketing side, I would sort of suggest a trio of people; John Sie, Jerry Maglio and Trygve Myhren, all people who experimented early on with multi-pay products. John’s certainly the exponent of combining HBO and Showtime and Jerry and Trygve were the first cable operators to launch the multi-pay product in Wichita Falls, Texas. They developed it and it strengthened the whole category by bundling them together. And then the last person I just jotted down here, and I’m sure I’m missing a lot of people, is Leo Hindery. Leo brought this industry out of the depths of Wall Street’s despair a number of years ago.
YUTKIN: Not so many, just a few.
LIPTAK: Not so many years ago, and brought it back through the force of his management style and personality and Leo did a great job in my opinion.
YUTKIN: He kind of saved it at a critical time. We should say that this is being recorded in November of 1999; it’s not a secret, just prior to the millennium.
LIPTAK: At a time when Mr. Hindery has left AT&T and we’re all waiting and watching the trade press to see where he lands, if anywhere.
YUTKIN: Oh, he’ll land I’m sure.
LIPTAK: He’ll land, I’m sure he doesn’t have to land anywhere but he probably will.
YUTKIN: Again, like so many of the pioneers, I can’t see him sitting back in a rocking chair.
LIPTAK: Indeed not.
YUTKIN: One of the pioneers and probably one of the most controversial people, who also had a significant impact on the industry, was the late Irving Kahn, who was the head of TelePrompTer.
LIPTAK: TelePrompTer, yes.
YUTKIN: Did you know him and tell us about your experience.
LIPTAK: I did know Irv Kahn. I mean, not well, I was a young kid at the time and he clearly is a controversial character. I remember him fondly in the respect that he was building a major company, he had some good people that were associated with him; Hank Simons, Les Read, people like that.
YUTKIN: Monte Rifkin?
LIPTAK: Monte Rifkin, yes, and Leonard Tow and I remember a number of speeches that he gave at various industry events, one of which is, we have to deliver on the promise of cable. That we can’t make these promises to these communities without delivering, we’ve got to deliver quality customer service, we have to serve the communities, and I’ve always had a lot of respect for the positions he took.
YUTKIN: When was that, roughly? Was that during the franchising period, or earlier?
LIPTAK: I think it was actually a little earlier than that. Certainly before he went to the pokey.
YUTKIN: And he used to joke about that afterwards. He had a great sense of humor. I only met him once. He was very self confident, had strong opinions and I guess, generated a lot of controversy in terms of the man, but he certainly was one of the most influential people in the industry.
LIPTAK: He was a very colorful character. Short, rotund, smoked cigars and he was a drum major at the University of Alabama. That image of Irv Kahn as a drum major, I could never quite put that together.
YUTKIN: And he wasn’t small then, he wasn’t that small.
LIPTAK: No, he wasn’t small then either.
YUTKIN: Let me go back to something a little bit more serious. We said you graduated from the University of Illinois in both marketing and business. We’ve known each other probably fifteen years or so, and I know you primarily as an ops person, as an operations person. A lot of people in this industry think of you as the consummate marketing person. Well, I think of you as a consummate ops person, other people think of you as a consummate marketing person. How did that come to pass? That’s unusual for one person to be successful in both areas that are somewhat different.
LIPTAK: Gerry, I never thought of it in those terms. To me, the mission of the cable television operator is a single mission and that is to build a good plant, to market it properly, to install it correctly, to deliver good services, to bill people properly, to take care of their customer service issues. To me, it’s a continuum of one thing and if at any point in the process, something stumbles, then the end is never achieved. So I never thought that I was making a major career move when I went from operations to marketing because it was sort of the same thing. And maybe it was because at United Cable, we were building cable systems in very difficult, competitive markets, where marketing was so important. In the early days of the business, who needed marketing? You’d build a cable system in a community, you’d hire the armory, you’d bring in a sports figure or a Hollywood celebrity, get all the TV dealers and in the space of a weekend, 40% of the people would sign up for cable. So who needed marketers? When I entered the industry as a marketer, there were four of us as full time marketers in the cable television industry.
YUTKIN: Who was that, do you remember?
LIPTAK: Well, there was Dave Webber from Jerrold, myself and two other people who I don’t recall, but I remember at the time there were only four of us. But when cable started to move then into these big urban markets where no penetration was guaranteed, where you had to fight for customers, then the marketing challenge changed a lot. The marketer had to make sure that the plant was built correctly, that subscribers were installed properly, that the pictures were good, that the billing wasn’t screwed up, that the programming was good. So to me it was all one in the same and at United Cable, I remember in a couple of the early systems we built, we had problems in one aspect or another and I complained and would get involved with the engineers, get involved with this department, that department. Finally, Schneider says, you’ve got the whole thing, because you know what that consumer wants and so you’ve got it. So don’t screw it up.
YUTKIN: But now, were you primarily marketing or ops at Times Mirror?
LIPTAK: Primarily operations, but marketing and programming reported to me, so I was involved.
YUTKIN: But operations really is more concerned with line and bottom line responsibilities and generally speaking marketing has its own goals, but it’s more a staff and the marketing people have, in my experience, a somewhat different philosophy and concern about the bottom line.
LIPTAK: To me it’s all one objective and we’ve seen many cases where indeed the marketing people do have a different objective and I would say to you that when they have a different objective, the bottom line, the overall goal is not being served. I’ve seen that happen at several MSO’s too, as you have.
YUTKIN: I’ve read some of your speeches over the years.
YUTKIN: And there are some areas that you seem to speak out on perhaps earlier than other people did. One of them was quality customer service. Was that a reaction or was that an insight or was it just Greg being Greg?
LIPTAK: Well, to me it was just good business and probably because I had seen some lousy customer service in cable and I knew from my marketing perspective that you can’t build an industry if you’re not delivering quality customer service and so we had to figure out a way to do that.
YUTKIN: And what do you think the key elements to that are? Is that an unfair question?
LIPTAK: No, not at all.
YUTKIN: I know it’s been almost institutionalized right now and there are guidelines and codes that must be adhered to, but what was missing at the core that is now pretty much common among most cable operators?
LIPTAK: Well, you know, starting with the basics in the early days, we had equipment that didn’t work.
YUTKIN: That’s a problem.
LIPTAK: I remember in Tulsa, Gerry, we had the first version of a 36 channel converter built in Taiwan. The company that built it shall remain nameless, but we started installing these things and we had 16,000 of them installed and I remember the technician or the chief engineer of the cable system coming in and saying, “We’ve got a problem. They’re drifting.” We said, “That’s a new term, what does that mean?” He said, “Well, the signals are drifting, it means they’re going off channel.” And I said, “What does that really mean?” He says, “People don’t have any television to watch.” That’s a basic problem! So we had to get engineers and a team in and replace 16,000 units – no mean feat. So we had converters that didn’t work, we had amplifiers that would do strange things – when it got cold, they’d go out, when it got hot, they’d go out. So, step number one, we had to have a reliable distribution system and today we accept that but as you know, that often wasn’t the case. We had major manufacturers in the business that would dream up a concept for new equipment, sell it to everybody, then they’d design and build it and it often wouldn’t work. So point number one is, well you’ve got to have the darn system that works. And then once you’ve got that, then you’ve got to sell it properly to people. That was a new experience for cable in the early days because you didn’t have to sell it, you took orders. Suddenly in these urban markets, you had to sell it. So you had to figure out, how do you do that? Direct mail, door to door, newspaper, radio, TV, a whole process had to be established there and then you had to install correctly. This is Abel Cable.
YUTKIN: The first icon.
LIPTAK: The first icon of the cable industry. I’m not sure how old this is, it’s 30 years old, at least, perhaps 40, perhaps 35, I’m not sure. At the time, the electric industry association in America had a symbol called Ready Kilowatt. Do you remember that?
YUTKIN: No, I don’t.
LIPTAK: Abel Cable was a direct steal, in my judgment, of Ready Kilowatt. But I have to tell you, literally two months ago, I was at a small town cable system and I went into a restaurant for breakfast and on the menu was a little ad for the cable company with Abel Cable on it.
YUTKIN: Abel Cable still lives.
LIPTAK: I thought, oh my gosh.
YUTKIN: I guess that’s not copywritten. Who created it, do you know?
LIPTAK: I think it was created by the trade association that was the predecessor to the NCTA. It had a little different name, but it was copywrited. So marketing, home marketing, was a big issue and then all of the questions of installing people properly. Being at their home when you said you’re going to be there. How simple that sounds, but how badly we did that in some of the early days for a variety of reasons. Dirt on the floor, and so on.
YUTKIN: Well, a lot of operations were run on a shoestring.
YUTKIN: And the rates were low and they were regulated pretty severely, particularly in some small towns.
LIPTAK: One of my favorite installation stories occurred down in a place called Tyler, Texas at United Cable, a great cable system United had and one day we got this panic call at the corporate office about a serious installation problem in Tyler. It seemed that our installer was installing the cable from the exterior of the home at the nine foot, eight foot level or something, into a living room or a family room and I don’t know what he did, but he drilled right through the wall, the lady of the home was there, she had this painting of her grandfather, who was a Civil War general and the drill bit went through his eye. Well, that went to Mr. Schneider on that one, it cost us $5,000, we had to send the painting to an art restorer in New York, the lady fainted, we had to get an ambulance.
YUTKIN: It wasn’t funny then?
LIPTAK: It wasn’t funny then, but in retrospect… So, installation issues, big issues.
YUTKIN: That’s a great story. I hadn’t heard that. What about the office issues and billing? What we call backroom now.
LIPTAK: Oh, yeah. Often very primitive…
YUTKIN: Coupon books?
LIPTAK: Oh, yeah, coupon books! They were great, weren’t they? Coupon books you’d send out to people, right. And then we got into computer billing and had a lot of missteps in computer billings. In fact, today I’m told same problems but the problems today are very sophisticated, integrating high speed internet and telephone billing and so forth into cable billing. So that’s been a very big challenge for the industry. So I guess you ask what are the issues? It’s all of those and then some and then let alone programming. Do we have good quality programming to offer? What are they? Is some stuff wrong for a market and so forth.
YUTKIN: Let me ask you about that. Do you think that the vast wasteland speech that was given by the FCC chairman, Newton Minow, in 1960, do you think that cable has fulfilled the promise to resolve that?
LIPTAK: Yes, I think in large measure it has. Newt, he’s one of my heroes too, I would have put him on the list. He was one of the great visionaries and got a lot of criticism for the speech from broadcasters, but…
YUTKIN: He said it to the broadcasters.
LIPTAK: To the broadcasters, I think that we in cable look back with great respect for his observation at that time and use that quote a lot in cable development. But yes, I think so. I mean, there was a period of time in cable’s programming development when everybody said all cable is is reruns, but today, there is a great deal of terrific, original material being created and if you look at the viewing statistics of ABC, CBS, NBC and Fox over a fifteen year period, you see that viewership decline and you see cable going like that. Cable, last fall, cable basic services for the first time in the aggregate passed the viewership of those networks. So that was a watershed event for cable.
YUTKIN: Let me ask you about something that I know is near and dear to your heart and that is the formation of CTAM, and you’re the daddy of CTAM, or one of the prime motivating forces of the creation of that entity, which has been very successful in really leading the industry. Did you just wake up one day and say, I think we need a CTAM?
LIPTAK: Here’s what happened. We were starting to launch pay television services by satellite. September 30, 1975 was the launch of HBO on the satellite. Up until that time we had some pay cable on cable systems by videotape, tape playback and in some parts of the country by microwave delivery, particularly in the Northeast. But suddenly, we were faced with the opportunity of this new product line that we were so very excited about. So I was down in the New Orleans cable show in, I think it was April of that year and ran across a couple of cable colleagues. Tom Willett from Continental, David Lewine from the Times Mirror Company and George Sisson from Colony Communications and I said to them, “We really need a forum to discuss how to do this. How do we launch this new animal, pay TV? And maybe more importantly, how do we figure out what not to do,” because what was going on in a couple of these launches was what was called the negative option. Cable operators would put the service on a cable system and then start charging people and then would only take it off their cable if the people said they didn’t want it. Well, several attorneys general in the U.S. came down on those cable operators and said, you can’t do that. So we had to figure out a way of how to properly market cable. So, George Sisson, at that point head of Colony, was a member of the NCTA board of directors, very influential people in the industry, and he said, “This is a great idea. If you’ll organize it, I will help you, I’ll serve as your first secretary or treasurer, one of the two, and I will take it upon myself to keep the NCTA board informed,” because they were very sensitive about any other groups starting in cable. They didn’t like that. And I said, “Terrific, George.” So I came back and then talked to Gail Sermersheim who was a cable marketer with a small company called Telesis Corporation in Indiana. She, too, felt the same way. She agreed to head a steering committee for the formation of CTAM if I would serve as the first president. We called a meeting of CTAM and that meeting was held at the O’Hare Hilton in Chicago and we had about 50 or 60 people, a lot of the leaders that we could identify in this realm.
YUTKIN: Marketing, primarily marketing people?
LIPTAK: Primarily marketing, but a lot of operations people. Chuck Dolan was there, Bill Bresnan, people like that. So we then, from the meeting, all agreed that there should be a more formal organization. And so, my wife helped, we did the mailing for that initial meeting and it was going to cost about $3,000 and I credit my wife, Stevie, for being really the founder of CTAM because I said to her, “You know, hon, this could all be for naught,” we didn’t have a lot of money at that time, money we didn’t have would all go down the drain, we may not get reimbursed a penny, do you think we ought to continue to do this? She said, “Let’s go ahead.” So we did and it turned out that we broke even. I think we made $30, opened up a bank account, put the $30 in it, Gail started the steering committee, I got our lawyer at Communications Properties in Austin to agree to develop the first set of bylaws and handle the filing with the Internal Revenue Service. We had to get declared a not for profit corporation and so we did all that and kicked it off. So that’s how it started.
YUTKIN: And how did NCTA feel about it? You’re not affiliated?
LIPTAK: Not affiliated at all with the NCTA.
YUTKIN: But it’s not competitive.
LIPTAK: It’s not competitive. There were two efforts by the NCTA before the foundation of CTAM to develop marketing groups. There was something called the Young Communicators Society that was started by Marc Nathanson and they held a cocktail party at one of the NCTA’s and then there was actually and NCTA marketing meeting that was held, but somehow we handled that and didn’t have a problem. I was going to call the group CTM, the Cable Television Marketing Society. It was Marc Nathanson who said, “No, no. To get a buy-in in the industry, you have to involve the operations people, so you should call it the Cable Television Administration and Marketing Society.” So that’s how CTAM came about.
YUTKIN: Okay. And then tell us about the Cable TV Ad Bureau.
LIPTAK: Well, a few years later, one of the board members of CTAM was a fellow by the name of Bill Ryan from Florida. Bill had a radio broadcasting background before getting into cable.
YUTKIN: That was about the late ’80’s or early ’80’s?
LIPTAK: Early ’80’s, actually probably late ’70’s, Gerry, or early ’80’s. Bill started selling advertising on his local cable system down in Florida, Naples I think. He then came to CTAM and said, “We really need an organization in the advertising arena just like CTAM is in the marketing arena in order to really develop the advertising revenue stream. We’ve got to have the professionals in that field willing to work together and exchange ideas.” So CTAM funded the start of the CAB and I think it was in 1979 or 1980 where a grant of $300,000-$400,000 to get CAB going. And we then went out under Bill’s leadership and search for and found Bob Alter, a veteran of the radio advertising bureau, as the first head of CAB. And so Bob came aboard and then CAB immediately then became its own not for profit organization and set up its own structure and went from there.
YUTKIN: And you brought a little souvenir along with you.
LIPTAK: Yes, I did. The development of local advertising on cable always held great promise. I can remember a time when it was 0% of a cable operator’s revenues. Today, in 1999, it’s somewhere around 9% of a cable operator’s revenues and at the local level that’s 2 ½ billion dollars and then at the local and national levels, it’s over 10 billion.
YUTKIN: Is that a telescope?
LIPTAK: This is a telescope from the CAB board in 1989 and it says “On the horizon, 4 million dollars, CAB board of directors 1989.” We thought, oh my gosh, if we could get to 4 million dollars, we will really have created a terrific business and so on.
YUTKIN: And now?
LIPTAK: And now it’s over ten! Over ten at the network level and a couple of billion at the local level and continues to grow and become very, very important.
YUTKIN: That’s terrific!
LIPTAK: A lot of things spurred it. I have a whole bookcase in my house that has all of these cable memorabilia. Floor to ceiling, six to eight feet, I hate to tell you my wife calls it my cable crap. She’d like to get rid of it, it gets very dusty but I’m going to give some of it to the Museum. This is a ring, look at this thing!
YUTKIN: That’s a big ring!
LIPTAK: This is a big ring. It’s from ESPN in 1987 when they first launched the NFL carriage and that was a big important event for cable, too, the first NFL carriage on cable. So that’s a little memento from our friends at ESPN, which I think is now one of the most profitable communications enterprises in the world. I know it’s more profitable than its parent ABC television network.
YUTKIN: Well, they have a good product.
LIPTAK: They have a great product!
YUTKIN: It’s been a long time and we’ve come a long way from radio for you to television news, production, sweeping floors, to getting into cable as kind of an afterthought, not an afterthought, but because you heard of something. You’ve known a lot of people, marketing, operations, now you’re into the future with your new company that we hope will be successful in the new decade that’s starting. Where do you see the industry maybe ten or twenty years from now? I didn’t tell you about that before because maybe it’s unfair but I just wanted to get your off the cuff remarks.
LIPTAK: Oh boy. I see a single communications pipeline into the home and perhaps delivered by several companies, but a single pipe that’s going to deliver television, high speed internet, all the internet connectivity.
LIPTAK: Oh, no question about telephony and I don’t know what other services it will provide but it’s going to be a package product in my opinion. The company that wins, and I think AT&T is on the right track here, the company that puts it all together in the Dolan idea, the packaged idea, delivering a value of products, terrific value, all together in one package, a simple installation, a single billing, a single customer service, is going to be the winner.
YUTKIN: How long do you think that’s going to take?
LIPTAK: Oh, it’s going to take ten years, or more. It always seems like it takes an excruciatingly long time to do this. AT&T announced just a few days ago they now have eight markets where they’ve got telephony going. Well, how long is it going to take just to do that in the AT&T Company, let alone the rest of the cable industry. It’s going to take a long time. A long, long time.
YUTKIN: Thank you very much. It’s been a pleasure talking with you. I’ve enjoyed it. I think the flavor of the industry has come through in this meeting. I appreciate it.
LIPTAK: Thank you.
YUTKIN: I would like to thank again the Hauser Foundation for funding the oral video history project of The Cable Center and Museum and we thank you for watching and Greg, thank you very much. It’s been really very wonderful.
LIPTAK: Thank you, Gerry.