Memory Lane - An Impulsive Solution
There’s a meaningful business to be realized by responding to the impulsive decisions of customers.
Some of the signature developments in cable technology are intertwined, oddly enough, with memorable boxing matches. Topping the list, of course, was the 1975 “Thrilla in Manila” between the late Joe Frazier and Muhammad Ali. That historic fight signaled the onset of the satellite communications era for cable and inspired entrepreneurs like Ted Turner to conceive a new framework for launching national TV networks.
But a hyped-up match seven years later also would come to herald a budding romance between cable technology and boxing.
The fight was Cooney-Holmes, a hotly anticipated match between the reigning WBC Heavyweight champion Larry Holmes and a sort of real-life Rocky Balboa named Gerry Cooney. The Irish-American Cooney had rocketed to prominence a year earlier after a stunning knockout of former WBC champ Ken Norton in 54 seconds in a ring at Madison Square Garden. The performance made an instant folk hero out of Cooney, who was tagged boxing’s new “Great White Hope” almost immediately after raising his arms in victory. With promoter Don King getting tremendous advance mileage from the racially sensationalized matchup, Cooney-Holmes was boxing’s most anticipated event in years.
It was that backdrop that helped put cable on the map as a legitimate force in the boxing business, through an emerging delivery technology saddled with the indelicate name of “pay-per-view.” Benefitting from the advance hype, cable companies generated a then-record $10 million in revenue from PPV orders for the fight.
The fans got their money’s worth, as the fight lasted 12 tense rounds before Cooney’s manager called it quits following a vicious right cross from Holmes in the 13th. But the cable industry had taken a beating, too. Even though they had raised the performance bar for PPV, operators realized they had left millions of dollars on the table as late-placed orders went unfulfilled.
Clogged telephone lines were a major culprit. With the hype rising to a pitched level by the evening the fight took place, subscribers who had waited to order couldn’t get through to customer service representatives. The problem, easily identified, was that it took too long to get through a live confirmation with an operator. As a 1985 U.S. patent filing by Zenith Electronics put it, “Too many telephone requests at the same time to the cable operator can cause the telephone central office to ‘crash’ due to excessive requests for physical telephone connections between numerous telephone subscribers and a single cable operator headend station.”
Cable companies had tried to avert a late-hour flooding of phone lines by encouraging subscribers to order early. But they were fighting a losing battle against human nature.
By the mid-1980s, Zenith and others were working on a technology solution. A key component was automated number identification (ANI), a process for using telephone call codes to indicate the caller’s identity and ordering information, without the need for a live conversation. By inputting a series of numbers advertised by a cable operator, a subscriber could send data through the telephone network, indicating not only his/her unique billing identity, but also which PPV program he/she wanted to order. In particular, an offshoot known as “ANI Passing” was promising. By employing unique exchange codes – the first digits of the dialed number – the instructions could be conveyed without a physical connection being made to the cable company, and without overtaxing the phone network.
Various flavors of ANI would go on to help transform cable’s fledgling PPV business from an order-in-advance model to an “impulse PPV” model that would accommodate on-the-spot buying decisions. In turn, a category many had labeled as disappointing began to blossom.
The bridge from a live conversation to an automated identification and transaction fulfillment approach seems hardly worth mentioning in today’s on-demand video environment, where a simple tap on a device ignites a rapid-fire event sequence that produces a live video stream within seconds – no telephone necessary. But in the 1980s, cable was a one-way network, incapable of accepting electronic signals from the home to the headend, and the telephone was the best instrument available for interacting with customers. ANI technology was a temporary solution to a lasting problem, yes. But it proved there was a meaningful business to be realized by responding to the impulsive decisions of customers, who often decided whether to order an event on the spot. In that regard, ANI and PPV were like Gerry Cooney and Larry Holmes on a summer evening in 1982: well-matched.