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Edison vs. Pathé and the Rise of the Movie Rental
Just a few years after cinema made its public debut in 1893, the marketing of home projectors began. Though by 1912 the market was flooded with them, the appeal had been limited. That was about to change. Soon two of the biggest companies in the movie business—one French, one American—went head-to-head, marketing their own home projectors as well as offering films for rent by mail, making them available through pioneering delivery systems. Yet only one of these companies would succeed.


Edison Kinetoscope, 1912-1913, object ID 29.460.14. (THF36602).

Thomas Edison is considered the father of motion pictures. He invented the original movie camera, the kinetograph, which was used to film movies shot at his movie studio, the Black Maria, the foremost of its kind. His lab developed the earliest films in motion picture history, and those movies were exhibited on a peep hole-like device, the kinetoscope—yet another Edison creation. On November 30th, 1897, Edison’s Projecting Kinetoscope was used to show movies on a screen in a commercial setting for the first time. In December 1903, the Edison Manufacturing Company released The Great Train Robbery, which would go on to be the initial motion picture blockbuster. The film industry would prove to be successful, yet rocky, for Edison over the next few years, but in 1912, the year his company launched the Home Projecting Kinetoscope, optimism was in the air.

Details of the new Edison Home Kinetoscope were announced in the magazine "Edison Works Monthly," Vol. 1, No. 2, October 1912, object ID 84.1.1630.9, page 11. (THF112041)

Charles Pathé, previously a phonograph importer, established the French company Pathé Frères in 1896. In 1902, the company introduced an improved movie camera, and soon it would become the leading model used in filming movies across Europe and America. The same year, they began shooting their own productions—completing them at a very fast clip—and distributing them, as well. They would soon dominate the European industry, so much so that Pathé Frères had few serious rivals. The Pathé K-O-K home projector was launched in 1912 in Europe, and the following year they introduced the device in the United States under a different name: the Pathescope. It was in this environment that home projectors finally became a product that the public could get behind.

The Pathescope and the Home Projecting Kinetoscope (also known as the “Home P.K.”) were similar products in many ways, yet had distinct differences. Both Edison and Pathé produced their own unique film size, which meant the films they rented out could be played only on their respective projectors. The companies also introduced a non-flammable film stock—a positive development in the minds of the general public—thus playing a major role in the appeal of the projectors to homeowners. The cost of the machines differed significantly, with Edison’s Home P.K. selling in the $75-$100 range (roughly $1,770-$2,360 in 2013 dollars), while the budget-priced Pathescope would set one back set one back $150 (about $3,540 today). Pathe's premium offering was priced at $250 (a whopping $5,900 in today’s dollars), making it far and away the priciest home projector available.

Details on Edison's motion picture rental plan also appeared in the same edition of "Edison Works Monthly," page 12. (THF112042).


Kinetoscope Film "Professor and the New Hat," Thomas A. Edison Co., 1913, object ID 63.85.3.

The fact that the companies offered movies for rent was also of considerable appeal to consumers, as was the system of home delivery by mail. In order to accomplish this, both Edison and Pathé established “exchange” hubs to ship and receive their films. Owners of the Home P.K. initially had to purchase a film, which ran in the $2.50 to $20 range ($59-$472 if priced today), and then pay an exchange fee of $0.30-$1 ($7-24 in 2013) when swapping one movie for another. Pathé’s method differed, as Pathescope owners instead paid a yearly subscription of $50-$100 ($1,180-$2,360 today), fees based on how many movies were rented at a time. Edison offered 50 films at launch, a number that grew to 160 by 1914; Pathé had 700 films by that time—a momentous disparity.

Due to a number of factors, including that it was notoriously difficult to operate, the Home P.K. never caught on. Edison’s company manufactured 4,600 projectors, but in the end sold just 500 (more than 8,000 Pathescopes had been sold at that point). Pathé Frères had a huge advantage not only in the number of titles available, but because their projectors were superior. It seems quality and quantity was just too much for Edison, and the Home Projecting Kinetoscope was retired in 1914.

Fast forward to the home video era: 1972 marked the year films became available on videocassette to rent, but it would take the arrival of the DVD format in 1997 before an entity had great success with home delivery of movie rentals. That same year, a new company called Netflix was founded. Their concept of offering films for rent by mail seemed revolutionary, and for modern America it most certainly was an innovative (and appealing) model. It was also an idea whose time had come—again.

Bart Bealmear is a research support specialist in the Archives & Library at The Henry Ford.

Bibliography

 

Edison, movies, TV

It is amazing how the roots of innovation can be essentially lost over time. Technological advancements now arrive at such a staggering rate that the gadgets of the past—that very ones that led us to the present—are forgotten and virtually unknown. Phonevision is one such invention.

Developed by the Zenith Radio Corporation and its founder/president, Eugene McDonald Jr., Phonevision was the first pay television service the world had ever seen. As early as 1931 the company had looked into the idea of subscription television, believing that many stations couldn’t survive on advertising dollars alone. In July 1947, Zenith announced the Phonevision system, which would allow films, Broadway plays, sporting events and other special programming to be broadcast in the home—commercial free. Homeowners with a special receiver/unscrambling device connected to their television set would select from a list of available content and then call Zenith to request the program they wanted to see, which would then be transmitted at designated times via telephone lines into the receiver. A $1 charge, per program, would be added to the homeowner’s monthly phone bill.

In these early years of television, McDonald theorized that TV and the advertising industry were caught up in a “vicious triangle,” where advertisers wouldn’t spend money without a large audience, but large audiences wouldn’t watch without quality entertainment, and the private companies that owned stations didn’t have the money to pay for such programming. McDonald—an interesting figure, who could be described as part Steve Jobs, part P.T. Barnum—believed his pay-as-you-see model wouldn’t just benefit the television industry and consumers, but would also “save the film industry financially unless someone fumbles the ball.” Not one for false modesty, he was fond of quoting a friend’s prediction: “The American family, put on the road by Henry Ford, will be brought back home by Gene McDonald.”

The biggest obstacle facing Zenith was the reluctance of the film companies to license their product. The movie studios didn’t want to upset theater owners and they were bound by contract to keep music from films off of TV. To negotiate with the movie studios, Zenith hired an IRS collector by the name of James P. Finnegan. He was so convincing that the studios not only relented, they didn’t charge Zenith a dime. Mr. Finnegan was later indicted by a federal grand jury for various misdeeds.

United States Patent for Subscription Television Decoder Unit, issued June 27, 1961, object ID 90.1.1746.25, from Mel Boldt and Associates records.

In 1949, Zenith received authorization from the Federal Communications Commission (FCC) to test its service, and would begin the experiment the following year in Chicago, with three hundred households signing up to try Phonevision.

Subscription television made its global debut on May 1, 1950, with the tryout lasting ninety days. “It was successful far beyond our expectations,” McDonald declared, while the Theater Owners of America—somewhat unsurprisingly—had a conflicting opinion, and proclaimed Phonevision “a monumental flop.” According to Zenith’s numbers, Chicago families had viewed films 1.73 times a week, which was almost four times the average movie-going rate over the same period (McDonald, exaggerating somewhat, claimed it was thirty-three times the average). Even though all the films aired during the test were over two years old, 92% of those who used the subscription service said they would rather watch from home than go to the movies. It appeared theater owners were in trouble and Phonevision was on its way to sweeping the nation.

More testing was conducted during the spring of 1954 on WOR in New York City. This time airborne signals were used instead of phone lines (the public wasn’t involved). The results were overwhelmingly positive, proving the system worked even in densely populated areas with tall buildings, resulting in a change to an “over-the-air” transmitter set-up (though the name Phonevision could have been considered obsolete at this point, Zenith stuck with it). The company had also developed different means to watch programming. One way was via a coin box decoder, while another device would unscramble the picture after the viewer entered the correct combination.

In this design, a coin slot is built in to the left-hand side of the decoder. United States Patent for Subscription Television Decoder with Coin Slot, issued June 27, 1961, object ID 90.1.1746.23, from Mel Boldt and Associates records

In the fall of 1954, ABC passed on airing a television ad for the service, and in April the following year CBS followed suit, stating, “Phonevision is not a product, it’s a controversial issue.” Zenith was not amused, charging CBS with “arbitrary and unwarranted censorship.” In May, the go-ahead was given for a month of testing on WMAL in Washington, DC, so Zenith could audition Phonevision at a broadcasters’ convention, as well as for the FCC and Congress, with fifty systems installed in the capitol building (the company was still attempting to secure the all-important FCC approval of Phonevision as a broadcast service). In June, Zenith licensed Phonevision to the United Kingdom, Ireland, and the Channel Islands, having inked a similar deal for the Australian and New Zealand markets the previous year.

Eugene McDonald Jr. passed away in 1958, but Zenith’s belief in Phonevision was unwavering, and by 1961 the company had invested millions refining their subscription television system. Yet the jury was still out at the FCC.

United States Patent for Subscription Television Decoder Unit, issued June 27, 1961, object ID 90.1.1746.24, from Mel Boldt and Associates records.

The company’s next test, in collaboration with RKO General, would take place in Hartford, Connecticut. Beginning June 29, 1962, UHF station WHCT would continue to broadcast commercial television during the day, but switch to Phonevision programming in the evening. By 1964, Zenith began to have doubts about the service, and though the Hartford test lasted until January 31, 1969, they never obtained the subscriber numbers needed.

Come April 1969, word was that FCC approval was imminent, and while Zenith was still optimistic about its product, it was cautiously so. By the time the FCC made its decision in 1970, finally giving pay television the green light, Phonevision was no more. Part of its downfall could be attributed to the fact that programming was still only viewable in black and white.

Over-the-air systems reappeared for a period beginning in 1977 (ON-TV, an example of what was available in the Detroit market, broadcast films via WXON in the evening hours), but ultimately lost out to cable television. Pay-per-view TV, which took hold in the early 1980s, can be traced to Zenith’s service, as can the very idea of purchasing commercial-free content for home viewing. Today, movies and television shows can be downloaded via Amazon and iTunes and watched on devices like Roku and Apple TV, while untold hours of media can be streamed on Netflix and other services that offer “on demand” content—without commercial interruption. While it is also possible to view said content on mobile devices—far from our television sets—in a sense, Eugene McDonald Jr. has finally brought us all back home.

Zenith "Phonevision" Subscription Television Decoder Unit with Control Panel Open, 1958, object ID 90.1.1746.21, from Mel Boldt and Associates records.

Nearly a decade after his death, Mr. McDonald was inducted into the Broadcast Pioneers Hall of Fame, for, among other accomplishments, his role in the development of subscription television. The service he so passionately promoted ultimately failed, but the concept has proved incredibly successful. Though Phonevision is now largely forgotten, it was the true beginning of pay TV.

Bart Bealmear is a reading room assistant in the Archives & Library at The Henry Ford.

Resources

Hallowell, Mary Louise. The Cable/Broadband Communications Book, 1977-1978, Communications Press, 1977.

Mullen, Megan. The Rise of Cable Programming in the United States, University of Texas Press, 2003. More here.

Segrave, Kerry. Movies at Home: How Hollywood Came to Television, McFarland & Company, Inc., 1999.

Sterling, Christopher H. Biographical Dictionary of Radio, Routledge, 2011.

The Zenith Story: A History from 1919, Zenith Radio Corporation, 1955.

“Phonevision,” Life, February 5, 1951. More here.

“Proposed Phone-Television System,” Popular Mechanics, October 1947.

Various Time articles, 1947-1964.

Various New York Times articles, 1955-1969.

movies, TVs