Between 1945 and 1960 the number of television sets in use in the United States rose from a few thousand to approximately 60 million. Although many of the programs shown originated in New York City, many of Gotham’s denizens had to endure a steadily degrading signal reception. The cause: new buildings in the vertically growing city that either obscured or reflected the over-the-air signals, resulting in blurred, speared or distorted picture. One resident, living on the Upper West Side in the “BC” (Before Cable) days, described the experience of watching television was “like going sightseeing in a heavy fog.” One of the solutions to the problem was to build a Community Antenna Television (CATV) system. This entailed installing a master antenna at a favorable location and then running coaxial cable from the antenna into individual homes, ensuring that there was no interference with the signal.
Cable television in New York began in 1962. That year Sterling Information Services, a subsidiary of Sterling Movies USA (later renamed Sterling Communications, Inc.), built a television studio and installed a coaxial cable system, connecting it via the existing ducts of the Empire City Subway Company to various hotels in Manhattan. The system provided information to tourists and other out of town guests, serving to advertise the various events and attractions New York had to offer. The service was especially useful during the 1964-1965 New York World’s Fair, which served to encourage adaptation of similar systems in other major cities.
This initial success led to Sterling’s application to provide residential CATV services throughout Manhattan. In 1965 the Board of Estimate granted a franchise to three companies to go ahead with the scheme, splitting Manhattan in two between Sterling and TelePrompter (the third company, CATV Enterprises Inc., received a franchise for the Riverdale section of the Bronx). Under the granted authorization, the three companies had the rights to use the streets of the City to operate their systems while New York maintained control of rates and of performance standards. In addition, the City also received a percentage of the monthly charges paid by subscribers. The area of Manhattan Cable Television, a subsidiary created by Sterling, extended from 86th Street on the East side and 79th Street on the West side, all the way to the Battery.
Wiring the city was an expensive undertaking. By mid-1967 Sterling had spent approximately 2 million dollars to wire only 34 blocks while serving only 400 subscribers. To finance this costly operation the company required investors and Time Inc. obliged, pouring millions of dollars into Sterling.
The potential of the new field soon attracted other competitors; for instance Bell Telephone Company began offering their own cable service around Manhattan. Sterling and TelePrompter, the two authorized franchisees, protested, leading to legal action against Bell by the City. New Yorkers however embraced the competition, attempting to procure better deals. Sterling kept an active lookout for Bell’s infringements on its territory, in one case noting that their competitor was using the construction of the World Trade Center in their attempt to garner more customers on the Upper West Side.
To combat this increasing competition, Charles F. Dolan, the head of Sterling, had a plan to offer a unique service to his subscribers. At this time home sports games were not televised in New York, leaving those without a ticket unable to see the action firsthand. Dolan began to actively negotiate to secure the rights to televise home games on Sterling Manhattan Cable, leading to an influx of new subscribers who tuned in to watch home games of the Rangers and the Knicks. Following a deal made with Madison Square Garden, Dolan stated:
“In the future of professional and amateur sports, we see the development of cable television becoming, in effect, a way to enlarge the seating capacity of New York arenas and stadiums. The economics of cable television will permit teams to telecast home games to fans who either can’t get a ticket or can’t attend every game. … We hope that MSG’s decision to ‘go cable tv’ in 1969-1970 will be recognized as proof that the new medium of cable television is well on its way to making the television set a more versatile and significant instrument in the home.”
In 1973, even with the increasing subscription base, Manhattan Cable Television and its parent company, Sterling Communications, were still struggling. A recently lunched pay cable channel called Home Box Office (HBO) looked promising but it would be years before that channel grew to the heights of success it enjoys today. By this time the continuous infusion of Time Inc. funding had made that company a majority stakeholder, leading Time Inc. to take over Sterling, buying out the remaining investors and dissolving the parent company. Sterling Manhattan Cable became a wholly owned subsidiary of Time Inc., continuing to provide cable service to New Yorkers, eventually morphing into Time Warner Cable.
With New York City slowly descending into what would become the fiscal crisis in the mid-1970s, Sterling Manhattan Cable advertised the fact the while many of the things in the City did not work anymore, cable could be countered on as being a pleasant retreat from everyday stresses.