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Andrew HeiskellAndrew Heiskell
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Shepley came to me and said, “We've decided we should go to the satellite.” And I said, “How much?” And I believe they said, “Seven and a half million.”


You mean a contract with the RCA satellite?


Yes. I said, “Seven and a half million?! Let me see, how much business do we do now?” Seven-and-a-half million was, I think, more that our volume of business. But, as it turned out, that was the right decision, and we now use I don't know how many satellites to program at the different hours because of the three hour zones in this country. So you have to use a lot of satellite power to cover the field. But HBO has ended up making a hundred million dollars or so annually. It got into troubles in the late 1970s when it made big contracts. It tried to buy exclusive rights to film, and it ended up by over-committing itself on these exclusive contracts. And it assumed that its growth line would go--which had been straight up like a sort of 45 degree angle--would continue forever. Well, just as they bought the rights to all those expensive movies that curve suddenly went absolutely flat, and stayed flat for three, four years. It's now just beginning to come up again.


That satellite decision, which according to newspapers then and after really affected the whole video industry, made it boom. Did you realize at the time what a significant decision that was going to be?

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