On December 1, 1977, the world's first commercial interactive TV service opened for business in Columbus, Ohio. Initially operated out of a remodeled appliance store, Qube was a joint project financed by Warner Communications (a division of Warner Bros.) and American Express. It offered an unprecedented 30 channels of television divided equally between ten broadcast TV channels, ten premium or pay-per-view channels, and ten channels with original interactive programming.
Cable television initially started out serving only rural markets, those that were not big enough for the major networks to come out and broadcast to them. Realizing that servicing small, rural communities wasn’t too good on their profit margin, cable companies began to penetrate urban areas. Steve Ross, the president of Warner, was staying in Tokyo in 1975 and became fascinated with the closed circuit TV system in his hotel, which had some interactive aspects to it. The hotel system had been designed by Pioneer, so he asked them to develop a similar system for the United States.
The Warners cable plant in Columbus was being upgraded at the time, so it seemed like the perfect place to be a test market for the new system. Not only was it a college town full of people interested in new technology, but it also would give them an idea of how the new system would play in “Middle America.”
Each set-top box was assigned a specific digital address (much like today’s IP addresses). Data traffic on the 8-bit system traveled downstream and upstream between the headend and each set-top box at 256 Kbps. The downstream bandwidth at 250 MHz (within the EM spectrum from 50 to 300 MHz) featured a single 6 MHz data carrier channel centered at 121 MHz, like the core thread in a rope. The remaining 244 MHz of downstream bandwidth transported 30 video channels and 30 audio channels, including 10 Columbus FM radio stations (regenerated from off-air reception of tower broadcasts). Upstream responses from the polled set-tops were returned to the head end at 256 Kbps within a 24 MHz carrier signal. The network used bandwidth very efficiently, all of the 50,000 boxes in Columbus could be polled in six seconds.
The poll-able boxes allowed Qube to be the first cable service to offer pay-per-view movies and sports events. It also held community auctions where items were sold live by an auctioneer in the studio, each incremental bid made through the remote. The bids were locked in by constantly polling the network of boxes. The interactive programming also included a live semi-pro football game in which viewers chose the plays; on-line polling; shopping by TV and interactive TV video games. All of this was done through the use of Qube’s proprietary 18-button remote control. Qube pioneered the use of music video clips, especially with a show called “Sight and Sound” that invited viewers to select among sets of five rock-and-roll artists, their performances coming from concert footage, promotional pieces from record labels, film clips, and broadcast TV appearances. The success of this channel led to the birth of MTV. Qube also offered specialized children's programs, which eventually begat Nickelodeon.
All of the technology and original programming necessary to keep Qube afloat ended up costing Warner Bros. barrels of cash. It also didn’t help that Warners had just bought Atari, which was quickly becoming a monetary sinkhole. Vast amount of capital was needed to create new Qube systems in other cities such as Houston, Chicago, Dallas and Cincinnati, so in 1980 Warners signed a deal with American Express to partner on the new systems. They also sold MTV and Nickelodeon to Viacom for $685 million. Despite all of this cash flow, the new cities were never really able get off the ground. In 1984, American Express pulled its support and all of the Qube systems were shut down.
In the end, Qube was a success with the people who got to see it and with the new ideas it brought to the cable industry. It was just that the costs were so big that even one of the worlds biggest media companies couldn’t handle the load.