Interview Date: Wednesday June 06, 1990
Interview Location: New York, NY
Interviewer: E. Stratford Smith
Collection: Penn State Collection
Note: Audio Only
SMITH: This is Tape 1, Side A of the oral history interview with J. Richard Munro, recently retired co-chairman and co-chief executive officer of Time Warner Inc., now the world's largest media and entertainment company. This interview is part of an oral histories program being taken of pioneers of the cable television industry and current leaders under the auspices of The National Cable Television Center and Museum at The Pennsylvania State University. The purpose of the series is to establish a national archive for research purposes concerning cable communications.
Mr. Munro, I would appreciate it if you would be willing to answer some questions concerning your personal background for the record.
MUNRO: I would be delighted to.
SMITH: Could you tell me where you were born and when and something of your boyhood background?
MUNRO: Sure. I was born in upstate New York in Syracuse, January 26th of 1931. I think I grew up as a normal child with an older sister and a younger brother. My parents were divorced when I was only five years old, but I don't think that had a negative effect on my childhood at all. My family's history was farming primarily and land owners in central New York. My mother came from a family with a show business background. My grandfather was a Gilbert and Sullivan star. My grandmother was a chorus girl. My mother actually sang on Broadway. My father's side, as I said, were basically farmers, politicians, doctors, lawyers, etc., in central New York.
SMITH: Your father's side was of Scottish background did you say?
MUNRO: Yes. I guess the Munro clan came over from Scotland around the early 1700s, fought in the revolution and were given land in central New York as were all soldiers who fought in the revolution. That was the beginning basically of my family history back in the early 1700s in the area surrounding Syracuse.
SMITH: Your mother's ethnic and national background?
MUNRO: My mother's mother's family were German immigrants. As a matter of fact, my grandmother spoke German fluently and was quite proud of her German heritage as I recall. That goes back a long time. I knew my grandmother quite well. My grandfather, I did not know quite as well on that side of the family. When my parents were divorced, I went to live with my mother, so I sort of left the Munro side of the family at that stage of my life. The Munro side of my family has a much richer history which I have recently been learning something about.
SMITH: Could you just briefly tell us the nature of that history? I don't want to push into too much detail.
MUNRO: Well, it just was recently. The Munro's have a family historian, and I have recently been made aware of some of the history. I read in one document that at the Battle of Lexington, there were something like ninety American soldiers and something like twenty of those were Munro's. So there were a lot of Munroe back in the early days of Massachusetts. I guess every Munro will tell you that he is a descendant of our President, and I have been told that. Whether it is true or not, I don't have the faintest idea. But, it sounds nice.
SMITH: You don't spell it the same way do you?
MUNRO: No, but if you go back and track the Munro history, we are all related no matter how we spell it. It is spelled a number of different ways. My spelling, M-U-N-R-O, is sort of the purest of the spellings. But, it goes back to Manro and, of course, Monroe and Monro. There are a whole bunch of different spellings. But somehow or other, we are all intertwined. I have never paid an awful lot of attention to my ancestry, though I must admit as I said a moment ago, Strat, it is kind of interesting.
SMITH: You mentioned earlier that you have some brothers and sisters.
MUNRO: My younger brother is four years my junior--a wonderful human being and someone who is probably my best friend. He lives in West Palm Beach, Florida. He has made his life in the outdoors. He works for a fishing line company, a boat company. He is a very, very fine outdoor photographer and has had his pictures in many magazines. He is a writer for a number of boating books. He has been able to be one of those fortunate people who has made his vocation out of his avocation. He is a wonderful fellow. My sister also lives in West Palm Beach. I don't see her quite as often as my brother, but I am blessed with having a wonderful brother and a wonderful sister.
SMITH: Where was your early schooling?
MUNRO: I went to public schools in upstate New York in a suburb of Syracuse, Skaneateles to be specific. It is a small village outside of Syracuse, New York, on one of the finger lakes. A beautiful village, as a matter of fact, somewhat unchanged since my childhood. When my mother took us to Florida during the winters, I went to junior high school and high school in West Palm Beach, Florida, and graduated from West Palm Beach High School. But, I had a year of prep school at Northfield Mount Herman in Massachusetts. I went there for a year and then went back to West Palm Beach High School. That is where I completed my high school education. Then I went off to the Marine Corps, and came back and went to Colgate University in upstate New York, where all of my Munro ancestors had gone.
SMITH: I think I read in an article recently that you were the twenty-eighth Munro to go to Colgate. Is that the right figure?
MUNRO: I think it was twenty-sixth or twenty-seventh. We lost track. I assume that is the only school my ancestors ever heard of because I told that story once to someone and they said, "Well, that's got to be the greatest line of mediocrity I have ever heard. No Munro could get into Yale." I think my great grandfather was first lay trustee of Colgate, Colgate being a religious school back then in 1820. The school was founded in 1819, and my great great grandfather was a trustee in 1820. There have been four Munros that have been trustees of Colgate University going back to the 1820s. So, we have a long and rich history in that little school.
SMITH: While we are on the subject of school, what was your undergraduate specialty? What did you graduate in?
MUNRO: I had two majors, English and psychology. I was a liberal arts graduate, that's all that Colgate offered. But like many people here at Time Warner, most are liberal arts graduates.
SMITH: You mentioned your military career just briefly a few minutes ago. Would you mind telling us just a little bit more about that?
MUNRO: Well, I had a year of prep school, as I mentioned. So, I graduated from high school when I was nineteen and that was during the Korean War. I was about to be drafted during that period, and I decided instead of being drafted I'd rather join the Marine Corps. So, I went into the Marine Corps as an enlisted man, spent three years in the Marine Corps, two at Paris Island as a rifle instructor. Then, I went to Korea. In Korea, I was with the 5th Marines. I happened to be at the wrong place at the wrong time, and I ended up getting wounded three times, and ended up being 30 percent disabled. I certainly don't appear to be 30 percent disabled. Over the last, I think, thirty-five or forty years, I have been getting checks from the Veterans Administration. My feet were badly hurt. They were injured by a grenade that went off at my feet. I spent about a year in a Navy hospital. I was discharged, I think, in 1953, and went back to college. But, I am no war hero. I just happened to have been shot up a few times. I didn't learn to duck, I guess.
SMITH: Would you identify the particular engagement that was involved?
MUNRO: Well, I was in Korea during the State Hera conflict, where the North Koreans had a trench about 500 yards away from where we had a trench. Every night, we would go out that 500 yards and try to find them, and they were out there trying to find us. It was a crazy sort of a war. But, it was uneventful other than that I got hurt fairly badly.
SMITH: That's eventful enough, I would say. When you got out of the service, you went to Colgate. After graduating from Colgate, what was the next step in your career?
MUNRO: Having been a veteran, I was twenty-six when I graduated from Colgate. I'd been quite involved at Colgate. I had been president of my fraternity and the interfraternity council, and kind of a leader on the campus primarily because of my age. Everyone else was five years younger than me. So, I was able to pick and choose the jobs when it came time to graduate. I was in demand. I had fulfilled my military commitment, and a lot of people were still going into the military when I graduated. So, I had my choice of a number of what I thought were excellent job opportunities. I chose to go to work for Time Inc. primarily because of the people I met at Time Inc. back in 1957. I didn't know much about publishing or journalism. I just liked everything I saw at Time Inc. when I came down from Colgate for my interview. I went to work for them in the summer of 1957, and I have been here ever since. I was lucky to find the right job the first time around.
SMITH: Your first employment out of college was with Time?
MUNRO: Yes, it was.
SMITH: And you are still there?
MUNRO: Yes, a wonderful thirty-four years.
SMITH: What was the first position you took at that time?
MUNRO: Obviously in 1957, Time was a much, much smaller company than it is today. Even then, we were the dominant magazine publisher or a dominant magazine publisher. Other than magazines, we had a small interest in broadcast and a fledgling book division. But basically, we were a magazine company. I went to work for Time magazine. Worked in the Time magazine circulation department for a year or two. Then worked in their advertising and promotion department. Those were sort of training jobs, really, to kind of get your feet wet in the company.
My first real job was at Sports Illustrated in 1960. I went over to that magazine to become its assistant business manager which basically meant I did the budgeting and kept track of the dollars and all of that. I spent a whole decade at Sports Illustrated ... worked there from 1960 to sometime around '70. Eventually, rose to become the publisher of that magazine, and was there just as it was beginning to turn a profit after a long string of losses. But, it was a wonderful experience. I have always been involved in sports, and being involved with Sports Illustrated was really a wonderful, joyous decade.
SMITH: I was going to ask you if you were a sports fan. Was it just coincidence that you wound up at S.I. or did you make an effort to get yourself assigned over there?
MUNRO: No, it was an opportunity that presented itself. There was an opening there. I really couldn't have cared less where I worked then. Sports Illustrated in 1960 was a struggling property. There was some talk whether it would survive or not, because it was piling up substantial losses during that period. So there was risk involved there. I think it was the only job I was offered, so I wasn't in a position to be fussy. But, I did like the magazine actually at that time. I liked the subject matter. Despite the risk, I was very pleased that I was offered that job.
SMITH: In your work, were you actively involved in any way in directing the coverage of sports and the writing?
MUNRO: No. I was completely divorced from the editorial operation other than that I knew all the editors. Time Inc. was structured in its infancy by its founder, Mr. Luce, so that the journalists operated completely independently from the business people. In fact, at the hierarchy of the company, the editor-in-chief reports to the board of directors, and the CEO reports to the board of directors. So, the journalists at Time Inc. have complete autonomy. Even though I was involved with editors and journalists, I had absolutely no input into what went into the magazine. It is similar to every other business person on the magazine side.
SMITH: I read an anecdote about one of your actions when you were business manager at Sports Illustrated relative to changing the practice of reporters travelling first class on aircraft to flying coach. Would you repeat that story, if it is a true one, for this record?
MUNRO: That popped up the other day during my retirement rituals. I'm not even sure I remember that incident. But being a business manager, I was the one who had to watch the costs and the expenses. Of course, you have to remember that during that period, we were losing large sums of money. So, watching the costs was a big part of our job. I can remember one of my colleagues who was on the journalist side of Sports Illustrated telling me what a great deal it was to ride first class on a certain airline. I made a mental note of that and went back and determined that they weren't supposed to be flying first class. None of us were to fly first class. I guess I ended up being one of the initial whistle blowers. I think that was the last time anybody rode first class for Sports Illustrated for several years. Eventually, we became successful and people were able to fly first class. But back in the early '60s, we weren't doing anything first class.
SMITH: Well, I enjoyed the story as I read it. Apparently the reporter was said to have come back with a big scoop. If you flew first class on Northwest, there was no limit on the drinks. Was that it?
MUNRO: Back in those days, there was a lot of serious drinking at Time Inc. That seemed to have disappeared in the '80s. Drinking became less than fashionable here. When I joined the company back in the '50s, there was a lot of serious drinking going on in the publishing business and in the advertising business. That has pretty much disappeared.
SMITH: I understand that you also met the lady who was to become your wife while you were at Sports Illustrated.
MUNRO: Well, yes. I think as I mentioned, not long ago two terrific things happened in my life. One was that I was hired by Time Inc. which led to all the wonderful things that have happened in my life. The other was finding my wife Carol, who worked with my boss--was his secretary. We had one of those office romances, and ended up getting married, and have been married rather happily, I would say, for the last twenty-eight or twenty-nine years. I'm not sure which. I think twenty-eight.
SMITH: I just have to ask out of curiosity was her first job also with Time?
MUNRO: Yes, she came right out of college and worked for Time, and then like me went from Time to Sports Illustrated. We happened to run into each other in the business office of Sports Illustrated which was rather a small office. There were only about four. There was my boss, the business manager; I was the assistant business manager; and there were two assistants. Carol was more of an assistant than a secretary. But, we just ended up in the same spot. But back in that era, an awful lot of Time Inc.'ers married each other. I wasn't the only one. There were a lot of us that ended up getting married.
SMITH: You mentioned her name is Carol. Would you tell us her last name?
MUNRO: Carol's last name is Keeny. She was from Sewickley, Pennsylvania, right outside of Pittsburgh.
SMITH: This is a good point to get back into your family for just a moment. How many children did you have, and could you tell us a little about them?
MUNRO: We had three sons. My oldest, John, is twenty-five. I think about to be twenty-six, or is it twenty-four about to be twenty-five. John went to Hamilton College in upstate New York, right near Colgate as a matter of fact. John is a school teacher. He was married last summer. He is working on his master's degree now at Western University. He teaches in Fairfield County, so we see a lot of John and our new daughter-in-law. Then, my middle son is twenty-one. He is a junior at St. Lawrence University. My youngest child, Matt Munro, has just graduated from Salisbury School and is off to St. Lawrence with his brother. So, my children are growing up too fast.
SMITH: Don't they all. Would you just detail for us your advancement through the various positions you had at Time after becoming the general manager of Sports Illustrated.
MUNRO: Yes. I went from assistant business manager to business manager to general manager which is basically all the same job at somewhat higher levels with more responsibility. But, you are basically doing the same thing. Then, I was taken from Sports Illustrated to Chicago for a very, very brief stint to run some suburban newspapers that Time had just bought, I think in maybe 1969 or 1970. I am not exactly sure of the year. We bought two chains of newspapers in the northern and western part of Chicago. Pioneer Press was the name of that organization. I was chosen as the fellow from Time Inc. to put together these two operations and run them. I had only been there a very, very short period of time, like a month or two, when my colleague at Sports Illustrated, who was the publisher of Sports Illustrated--my ex-boss--was made the publisher of Life magazine. Since I had sort of been his understudy at Sports Illustrated, they decided to bring me back even though it seemed like a sort of foolish thing to do. They brought me back from a very brief stint in Chicago to run Sports Illustrated, which was the kind of a job I worked hard to obtain. I was very delighted that they chose not to leave me running weekly newspapers in Chicago. Not that it wasn't a good job, but my heart and soul were at Sports Illustrated. So, I was very fortunate in being brought back to run Sports Illustrated. I think I was the publisher of Sports Illustrated for two or three years. I entered the cable business after leaving Sports Illustrated.
SMITH: That was approximately when from your recollection?
MUNRO: I think '71 or so. Seventy or '72 is when I left the publishing side of Time and got involved in what was then a fledgling video side of the company.
SMITH: Was that your first introduction to cable television?
MUNRO: Yes, I had never known anything of cable television at all until I was tapped to run not just that operation but also the book operation came under me. It was a promotion obviously for me, but sort of a strange promotion, because I was absolutely delighted running Sports Illustrated which was then beginning to prosper and becoming really a major magazine. I was being asked to come in and take over something that was, I think, at best a rather confused lot of business. HBO was then just a gleam in our eye and we had Manhattan Cable Television which was then Sterling Cable which was a huge drain on us. It was kind of a disaster. Then we had a cable television operation which we weren't terribly pleased with, I mean a broadcast operation where we owned a number of broadcast stations and that was something we weren't terribly happy with. So, I got thrown into something I knew very little about, and I was thoroughly confused for at least the first several months of that assignment, maybe the first year.
SMITH: Time Inc., if my memory serves me correctly, was fairly heavy in television broadcasting for a short period, was it not?
MUNRO: Well, we had five stations and I forget exactly. I think they were Bakersfield, San Diego, Grand Rapids, Denver and maybe Indianapolis--some ABC affiliates, some CBS affiliates I believe. Yes, we had our substantive group of television stations, except for San Diego and perhaps Denver, they were really not in the major markets. I am not an historian of that period of our history but of what I inherited, there was a feeling that I really don't know how we got into that. Time and history can refresh my memory if I went back and looked at it. I think my bosses, my predecessors, were not terribly pleased with our venture into television. When I got there, I think there were some signals given to me that perhaps exiting from that wouldn't be the worlds' worst idea.
SMITH: Were you involved in ... I assume you were involved in ...
MUNRO: Yes, I was in charge of that area when we divested and sold to McGraw Hill. It is interesting that my colleague, Nick Nicholas, who was my successor at Time Warner, was the same young man who basically negotiated the divestiture of those stations to McGraw Hill.
SMITH: At that time was there any thinking in your mind that cable television offered more of an opportunity for Time than the broadcast stations did?
MUNRO: Well, that was all a part of this. I mean everything was ... In a large corporation nothing is black and white or cut and dry. There were a number of variables that played on that decision. I think we were bright enough to recognize, way back then, that there was something to this wonderful world of cable though we didn't really fully appreciate it by a long shot. I think that there was enough visceral feeling amongst several of us here that kind of said to us that the future of Time Inc. may well be in cable not broadcasting, because we had gotten into broadcasting a little late in the game and we had an opportunity to get in relatively early on cable. But, it wasn't that cut and dried. We were very frustrated with Sterling where we had minority shareholders, and had basically a can of worms with Sterling. We were really the first big urban cable system, and that was a very confusing part of it. But, eventually we worked our way out of that. I think we had some luck. And now, as I think you know, Manhattan Cable is probably one of the most successful cable operations in the country. Back in 1970, we couldn't give it away. So, there is a lot of faith involved in these things.
SMITH: When you did come over and assume the responsibilities in cable and video, where did the systems come from that Time had at that time? They hadn't built them had they?
MUNRO: No. I really draw a blank on exactly where those systems came from. But, of course, we did get an early interest in ATC. We had a 10 percent interest. We had a few cable systems and if we sit here today, Strat, I am a little bit embarrassed to tell you that I can't say exactly when in the late '60s we got those systems. We could determine that, we could go back and do our homework. We ended up putting those systems into ATC in return for 10 percent of ATC, and that's what really led to our involvement in the cable industry. My predecessor, Jim Scheffly, who I think was the first within Time Inc. to grasp the full potential of cable television, was our representative on the ATC board, representing our 10 percent. I think it was around 10 percent, maybe slightly more than 10 percent. I think as Jim sat on the ATC board for a couple of years, he began to really appreciate the huge potential of cable television. It was Jim who sort of encouraged me and my colleague, Nick Nicholas, to eventually acquire ATC, which we did as you recall.
SMITH: Do you recall the date that acquisition was made?
MUNRO: Oh it had to be, I'm guessing in probably the mid '70s. I don't know exactly what year it was. Again, we can go out and get all those numbers for you. But, I can remember how excited I was about that because by then I also was well aware of the potential of cable and well aware of what a wonderful company Monty Rifkin ran. ATC was a terrific, terrific cable company, is today, and certainly was then primarily because of Monty's vision and his leadership.
SMITH: Monty was one of the early pioneers whose oral history has yet to be taken, but is going to be.
MUNRO: Well, Monty is a legend in the cable industry.
MUNRO: Really, he put together a wonderful company, and we were privileged, I feel, to have been able to acquire that company.
SMITH: If you acquired the company in the mid 1970's, you were already in cable with some systems of your own at that time.
MUNRO: Well, we had sold those to ATC, and gotten that 10 percent.
SMITH: I see.
MUNRO: But our exposure to cable was minimal, Strat. We had not been a major player by a long shot. We happened to have had some systems, and as I said, it escapes me how we ended up having those systems. But, they were the systems we put into ATC in return for the ownership position in ATC.
SMITH: I presume, you got caught up in the franchising frenzy of the '70s.
MUNRO: Oh yes. We were deeply into that, and I was personally involved in that in a number of systems. It turned out that in every system I pursued, every franchise I pursued, we lost. I had a great losing streak going ... Pittsburgh, Cincinnati, Minneapolis, New Orleans. I went to perform for all those city councils, and we lost every one of them. That was a very hectic period of the cable industry, there was no question about it. Chasing franchises was exhausting, frustrating, highly politicized. But, we won our share. ATC, as you know, ended up building a tremendously strong company, which we are very, very proud to be the owner of.
SMITH: At least two of those franchise battles that you mentioned, you lost to Warner.
MUNRO: Well, those were frustrating days, particularly Pittsburgh. I recall the loss of Pittsburgh, because we at ATC had been working Pittsburgh for years and really had assumed that we would win the franchise and were practically sipping the champagne. Then suddenly Warner came in and stole the chickens, and we immediately cried foul. No pun intended by the way. But, I think we felt that, by God, Warner must have been doing something less than legal or less than ethical to have won that from us. But upon reflection and as you may recall, we sued Warner during that period. But, I think what happened is that they were just better at franchising than we were, and basically I think we were poor losers. We lost something we felt we had won. We over reacted. But upon reflection and upon investigation, we simply found out what Warner had done. They had just been smarter than we were, and wanted the franchise. But, it was one of the longest days of my life when we lost Pittsburgh.
But as you may recall, Pittsburgh was a very onerous franchise to begin with. There was even a time when we looked each other in the eye and said, "Do we really want to go after Pittsburgh?" Because the franchise was so demanding that to make money out of Pittsburgh would have been very difficult. But, we had gone so far down the road that I remember making that decision myself as a matter of fact to continue to pursue Pittsburgh and win it. We lost it, and I think about six months later, upon some reflection and some hindsight, I guess we perhaps came to the conclusion that the Lord was smiling at us, because Warner didn't have a lot of fun with that franchise, and eventually sold it to Telecommunications.
SMITH: As I recall, they were substantially involved in trying to get the terms of it reduced to get the burden off their back. TCI, I believe, made a condition of their buying it that those terms be ...
MUNRO: Yes, true enough. A lot of franchises that were won during that frenetic period were less than desirable, and a lot of them had to be renegotiated because you never could have lived with those franchises. But, you know, there was a feeding frenzy then. We were all running around like, you know, chickens with their heads off trying to get any franchise that we could get our hands on. Not only us. I'm talking about the industry--we weren't alone there. Everybody was because there were only so many franchises available. Once one was gone it was gone. So, you tried to pick the franchises you wanted the most and concentrated on them. But we spread ourselves quite thin in those days. Everybody in the organization from every part of the company was out chasing franchises.
SMITH: Well that reminded me of what I used to experience at the FCC and competitive television application hearings.
MUNRO: Oh, same thing.
SMITH: Yes, the idea was promise everything you could think of. No matter what, promise it, and then worry about it later.
MUNRO: Oh, absolutely. I think some people question the ethics of that strategy. But, I don't think it was anything unethical. It was just the only way you were going to get a franchise. The city fathers were holding a much better hand. They had five or six people willing to kill to get that franchise. They used their leverage and took full advantage of it.
SMITH: Do you have an opinion, thinking back on that period, as to who was primarily responsible for the development of that course in franchising? Did the industry bring that on themselves in your opinion, or do you think it was more the pressures of the franchising authorities?
MUNRO: I'm sorry, what was the initial point of your question?
SMITH: The point of the question is, the industry getting into this situation where they were bidding against each other with extremely, I would say almost outrageous bids, were countering each other. Did the industry bring that situation on themselves, or did you ...
MUNRO: Oh yes, I think they did. I think if there was a villain that I don't think that you can blame the cities. I mean, they were just doing what was in the best interest of their constituency, their public. Most of those people were good public servants, I think. There may have been a few rotten apples in the barrel but most of them were people who were doing their best. I think that Morris Karshas [???]in New York is a good example. He was a wonderful public servant and exerted as much leverage as he could in the cable company. The cable company wanted those franchises badly enough to promise anything that they were asked to promise and to compete viciously against each other. So, I think they made their own bed, and they had to sleep in it.
SMITH: If the cable systems said they could do it, why not ask for it.
MUNRO: They got accelerated. Each franchise became more uneconomic. Some of those franchises were crazy. But, we all kept chasing them knowing they were crazy, knowing that we would somehow or another have to renegotiate them.
SMITH: I had clients for whom I appeared in those franchising proceedings. I remember carrying in franchise applications that were six or seven volumes wide.
MUNRO: There were cities who wanted us to plant trees. It got to be crazy. It was crazy, but it was an exciting period in the history of cable television. You only go through that once, there was only one period in the history of that industry. Now there is re-franchising, but there was only one period of getting those initial franchises, and it was exciting.
SMITH: And that is a history that has to be written, too. It needs to be put down. I don't want to forget before we complete our interview to go back into some of your civic background and interests. But, since logically, we have gotten this far into cable, we might just as well go on and talk about the HBO situation. Was HBO the first of the major network cable organizations?
MUNRO: Yes. There were previous failed pay television ventures, several in the '60s, but none of them were successful, and they came and they died a brief, quick death. HBO was the pioneer in the current and successful genre of pay television. I think to a great degree, Chuck Dolan, was certainly a legend in the industry. It was his idea. He brought it to us long before anyone fully grasped the potential of pay television. It was Chuck's dream. Chuck worked at it for a brief period of time. When we sold Chuck our Long Island systems, he left, but left the concept of HBO with us. Then, it was really only a concept and a dream. I credit Chuck with having had the dream and the concept. But, I credit my colleagues at Time Inc., particularly Jerry Levin, with the wherewithal and the stamina and the energy to take a dream and make it a reality which is what Time Inc. did with HBO. I remember those days rather vividly even though they are damn near twenty years ago. I think a lot of people really never fully appreciated the magnitude of what could happen here.
Of course, it started off as a terrestrial microwave network, going along telephone lines. It was Jerry Levin, I think, who was primarily responsible for putting HBO on the satellite. Of course, that was the revolutionary step that put HBO on the map, as well as everyone else on the map. We were the pioneer in terms of satellite transmission. I think of all the things that HBO stood for, and all of its success, that obviously was far and above anything else HBO has done to put them on the map.
And those were interesting days, the early days of HBO when we were living kind of "hand-to-mouth." Within timing, no one fully appreciated what it was. I don't think anybody had any idea of its potential. I'm not sure I did at that time. I'm not even sure Jerry did. But slowly but surely, those who worked in the vineyards of HBO began to realize that we really had something of enormous potential, particularly if we could get it up on that satellite and put that satellite footprint all over America. We first did it by sending tapes around, then we went to telephone lines. But to make a national television network by telephone lines was pretty difficult to do. So, the satellite was obviously the breakthrough.
SMITH: You said you first did it by taking tapes around. Was that part of the actual early premise of HBO, itself, to bicycle tapes?
MUNRO: Yes, that was really early on when it was a newborn. But, we knew that wouldn't work, so the next best thing was to do it with microwaves and telephone poles. That was also very complicated, enormously complicated. I don't think that we would have probably succeeded in the long run. It would have taken so long to succeed that the satellite, obviously, popped up as the answer to a maiden's prayer. I think a lot of people in this building, and we were still then as you may recall or I should remind you, we were still basically a magazine company in those days. A lot of my colleagues at Time Inc., with perhaps the exception of Jim Scheffly, never fully grasped the potential of cable. Of course, HBO was tied to cable and was going to be distributed through cable systems. I think Scheffly was the one man who really appreciated the vision of some of those cable pioneers. I would count Scheffly as a cable pioneer, even though he will never be listed as one. But, in the Time Inc. history, I would think that he will be listed as a cable pioneer.
SMITH: How extensive did HBO become when it was limited to terrestrial microwave?
MUNRO: Well, we were at a point within the corporation where we were losing money. My bosses had set certain goals for us. There was a point there if we didn't get x-number of subscribers, and I remember back when it was twelve thousand subscribers, then it was twenty thousand subscribers ... We'd take two steps forward and one step back. Those were traumatic times. We really never knew when our bosses were going to say, "We've had enough of this. This is obviously not going to work, and you are a drain on the corporation, and perhaps it's time we tried something else." But thank God every time we had to reach a goal, we reached it. Now we reached it by the skin of our teeth. Some of those went into the wee hours of the morning. But, we always managed to get to where we wanted to go, and we were kept alive. Again, I think, primarily because of Jim Scheffly. Of course my job then, being Jerry Levin's boss and overseeing HBO, I had the monthly job of going to the Time Inc. board of directors meetings. I went to meetings even though I was not a director of the corporation. I went to board meetings and explained to them what we were doing. Every month I kind of had to resell the concept of HBO and the dream of HBO. We had a few people on the board who were patient enough to stay with us until we obviously were a success.
SMITH: I'm going to have to interrupt for a minute and turn over the tape. I think we have a full tape.
End of Tape 1, Side A
SMITH: This is Tape 1, Side B of the oral history interview with Richard Munro at his offices at the Time-Life Building on June 6, 1990. When we turned the tape over, Dick, you were discussing the extent to which the HBO concept had developed. I had asked you while it was in the terrestrial microwave stage, and I remembered you mentioned earlier off the record the name John Walson, a cable television pioneer and operator extensively in Pennsylvania. Was John not associated in one of those early HBO transmissions via microwave?
MUNRO: Yes. I guess I would describe John as our original affiliate. We were very close to John back in those days. I had gone down to visit John on several occasions during that period, and he and Jerry Levin had seen a lot of each other in those early days. John was a believer in what we were doing and a supporter. At that time, there weren't a lot of people jumping up and down and raising their hand to sign up with HBO. So, John was very important, he played a very important role in the history of HBO in its very early days. He enabled us to reach his subscribers. I have fond memories of John. He came up to the Time-Life Building on several occasions. I remember being with his family, visiting his offices, watching him market HBO in the early days to his subscribers. It was a very important chapter in the history of HBO. John played a major role. I miss John, I haven't seen him in a long, long time.
SMITH: John, unfortunately, has suffered a stroke, and I really don't know right now just how his health is. Do you recall which one or more of John's systems was connected to that microwave setup?
MUNRO: I know all of his central Pennsylvania systems were. I think he had Bethlehem and Pottstown. Where is Lehigh?
SMITH: Can't help.
MUNRO: It is all those original systems that John built in that beautiful section of Pennsylvania. I draw a blank on exactly where they were, but they were where John's headquarters were.
SMITH: They were those that were served by John's microwave system. Still does. He had an extensive microwave system.
SMITH: Did HBO build any of its own microwave links at that time or did you utilize others?
MUNRO: No, we didn't build them. We utilized existing ones.
SMITH: Did you make any effort to utilize or get telephone company microwave systems?
MUNRO: Yes, we were in the midst of all that. I suspect, Strat, that when you talk to Jerry Levin, he can cite book and verse on that. So, I will leave that piece of history to Jerry.
SMITH: Okay. What were the particular problems, if any, that stand out in your recollection about persuading the Time board to go along with this new idea that not a lot of people had faith in.
MUNRO: First of all, we had a very understanding and, I think, thoughtful board of directors. I think they, obviously, were not adversarial, they were never adversarial. They were supportive and understanding. I think my credibility hit pretty good with them which was important. I had had a successful career to date. I think they were aware of that. I won't say they had blind faith in me, not by a long shot. But, I think they were willing to go along with my recommendations up to a point. Now, I think there would have been a point where they would have said, "MUNRO:, we have believed you so far, but boy it's not working out, and I think it's time we move on to another business." We thank the Lord, we were able to succeed in kind of the nick of time.
But, there were no traumatic moments. I think there were a couple of people who may have kind of raised their eyebrows on occasion. I think selling the board on the concept was probably not as difficult as getting the product. That was another big stumbling block we had in the early days of getting the movie companies to give us movies to put on this system. That was not easy. It wasn't easy to find affiliates who would take our service. It wasn't easy to find programming to put on the service. So you had, like any new fledgling business, a lot of obstacles to overcome. I don't think we are unique in that. I think pay television is just one of many products that gets brought to America--some succeed, some don't.
There are always a number of thorny issues to overcome with a new product. You had to convince the consumer that it was worth the price you were charging. You had to convince the movie companies that this was a place where their films should be exhibited; that it wouldn't be competitive with theater. All those obstacles ... that's nothing new. I mean that's like any new business, Strat. We were lucky to have the breakthrough with the satellite technology which sent us on a skyrocket. From then on it was basically a piece of cake. People were standing in line to get our services. We also ran into the content problem. We were the first television entity to bring an uncensored product into your living room. That was a very traumatic experience for a lot of towns, particularly southern towns.
I remember Jackson, Mississippi, where the clergy of Jackson boycotted us. We had to go down to meet with the clergy there. We were described as the devil by some. It was hard to overcome that. Four letter words had not been brought into America's living rooms. Of course, you had to pay to bring them in, and we tried to make that point. We tried to make the point over and over again that no one is forcing these R-rated movies into people's homes. They were raising their hand and purchasing it. But early on that was a very, very delicate subject. It was also a delicate subject with our board of directors. We, obviously, were never going to bring X-rated movies in, but we were bringing all those movies that were in your movie theater into your living room. It was an interesting period. Of course as you recall, it was in the late '60s, and the '70s where a lot of social mores were changing in this country. That was an interesting period in American history in terms of our music, movies, and television, and we were on the cutting edge of all that. So there were all kinds of obstacles, but I don't want to make this sound more traumatic or more difficult than it was. It was simply trying to bring a new business into the game.
SMITH: You mentioned a moment ago, of course, that satellites were what made it possible for HBO to take off and really get going. Of course, they did the same thing for the entire industry. Really, it almost took the place of microwave. HBO was one of the first, if not the first, to distribute a program by satellite, is that correct?
MUNRO: I think we were the first. We were the pioneers. Now whether the broadcast industry ... I don't think they have done anything with satellite distribution. To the best of my knowledge, we were the pioneers then.
SMITH: That was my understanding. How did the idea of using satellites develop within the company?
MUNRO: Well, I think it was basically Jerry Levin who was responsible for pursuing that strategy. We knew if we could make that breakthrough, it would mean national distribution at the flick of a switch which is what literally happened. And if we could convince a number of cable affiliates to build a receiving station, to do all the technological investment that was necessary, then we had a business. But, that was not easy either. We had a very difficult time convincing Monty Rifkin, of whom we owned 10 percent, to become a player here. In fact, it was Bobby Rosencrans of UA-Columbia who was really the guy who stood up and got counted here. I think if you have an opportunity, you ought to talk to Bob about that. I think without Bob having raised his hand to play ... we were having a tough time even though we had the satellite technology in hand. It was another chore to convince people to take this service.
SMITH: Bob Rosencrans was an early client of mine many years ago when I practiced law in Washington, and I do intend to get to him for a similar interview.
MUNRO: Well, Bob is one of my all-time favorites in the cable industry. Not only is he a personal friend and a man I hold in enormous regard, but he also was a guy who stood up and got counted when nobody else did. He was the first guy to kind of say, "I'm going to play. That was very important.
SMITH: Can you give us a little more of the detail of that particular incident, if it occurred as an incident?
MUNRO: Well, I remember when we were in his Vero Beach system. He had built the earth station to receive that. I remember going down there for the opening night. There was a big heavyweight boxing match that they were bringing in from Manila. But, Bobby was just enthusiastic about it. He understood the potential of this when others didn't. I guess I just can't say enough about how important his role was in the early days.
SMITH: Before I took my position at Penn State, I was doing some cable television consulting work for the city of Vero Beach. I learned at that time that Vero Beach and Fort Pierce, which were also under the same ownership, were the first systems in the country to receive a satellite broadcast.
MUNRO: They were. That was simultaneous. I think Jackson picked it up the same. But that was only because Bobby did it. I mean, Bobby kind of shamed Monty into doing that. That was kind of an interesting thing to watch, because I don't think Monty would have done it if Bobby hadn't done it. Bobby volunteered, and I think at the eleventh hour, Monty said, "Well, if he's going to do it, I'm going to do it." So I think that night when we put it up on the satellite, I think those two systems were the first. But Bobby actually, I think, gets the credit for really being first. We have pictures here in our archives of that first station in Vero Beach with Bobby, Jerry and myself standing in front of it. I forget what year that was but it had to be something like '73 or '74.
SMITH: It was back in that area.
SMITH: This will be a nervy question but I am going to ask it of you for the record anyway. Do you think there might be some copies of some of those photographs that you would be willing to release for permanent storage in the archives at the Cable Television Center at Penn State?
MUNRO: Oh, I think we would be flattered to do that. I'm not sure who is the recipient of all that stuff in this building, but we've got a lot of this history someplace within the Time-Life Building. So, I think we would love to make that available to you.
SMITH: Well, we have a fledgling museum and we have plans for a building where we can display substantial artifacts. We are also trying to get some of the cable networks to deposit some of their made-for-cable motion pictures there for the long haul. All sorts of records. Any records that you have that are not required or desired--let me put it that way--to keep in the companies own files, we would be delighted to have them and catalog them and see to it that they are properly preserved.
MUNRO: Yes, I'm not sure how much we've got that's meaningful to you, but I think that picture of Bobby Rosencrans' satellite receiving station is a significant photo. I think, obviously, all of that wonderful programming that we did--the polka festivals. They redid some programming in the early days of HBO that are classics. I mean, you wouldn't want to miss it. Some of them were awful. But that was state-of-the-art. That was getting started. John Walson liked to polka, so I think we did a polka special.
SMITH: Is that why it was a polka?
MUNRO: I think John Walson had a voice in that. In those days Jerry was not only the CEO of HBO, but he was the programming director. He was everything. I think, again, when you have your interview with Jerry, he can shed some interesting light. You should have a copy of all those early programs.
SMITH: Well, we've got that one tape--the Pennsylvania Polka. We take it around occasionally when one of us has to make a speech at a cable meeting or something like that, and play it for them to show them the first actual program via satellite.
MUNRO: We have some others that are of equal quality that you'll love.
SMITH: Well, if they're available, we would love to have them.
MUNRO: Sure, they are available. I will get you copies of them.
SMITH: I can assure you that they would be properly cared for. What did one of those earth dishes cost in that time? You said Monty Rifkin was hesitant.
MUNRO: They were expensive. I don't have any idea what the number was, Strat, but they were not an insignificant expense. They were big receiving dishes, as you know. I mean, $100,000 ... I don't know.
SMITH: They were in that neighborhood or more.
MUNRO: I mean that's almost twenty years ago. So, $100,000 was not a minor investment. You had to have all the hardware that went with it. It was significant.
SMITH: Well, was that Vero Beach reception from satellite? Was that the turning point with Time-Life in deciding that they really had something here and were going to go ahead and put money in it?
MUNRO: Yes, I think that was a very, very significant event. First of all, you had to prove that the technology worked. When you flipped the switch, you all said a silent prayer that something was going to come out of your television set. And by God, it did. It went from the studio, 2,200 miles, 22,000 miles up in the air. It came down, and it worked. Until you actually saw it working, there were some skeptics. So, sure, the minute people recognized that this state-of-the-art technology did work, then everybody was hopping on the bandwagon. It was a gold rush thing. Everybody wanted to be an affiliate.
Those were the heydays of HBO, because we were basically the only kid on the block then. We had no competition. That was pre-Showtime, pre-anybody else. We were like the cavalry coming over the hill, because we were a new source of revenue for the cable operators--a substantial source of new revenue. Plus, it really to a degree put cable on the map. This was the first time you could get unedited, uncensored, commercial-free movies in your living room. It was a major event, it was revolutionary. So obviously, we were riding the crest at that period.
SMITH: Well, you mentioned earlier that a major problem, and it must have become an enormous one at this particular time, was getting product to program it. Could you tell us of some of the early efforts and possible breakthroughs?
MUNRO: Well, it was a difficult time. We had some people who were more friendly to us than others. It was interesting that Warner was always friendly to us way back in those days. They were always the easiest company to do business with. But, we were also getting some product out of Paramount. We had substantial problems, I remember, with Universal with whom we have always had substantial problems. But it was also a period where you kind of realized who your friends were and who your friends weren't. I can't tell you any exciting stories about that period other than it was a never-ending battle. You had to put a schedule together every month to put out your program guide, and that again was a "perils of Pauline." We would hold the presses right up to the eleventh hour not being sure of which movies we were going to get.
But again as we succeeded and the distribution broadened and the dollars grew, then obviously Hollywood recognized that it was a whole new source of revenue for them. They eventually hopped on the bandwagon, too. But again without being overly repetitive, I think none of this should be a surprise. Any launching of a new service, a new business, or a new industry really is never easy. It's always got its obstacles. We just tried to take them one at a time. We eventually succeeded. Not a terribly romantic story really, it was a lot of hard work, some of it not very glamorous, and some of it very tough. Eventually, we succeeded.
SMITH: The first program that we were talking about, the one at Vero Beach, was the boxing match from Manila.
MUNRO: The "Thrilla from Manila."
SMITH: The "Thrilla from Manila."
MUNRO: There were two big fights that we brought in. I think the "Thrilla from Manila" was the first one. That was Mohammed Ali fighting somebody, maybe Frazier, I'm not sure who it was. We did two big fights in the early days of HBO, and I remember one of them I viewed in Vero Beach, and one of them I viewed right up here in the Time-Life Building where we had a big reception on the top and put an earth station on the top of this building. But, Vero Beach was obviously the first one.
SMITH: Early on you apparently established a relationship with the fight promoters. HBO has been strong ever since, have they not, in fights particularly?
MUNRO: Yes, I think we found an opportunity there. We tried very hard over the years to be an NFL programming distributor, but that never worked for us. But, boxing ... I think, we saw an opportunity and a potential franchise, because no one was really dominating that sport. We were farsighted enough to realize that there was an opening there for us. So, we grabbed onto it early on. Of course, it has reached the Tyson proportions. We carved out a franchise there for ourselves which I think we enjoy very much. I think our subscribers have appreciated it. I think it has been very good for the health of HBO.
SMITH: How early on did HBO recognize or decide that it was going to have to produce programming of its own as well as go out and acquire the rights to use motion pictures?
MUNRO: I think when we got some competition, when Showtime and The Movie Channel came on board under the pay universe. We were all showing the same product and we somehow had to differentiate ourselves. We had several zigs and zags there. We went through the exclusivity wars of movies which really became obsolete when the VCR came around. People could now go to their rental store and bring home a movie immediately--long before it came to pay. So, I think like any new product, it went through a number of stages, a number of competitive battles. We realized that we had to be more than just movies that you could get at your video rental store. That's all still evolving, Strat. HBO is still trying to look at how it can bring the greatest value to its customer, and Showtime is. Now, we seem to be doing more and more of rather thoughtful, original programming, and our competition is doing the same thing.
But, that's kind of a continuing debate and a continuing marketing challenge. There was a time when all our research said that most of our subscribers really wanted nothing but big movies. That's what really was the magnet that brought people into HBO. If a movie we produced ourselves really had no exposure, no advanced publicity, no advanced advertising, no one could really care less about it. I remember at one period in our history that even an awful movie that got a lot of press was considered of value to the subscriber. Where a very fine HBO-produced movie with no advertising, no pre-advanced billing ... really in the eyes of the consumer didn't have any value. But, all that is evolving. The marketplace is changing all the time, as we have seen over the last decade. The big three networks are getting less and less of an audience. The basic cable channels are getting larger audiences, pay cable seems to be now somewhat static. All that is a never changing evolutionary phenomenon.
SMITH: You were mentioning the fact that the public often would not react with particular enthusiasm to an HBO-produced movie that was very well done because it had not had the kind of publicity that perhaps a Hollywood movie would have had. Your HBO movie would have been first run on cable; the Hollywood movie, of course, second, third or fourth run. That must have been very discouraging to early HBO production.
MUNRO: Well, it was, and to a degree, I think it still may be, because HBO has done some programming that Time Warner is terribly proud of. We've really done some adult programming. I don't mean adult in terms of violence and sexuality. I'm talking about substantive movies ... Sakharov, and we've done things on AIDS. We've done some programming that makes us all proud. But, sometimes we wonder if the consumer really appreciates that kind of programming. We have that problem with Wimbledon which we have brought to America for years and years and years, and we think it is a prestigious event. We are going to continue to bring Wimbledon to our subscribers. A large number of our subscribers couldn't care less about Wimbledon. They would rather see a movie.
So, I think what we try to do is balance off our programming. It is still a movie-driven business, and I suspect it will always be a movie-driven business. That doesn't mean that there isn't room for really quality children's programming, which we are very proud of. We have done a lot with Jim Henson, as you know, and the Muppets. We have done a lot of original children's programming. We continue to make a lot of original movies which we are very proud of. So all that is a mix, though some of it may be perceived as more value amongst a subscriber, I think we will continue to give him a balanced diet of programming. That makes us stand a little bit taller in terms of our image of what we think HBO is.
SMITH: Is cross-promotion on cable doing anything to alleviate that problem of not having enough subscriber interest on new original productions?
MUNRO: I think it helps, yes. I think we promote a lot of that product on Cinemax as well as HBO. Those are very strong businesses. Their growth has slowed, and it is now pretty much a marketing game because until the rest of the nation gets built out in cable, we have to market that product harder and harder. I read a quote the other day from Michael Fuchs, who runs HBO. He talked about the necessity of marketing HBO, and he said, "Coke wouldn't last very long if they didn't advertise it." I think that's true of HBO or any other product in America. You've got to keep hammering away at the value that we bring our customers, and we continue to do that.
SMITH: The television networks with their mini-series and made-for-television motion pictures have somewhat the same problem. Would you equate that to the one the cable networks have?
MUNRO: If you are a pay cable subscriber and paying for that service, I think there is a vast difference to begin with. Because I think that the paying subscriber really is demanding big movies, he wants to see the big events. On free television if you will--as you know it is not literally free--over the air broadcast television, I don't think the consumer is quite as demanding. He is willing to take whatever comes across that channel, because basically he's not paying out of pocket for it. That may be the right answer to your question.
SMITH: A few minutes ago you mentioned Cinemax which is a Time Warner channel. What motivated Time to start up the Cinemax channel?
MUNRO: We had in place an infrastructure for one channel. We suddenly had a competitor. We felt since at that period there was channel capacity, for us to bring out a sister service made all the sense in the world. We had all the people in place. If they could program one channel, they could surely program two. If they could sell one channel, they could sell another channel. I think we felt that it was a competitive response to our competitor, our direct competitor--Viacom. Actually, Cinemax was programmed slightly differently, it had a different demographic thrust. It was a little bit more youth-oriented than the mother service, HBO, and a little bit more avant garde. It did extremely well and has grown, as you know. It is now just a hair behind Showtime as the number two pay service. I think it was a somewhat brilliant strategy to launch a complementary service. We could dovetail it beautifully with HBO where if you bought HBO and Showtime, you quite often saw a lot of the same product at the same time. We were able to dovetail Cinemax into HBO where you never had the same programming playing at the same time. So, I was quite excited when it got launched, and I think it has done a hell of a good job.
SMITH: By that time, then, Hollywood had loosened up reasonably in making the product available?
MUNRO: You still had to negotiate hard on price. But, there was no question, everybody wanted their films on HBO, or Showtime, or Cinemax. But, it's never easy when you negotiate with Hollywood. They are tough negotiators, and everybody wanted the top dollar for their films. We got as many films as we could afford to get. Sometimes we didn't get them all, but we got the lion's share of them, and that's still true today. It's not much easier today than it ever was. Every studio wants the best deal. That's not surprising, that is quite understandable. But, I think where at one time they had all the leverage on their side, then we had all the leverage on our side, now the leverage is somewhere in the middle.
SMITH: At the NCTA convention in Atlanta this year, I heard John Malone, the president and chief executive officer of TCI, say that HBO was the greatest cash-flow producer in the business. Is that correct? It surprised me to hear that.
MUNRO: If John says it is, I'm sure he's correct. I know it is a significant factor to cable systems. There is no question about that. Now, I think it may be less than it used to be. But, it is still probably a terribly important part of the cable systems. It just hasn't grown as fast as it used to. Pay cable seems to, at the moment, have plateaued to a degree. But even having matured and perhaps plateaued temporarily, there's still a lot of money that's coming into cable operators' pockets. So, I suspect that John's right. Other than basic, it's a huge part of its ...
SMITH: Your answer to the question pointed up to me why I was surprised. I may have misinterpreted his comment. I wasn't thinking of it in terms of cash flow productions for the individual system. But I was looking to HBO itself and saying, "Is HBO producing for HBO? Is that the greatest cash flow producer in the cable television industry?" That is the way I understood his answer, and I don't know if that is true. Maybe that's why I was confused.
MUNRO: You are talking about all the channels of entertainment that come in.
MUNRO: HBO has got to be the dominant, most successful by far. HBO is a very profitable company. I think that probably Showtime is very profitable, too. But, we are so much larger than Showtime that we obviously are that much more profitable. I think because of the basic economics of the two companies they are quite similar. We just happen to be larger. But, I'm sure Viacom is very pleased with Showtime as Time Warner is very pleased with HBO.
SMITH: Do you happen to have in mind what percentage of the income of HBO is being devoted to original programming?
MUNRO: I can get that for you. I think that information is not public, but I can probably give you a pretty good idea. It's not overly significant. The giant sum of money on the programming side is still going to Hollywood. I would say probably 80 percent of the programming dollars are still being invested in Hollywood products. Then there is some for sports ... Wimbledon, NFL programs, heavyweight fights. Then our original programming which would include not just "made-for" movies, but the comedies we do, and all of that. I could be wrong, but I'm not too far wrong. Seventy-five percent is Hollywood, and 25 percent is all others, something like that.
SMITH: Do you expect to see the amount of original programming by cable networks in general as well as HBO to increase?
MUNRO: Yes. I don't know how much more it will increase. You can see that Ted Turner is making a lot more "made-for" movies. USA Network is also cranking out some original programming. So, I think that everyone has hopped on that bandwagon. I don't think it will ever become a dominant thing. But, I think it is safe to say that it will grow modestly.
SMITH: What is your opinion of the relative merits of pay-per-view television versus per-channel such as HBO and Cinemax?
MUNRO: That, Strat, has been in debate since we were in the business. There were a number of people back in the early '70s when we launched HBO, that said the way to go is per-program. We just never bought that. Because I guess some of us with a magazine background thought a subscription service was really the way to go then, and we still feel it is the way to go. Now, we always felt, even back in the early days, there would be a place for per- programs. That made sense. I still think it makes sense. I still thinks it is a business. It will happen. It is happening, as you know. Several of our systems have done fairly well with per-program. But I still think, and maybe I have a lack of objectivity here, that the subscription theory is terribly logical. It is simple and uncomplicated. It doesn't force the consumer to make a decision all of the time. I think we have learned that the consumer doesn't really want to make the decision every five minutes about what he is going to watch. He likes to turn the channel and watch it. But, there is no question that there will be a market for per-programming. That will probably happen in this decade to a large degree, and I hope that we will play a role in that. So, I guess if that sounds ambivalent it wasn't meant to. I guess if I could summarize I would say that subscription pay television is here to stay. I think it is an entrenched business. I think the consumer is comfortable with it. But, I think the consumer will also buy on a per-program basis in addition to a subscription.
SMITH: Do you see Time Warner developing any pay-per-view services?
MUNRO: Yes, I think we feel that we are positioned to do that. We understand that business as well as anybody does. I think we can bring an expertise to it. So, I think you will see us as a player.
SMITH: I would like to change the subject just a little bit, and explore international cable, international satellite and cable distribution ... ask you if HBO or Time Warner, let's put it that way, is giving serious consideration to trying to market HBO type services internationally.
MUNRO: Yes, we have been frustrated in the pay television abroad. That's primarily because of a lot of nationalist feelings. It is very hard to bring a pay service to France. They feel strongly about their culture as most countries do. This was an invasion of their culture. We had a very difficult time in getting HBO abroad. We have not given up and as more satellites are being launched, not only in Europe but the Pacific rim, I think we now see some opportunities that weren't there before. So, I think you will find us trying to be as aggressive as we can in exporting HBO service to any place we can export it. We've got people abroad now working on that. I think when you again talk to Jerry, who is much more up to speed than I am because this is something that is changing almost daily ... This is an exciting opportunity for a lot of people trying to play--we are one of those. Again, I'm assuming that being the pioneer in this field that our expertise exceeds most peoples' expertise and that there will be a place there for us to play. So, I guess I would say I'm optimistic, but again, I think you need to talk to others within Time Warner who are perhaps more up to the moment on this than I am.
SMITH: Do you see Time Warner doing any franchising or building of systems themselves?
MUNRO: Well, we are competing now for some systems abroad. We have been in that market. We have Aberdeen, Scotland; we have Westminster outside of London; and we have now bid for Dublin. There have been a lot of opportunities that we have missed. We've been bidders and not won the franchise in a number of European cities. There is now an opportunity, I am told, in Hong Kong that we may look at. So, I think we would like to be players, but at the moment, I think our plate is fairly full. Domestically, we are doing a lot of things now that we put Warner Cable and ATC together. I think we are kind of preoccupied with that, but that doesn't mean we aren't interested in doing things abroad. We will continue to pursue international opportunities.
SMITH: Are you experiencing any unusual or different problems in your franchising and construction efforts over there?
MUNRO: I think they're probably every bit as competitive. I mean we are going up against Rebox and a number of foreign opportunities. I think it is in Dublin, Ireland, where we are going against Pactell. So we are seeing some new entities--some very confident entities--competing against us. It's kind of going back to those early franchise days that we talked about a moment ago in the United States. Some of that is going to start appearing abroad. But, I would hope that we would win our share.
SMITH: Do you see a significant amount of live satellite programming to Europe originating in the United States and being distributed on European systems?
MUNRO: Yes. When Europe became deregulated to a great degree, I think, we felt enormous opportunities for Time Warner software. I mean that's basically a business that we are a very major player in. I'm talking about television and movie pictures which would be Warner Television, Warner Brothers Movies and Lorimar. We think there is going to be an enormous appetite for American programming, and who better to do that than Time Warner. We look at that as a huge opportunity. Our only fear now, Strat, is that there will be some trade barriers erected over there that will diminish our ability to do that. Quotas, a lot of which exist now. I would hope that we could knock down those barriers.
End of Tape 1, Side B
SMITH: We are on Tape 2, Side A of the oral history interview with Richard Munro on June 6, 1990, at his offices in the Time-Life Building. Is it going to be the Time Warner Building?
MUNRO: No, the Time Warner Building will be across the street where the old Warner Building is. We are going to rename that the Time Warner Building. This will remain the Time-Life Building, primarily magazines.
SMITH: I see. Dick, earlier in the interview, I got diverted from recording some of your personal background and interests. To complete this record, at least this interview, I would like to go back and ask you to mention some of the civic activities that you are most interested in and the reasons why.
MUNRO: Well, I think that Time Inc. as well as Warner Communications both have a long history of social responsibility, and a recognition that businesses should be more than profit-making entities. Mr. Luce set that tone in Time Inc. seventy years ago. I think most of the leadership of this corporation has always had a rather strong social responsibility--a social conscience--trying to put back something into society. I happen to have inherited that, not only from the company, but I guess perhaps from my family.
When I was a young man at Time Inc., I found myself getting involved in things like the United Way and things in my community. I have often scratched my head to kind of figure out what made me do this more than others, but nevertheless, I do. I happen to be a liberal which puts me in a very, very small minority in my line of work. I think Fortune magazine says that 4 percent of CEO's are Democrats or liberal-minded. I don't like labels, but I tend to lean in that direction rather strongly. When I became the CEO of Time Inc. ten years ago, I really had an opportunity to see if I could help my fellow man. When you get a job of the magnitude of being a chief executive officer, particularly in a company as prestigious as Time Inc., people flock to you particularly if you happen to be liberal, because most CEO's throw liberals out of their offices. I happen to welcome them.
SMITH: The "L" word as Bush would say.
MUNRO: Yes, exactly. I do carry an ACLU card. I'm a legitimate liberal. I think what that did was it brought a lot of people to my doorstep. I have a difficult time saying "no" to the underprivileged and the downtrodden of this world. I'm telling you more than you need to know, Strat.
SMITH: No, not really.
MUNRO: A little background here is essential. So, I found myself getting more and more involved in more and more causes, probably far too many causes. If I had to do it again, I would probably be a little bit more selective. So many organizations came in looking for support either personal support, financial support ... my personal financial support or the company's financial support. They found solace talking to me. I was receptive. I have always had a great interest in education all my life. I went to teacher's college at night while I was working here at Sports Illustrated, thinking someday I might end up in education. So, I had a long, legitimate concern about education. Now it's a fad. Everybody now is interested in education. But, I've been interested in education for thirty-five years. In minorities ... I have somehow or another always been involved in minorities, particularly the Black community. So, suddenly, I was encouraged to do this as a Time Inc.'er. I think one reason I got this job is because my predecessor, Andrew Highskol [???] admired and respected my social conscience. All that is kind of less-than-articulate background of how I get to your specific question.
I am very much involved in a number of organizations that I care a lot about. The United Negro College Fund, where I have been on the board for a decade now. I care a lot about those forty-three private, historically Black, colleges and will play a larger role now that I am semi-retired. That's very close to me, those colleges. I chaired the New York Urban Coalition which is an organization that Andrew Highskol???, my predecessor, was a founder of. They were founded back in the late '60s when there were the riots in New York. I assumed that chairmanship two or three years ago when suddenly there were more riots in New York. We did not know a lot in terms of reconciling racial differences in this country, much less this city. So, I have been involved with that group.
I am deeply involved in diabetes--two of my three sons are diabetics. So, I chair the Juvenile Diabetes Foundation. We are an organization that is funding research to find a cure for diabetes. I will be involved with that as long as I live, until we find a cure and my boys don't have diabetes anymore.
In terms of schools, I'm on a number of boards of schools that I have been involved with--three college boards and a couple of secondary school boards. I enjoy those thoroughly. I have been involved in the New York public schools where I was the initial chairman of the New York City Partnership Education Committee. I'm involved in the New York Council for the Humanities. I'm involved in some things I don't even know that I'm involved in.
But, I guess I care a lot about this. I think the point I would like to make, Strat, is that my colleagues here at Time Inc. encourage me to do this and enable me to do this. I think that's a very important point I would like to make. I felt it was part of my job to represent this company outside of this building in a number of areas, and I have just touched on a few. There are a whole bunch of others that I have been involved in or where I have represented this company. But, I was able to do that because I had an awful lot of strong colleagues here who both encouraged it and enabled me to devote the time to it. There were times when I said to myself, "I'm doing more of this than I should be doing." Even though we are a highly decentralized organization, there were times when I thought, "By God, I should spend more time running Time Inc." Colleagues were helping me run Time Inc. very well, and we were thriving. Now there were times, some years, in my ten-year stint as CEO where I gave up the outside activities, because there were problems inside and I recognized that what enabled me to be influential outside was a successful Time Inc. If Time Inc. became less than successful, then I wasn't going to be able to do these other things. So, it was a balancing act. I tried to do the best job I could running this company, but also tried to find as much time as I could to devote my energies to outside interests. I've rambled on there, forgive me. I'm not even sure if I have answered your question, but that's a starter anyway.
SMITH: No, we are very interested in developing a record of these activities. I noticed in looking at a press release type biography of you, a number of honorary degrees from universities. With your permission, I'll have it printed in the record and won't ask you to repeat all of them. But, I noticed most of them were Black, and then I saw the Negro College Fund thing, and tied the two together.
MUNRO: Yes, I'm not sure that they are all listed there either. Some of them got lost in the rounding. I think one of the great thrills of my career has been giving commencement addresses at small Black colleges where it is literally a thrilling experience to see whole families come up and get their diplomas. These are all southern Black colleges, and they are all pretty much in poor cities and poor areas--rural and urban. They are kids who have made enormous sacrifices to get a college diploma.
(Break in tape)
My father was sort of a maverick--I think he was before his time. He came from a relatively wealthy family, and he was the black sheep of that family. Kind of an introvertish fellow who spent a lot of time really being Robin Hood. He supported a whole bunch of families in upstate New York that I mentioned earlier. My parents were divorced. I lived with my mother, but I used to visit my father who lived nearby. I remember, he would stop by one of his several houses ... I'm sure he kept a number of families alive.
He remarried later in life and moved to Florida. He married a southern woman in Vero Beach, Florida, as a matter of fact. She's a wonderful southern lady who owns a major orange grove there, but who treated Blacks as most southerners treated Blacks. My father treated Blacks as equals. In that environment, it is always fascinating because he would call Blacks "sir." In rural Florida, a Black was a nigger, and that was exactly what he was. They weren't mistreated, but they were inferior people and they were treated that way. My father used to aggravate the hell out of my step-mother and everybody else by treating Blacks as equals. Somehow or other, that got into me. Often as you get older, I think, you sometimes spend a little time in reflection. I never spent much time on reflection. But, I sometimes wonder what put this in me, because I have a lot of that in me. It must be in my genes--obviously comes from my father. But, I can't pinpoint a specific time when I became concerned about Blacks. My whole life I have been concerned with the underdog. There is the less than privileged, and I grew up not privileged. Even though the Munro side of my family had a lot of wealth in it at one period of time, that never got to my generation and I worked my way through college. I worked as a kid, and my mother worked to support us. We were people of modest means. It is a fascinating question. I will never know the answer to it. I have given you the best I have, but I will always care for the people who don't have much which is why I am a liberal.
SMITH: Must have been some feat for a liberal to get to the top of the Time organization.
MUNRO: Well, we were a Republican company, and God knows, Mr. Luce was about as Republican as you can get, and about as conservative as you can get. Even a lot of my colleagues here are mostly conservative. Not all of them, however. We have a few here who share my feelings.
SMITH: I would assume just from your general remarks that Time-Life has been at least in the last ten years if not before.
(Break in tape)
SMITH: ... college fund. Did they come to you and ask you to support them?
MUNRO: I really don't remember. It could have been that way. Most things happened that way. I think the word gets out, "Oh my God, there's a Democrat over there at the Time-Life Building. Let's go see him." I think that's probably how it happened. Probably Chris Eddly at one time--a decade ago--came to Paul and me and wanted to know if I could become involved, and I jumped at it, I suspect. I don't recall that specifically, Strat, at all.
SMITH: I think your story of delivering these commencement exercises at these colleges is exciting. I just wondered how you might have gotten started. Why they started to invite you to do it.
MUNRO: Well, I think most of my category of people who are on the United College Fund Board, and there are several businessmen that are on it--Joe Williams, now of Warner-Lambert, is the chairman--I think most of us get invited to do this occasionally, not all the time, but occasionally we get invited to do it. I wish I could do it every year. I did it every year for a number of years, but the last couple I haven't.
(Break in tape)
SMITH: That's all right.
End of Tape 2, Side A