The bus broke down, but the show goes on

Shoestring budgets, low ratings, travelling the land in a beaten- up bus in search of an audience. That's life for the pioneers of cable programming. Where's the future in it? Maggie Brown reports

It is 7pm, and the three men who pioneered live bargain- basement cable television in Britain are watching Mike Morris, the veteran former TV-am presenter, sign off.

For two hours he has been hosting a phone-in for Wire TV, in which viewers in cabled homes around the UK call up an expert lawyer for free advice.

Morris, on screen continuously, works without anything as basic as an autocue: he could be conducting a radio phone-in, except he can't scratch his nose. When you are making television for £1,500 an hour there are no frills.

"We are cheap tarts," says Steve Timmins cheerily. Along with his partners, Derek Nelson and Jim Manson, he runs CST Productions from part of a converted church in the media village of Clifton, Bristol. But they are rueful, sad even, about the latest turn of events.

For two-and-a-half years, after beating off rival bids from LWT and Granada, they have been running Wire TV (annual budget £5m) for a group of major cable companies, the CPP1 consortium. Wire is a national service: it is received in some 70 per cent of the one million cabled homes. It was the offspring of cable operators desperate to give their networks a live edge to differentiate them from the Sky satellite channels.

But it hasn't really caught on so far, and their experiment of launching a cable-only channel, to which £25m was committed by the cable companies, mainly American telecommunications groups, ends in May.

The cable companies have sold Wire to Live TV, Mirror Group Newspapers' cable television venture, which has earmarked some £50m for its expansion into new media businesses. The investment should vastly improve the product. But will it deliver a significantly larger audience?

The three musketeers at CST remain to advise on how to set up local versions of Live TV - Live Birmingham, Live Liverpool, for example. They have spent most of the day in Birmingham, conferring with Midland Independent Newspapers, first in line to launch this June.

Great hopes are riding on Live TV, which has recruited 182 people, some of the best in the business. They will provide a backbone service to local operators. But channels relying solely on cable for distribution face huge problems. They are not for the faint-hearted. They don't make immediate economic sense.

The channel receives about 25p per home a month for supplying the service: that gives Wire an income of at best £2.5m a year. Even with Wire's modest costs of £5m, there was a big gap, though admittedly they did not attempt to plug it with advertising revenue.

After tearing up their first ITV-style programme schedule, Wire tried to inject a note of local interest by converting a bright yellow bus into an outside broadcast unit and touring the country, spending a week at a time in a variety of franchise areas. As if symbolising the death of these ambitions, the vehicle is grounded outside Bristol with a broken axle.

Jim Manson, who devised the programming, said they discovered that people were prepared to play fun competitions, with prizes of Darth Vader masks, CDs and books, and respond to phone-ins. But there have been serious doubts about the quality of the programming.

Joyce Taylor, programme director of United Artists, which championed the Wire concept, says that since the Mirror group is prepared to sink double the funds that CPP1 was, "it has got to be a better channel". However, "as a programmer I am disappointed. The cable industry is putting £6bn into the ground. It must look more closely at the money spent on the products which give that hardware any value. The industry needs to market itself as an entity."

Programme-makers in the cable industry lay the blame for cable's poor performance at the door of the operators, the companies that own the infrastructure. They are predominantly North American telecommunications groups, which, the programmers say, are only interested in selling telephone services, on which they expect higher profits. "It's like asking BT to run Channel 4," says one.

Richard Horwood, executive director of Mirror TV, is the business brain behind the venture. He says that Wire is finished, but that it has a key asset, the £500,000 network of compressors to receive the signal serving 70 per cent of cabled areas. "That's not a bad starting point."

He thinks Live has stacked the odds in its favour by recruiting top talent, such as Janet Street-Porter and other experts in "yoof" programming.

"You can't do television cheap. You do it the least expensive way," he says. That means live programmes.

Julian Aston, managing director of Channel 1, Associated Newspapers' cable "electronic newspaper" venture, has just celebrated (if that is the word) 100 days on air, servicing 300,000 cabled homes in London. (Its annual programme budget is £9.5m, spread over 24 hours a day: less than £2,000 per hour, comparable costs to those of a radio programme.) He sounds battle-weary. Discussions are advanced about setting up a special cable ratings system to measure the minute audiences (50,000 is large) that the Barb system, used by terrestrial television, fails to register.

Asked about the scope for profits, he responds with a dry chuckle. "This is a very long-term business - it will only show profits seven or eight years away. The break-even costs are very high for a very small audience." Before launch last November, he estimated it at three to four years.

But ambitious newspaper groups are driven by the imperative to diversify. Once Live TV starts, the Mirror group becomes a multi-media company, an altogether sexier animal in the eyes of investors.

All newspaper groups with television ambitions are boxed in. The Government's cross-media ownership review will produce only a small concession: stakes in ITV can be a maximum of 29.9 per cent, hence the attraction of cable. And although the cable television channels discussed here are designed exclusively for cable, they offer the opportunity to build up expertise ahead of bids to run Channel 5, which must be in by 2 May. That may be the real target of the new cable programme-makers.