HBO PLANS TO TEST NEW PAY CHANNEL

Hoping to tap a market of television viewers who earlier decided that they didn’t want pay TV, industry leader Home Box Office Inc. unveiled plans this week to test its third national pay channel.

The new channel, to be called Festival, will feature classic older movies, critically acclaimed current releases, popular foreign films and some original entertainment programs, the company said.

HBO hopes that Festival will appeal to viewers who earlier have opted not to subscribe to cable TV or to subscribe to only basic cable and not pay-television channels, said Larry Carlson, HBO senior vice president who will oversee the test. He added that the target audience for Festival “tends to be somewhat older” than traditional pay-TV subscribers and those who believe that existing services don’t “fit their tastes.”

Carlson estimated that the total potential Festival audience will be fewer than 1.5 million homes, about half the size of the Disney Channel pay service and well below the nearly 15 million homes subscribing to HBO and the fewer than 4 million homes taking Cinemax. (Bravo, another pay service that features foreign films and performing arts programming, has about 350,000 subscribers.) Festival will be “really small, comparatively,” Carlson said.

The new 19-hour-a-day network will get its test launch in March or April, Carlson said, on 8 to 10 cable systems owned by HBO’s sister company, American Television & Communications Inc., eventually expanding to as many as 20 systems around the country. No cable systems in Southern California are set to participate in the 9- to 12-month test, Carlson said.