If you could see a favorite film on your television set for under $5 by just dialing the phone, would you still go to the video store to rent a cassette?

Probably not. That's what video-rental store owners are worried about.

Pay-per-view, the service that requires consumers to pay for one program at a time, is being hailed as a threat to home video.

A recent issue of Video Magazine describes how pay-per-view works and why it has video retailers and VCR owners in an uproar.

The pay-per-view box, called an addressable decoder, is linked directly to the pay-per-view service. Viewers receive a monthly guide that lists PPV programming by time and channel. By calling a toll-free phone number, the viewer makes a selection from the available programming. At the appropriate moment, the channel on which the program is appearing will unscramble. When the show ends, the channel is scrambled again.

The down side of PPV for the home viewer is the monthly selection of films is limited to the PPV catalog. Also, at $3.95 to $4.95 a film, plus rental costs for the decoder, PPV is more expensive than renting videocassettes.

Though it's presently possible for viewers to tape PPV from the TV with a VCR, plans are in the works to encode PPV transmissions with Macrovision, a process that prevents off-the-air taping. This would mark the first time a legitimately bought-and-paid-for program, sent over the public airwaves, could not be videotaped - something some factions believe is contrary to the Supreme Court's landmark 1983 ruling that videotaping for private use is legal.

Video retailers have made their position clear: All PPV transmissions should be encoded with Macrovision or some other process to prevent home videotaping.

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