This paper analyzes the state of competition in the pay cable industry. The analysis conceptualizes competition in pay cable and discusses the current structure of the pay cable industry and the competition for subscribers and programming. The competition for audiences that pay cable faces from both pay-per-view services and the video cassette recorder (VCR) is also reviewed. Future speculation on the competitive structure of the pay cable industry is included in a summary analysis. The paper concludes that the continued diffusion of the VCR, coupled with the expansion of the pay-per-view industry, adds to the competition for audiences between the communication industries. Three figures are included, and 42 references are appended. (MS)