THE AUTHORITATIVE INK NEWS SERVICE FOR MANAGEMENT OF THE VISUAL BROADCASTING AND ELECTRONICS ARTS AND INDUSTRIES MARTIN CODEL, Editor and Publisher ALBERT WARREN, Senior Editor ROBERT CADEL, Business Manager DAVID LACHENBRUCH, Associate Editor GERSHON FISHBEIN,'Trade Reports Editor Editorial Associates. Paul Stone, William J. McMahon, Jr. with ELECTRONICS PUBLISHED WEEKLY BY RADIO NEWS BUREAU WYATT BLDG. WASHINGTON 5, D.C. TELEPHONE STERLING 3.1155 V 0 L. 12 : N o. 18 SUMMARY -INDEX OF THE WEEK'S NEWS - May 5, 1956 ALLOCATIONS DISCUSSED by FCC, no agreement reached. CAPEHART ASSETS SOLD to principals of Gross Distribu- Plan to make eastern U. S. all uhf in 10 years to be tors, who plan to continue brand name. Admiral examined, along with deintermixture (p. 1). plans big production push in 3rd quarter (p. 11). NO ANTI -NETWORK ACTION by Congress or FCC likely RECORD RCA PROFIT, SALES reported for first quarter- this year, despite Bricker's blast, but Justice Dept. con- earnings of $12,727,000, sales of $27,848,000. Gen. tinues quiet probe of network program control (p. 1). Sarnoff foresees $2 billion volume by 1966 (p. 15). EDUCATIONAL TV eyed enthusiastically by underdevel- NEW VHF STARTERS: WRGP-TV, Chattanooga, and KDWI- oped countries; Uncle Sam willing to aid worthy proj- TV, Tucson. Elmira uhf WTVE returns to air after 19 ects with foreign aid dollars, expert advisors (p. 3). months, bringing on -air total to 469 (p. 8). SECOND -RUN MYSTERY: Why did "A Night to Remember" POLITICS ON TV: Eisenhower to make 5 or 6 TV speeches, hailed by critics as TV landmark-take 10 -point Democrats open bids for $2,100,000 in network TV - rating dive in widely ballyhooed re -run (p. 4)? radio time; Magnuson promises political probe (p. 8). WORLD RADIO CIRCULATION now exceeds daily news- COURT OF APPEALS upholds Shreveport Ch. 6 grant. papers for first time, reports UNESCO, noting 41 % Storer seeks shift of uhf KPTV, Portland, Ore. to Ch. 3, increase in 5 years. NBC surveys European TV (p. 5). channel to come from Salem (p. 10). FCC "INFLUENCE" PROBE by House Small Business Com- VIEWING CONDITIONS and proper lighting reviewed by mittee assailed by GOP Committee member as "im- American Optometric Assn., which frowns on too -great proper" and politically motivated (p. 5). room -screen contrast, too close sitting (p. 10). FCC DEBATES ALLOCATIONS; NO AGREEMENT YET: FCC continued allocations discussions this week, still hasn't agreed on anything. Looking into every idea proposed to date, on May 8 it plans to examine concept of moving all stations east of the Miss- issippi to uhf in 10 years -- in addition to taking another whack at the deinter- mixture channel shifts debated last week (Vol. 12:17). No one at Commission predicts with confidence what will finally be agreed upon. At the moment, however, odds seem to favor the issuance of proposed rule - making on the deintermixture theme -- but you'll find few willing to predict that deintermixture finally will be adopted when rule -making is concluded. Prospects of the "move -everyone -to -uhf" idea are even more uncertain. None- theless, it's considered conceivable that plan could be issued as a proposal, with industry invited to submit comments on it as well as on deintermixture -- but the chances of its ultimate adoption are regarded as extremely small. Whatever FCC does propose eventually, it's expected that parties filing com- ments will be required to go into extensive detail to back their positions, and that some oral testimony may be required. Estimates as to how long the whole proceeding would take vary tremendously. "Fall" is earliest date mentioned for final action, while some prognosticators visualize something taking years. Senate Commerce Committee Chairman Magnuson (D -Wash.), meanwhile, says he's asked his staff to prepare report for him on the committee's whole allocations -uhf investigation. "I don't know if we'll issue an interim report," he adds. "We'll decide after we read the staff report." CONGRESS ANTI -NETWORK ACTION UNLIKELY: Despite Sen. Bricker's "monopoly" charges against. CBS & NBC (Vol 12:17) and their impact on the industry, Capital realists feel there's little chance of any Congressional or FCC restrictions on the networks this year. Anti-trust action may be something else again -- the Justice Dept. is. "investigating" networks, and at the moment nobody knows what will come of this. At-azlance rundown of 3 -pronged govt. investigation of networks indicates these prospects, as of today: COPYRIGHT 1956 BY RADIO NEWS BUREAU www.americanradiohistory.com - 2 - (1) Congressional response to Sen. Bricker's charges has come mainly from a few crusading Democrats. His own Senate Commerce Committee is understood to be far from convinced by his report on the networks. Certainly it will take no action on his controversial network -control bill until after network presidents tell their side of story next month. With Congress aching to go home by July 15, there seems to be little time for action -- even if there were any inclination. (2) FCC will probably sit tight on any network actions until its own study committee makes its final (and probably only) report -- not due until July 1, 1957. (3) Justice Dept. is actively investigating anti-trust aspects of network control over programs, as revealed by chief trust -buster Stanley N. Barnes last March (Vol. 12:5). Its agents currently are collecting information from independent TV film producers and distributors in Hollywood. Justice Dept. has conferred with Senate Commerce Committee staff TV investigators. But the department works in silence -- and there's absolutely no telling whether it will act at all. Only network chieftain to make direct reply to Bricker's charges was CBS president Frank Stanton, who called them "utterly without foundation," accusing the Senator of being "highly selective in his choice of 'facts'." How can CBS be a "monopoly," asked Stanton, when it owns less than 1% of all TV stations, receives only 3.2% of national advertising dollar, 20% of TV advertis- ing dollar, and its programs occupy less than 17% of all U.S. station -hours? "As is known to even the most casual observer," he stated, "the field of TV networking is one of the most intense competition -- not only among the 3 TV net- works but between TV networking and all other national advertising media...." He accused Bricker of presenting "grossly inaccurate picture" in his account of network profits, of ignoring conventional share -of -market yardstick to determine existence of monopoly. By using profit figures as percentage of investment in phy- sical facilities, Bricker has "ignored the fact that through the end of 1952 CBS in- vested a total of $53,100,000 in TV networking without earning a penny in profits." CBS -TV network's profits in 1954, after taxes, were only 4.6% of sales, he pointed out -- compared with average of 6.1% for 3000 leading U.S. companies. On other hand, profits of 377 independently owned TV stations averaged 9% of sales, he said, giving these examples of average station profits in selected markets: Detroit (3 stations) 22%, Milwaukee (3) 21%, Boston (2) 25%, St. Louis (4) 22%. CBS's three owned stations' profits averaged 23% of sales. "We estimate that in 1954, the total net profits of 7 independently owned affiliates exceeded the net profit of the entire CBS network," he said. NBC chose to keep silent, but at April 28 Washington banquet celebrating 10th anniversary of Meet the Press (Vol. 12:17), pres. Robert W.Sarnoff dwelled heavily on the contribution of networks to TV service and public interest. He pointed to networks' functions in keeping public informed on vital issues and enriching cultural life -- sometimes at heavy cost in elaborate sustaining pro- grams. "Our constant aim," he said, "is to increase the size of this discriminating audience and to help raise the general taste to higher levels..." "Yet this nationwide network service is still less than a decade old," he continued. "Considering its youth, its record of progress is, I believe, impressive. No other program source and no other medium can even approach the scope, variety and volume of daily services provided by the networks. Their schedules include the best of the stage and screen; the sports arena; concert and lecture hall; the news- papers and magazines; the pulpit and university; plus many forms unique to TV. "The task of the networks is to satisfy the diverse tastes and interests of a nationwide public; and their success depends on the public's voluntary acceptance of what they offer. The extent of this acceptance is indicated by the fact that within 10 years, the public has bought over 37,000,000 TV sets; and has brought into being a major industry which has grown faster than any other in American history." ABC officials, too, declined direct comment on Bricker's report -- but v.p. Ernest Lee Jahncke reiterated that "regardless of the subject under discussion, the www.americanradiohistory.com -3 - way to solve TV's biggest problems is to solve the question of access to markets; there must be 3 competitive TV channels in each major market, so all networks may compete on an equal basis." Presidents of the 3 networks are expected to present extremely detailed tes- timony next month before Commerce Committee. Meanwhile, investigation chief counsel Kenneth Cox and communications expert Nick Zapple spent week in New York, presumably gathering material for network probe, following up their recent west coast trip. Sen. Bricker plans to present new network financial figures at hearing next month -- based on FCC's 1955 profit data.