Broadcasting Telecasting (Oct-Dec 1963)

Affiliates bask in good-business glow CBS RADIO 80-90% SOLD OUT; PAYMENTS WILL DOUBLE ESTIMATE In an atmosphere reminiscent of pre-television network radio conventions, the CBS Radio affiliates held their annual meeting last week and got glowing reports on the immediate past, the present and the future of their network and of their prospects as affiliates. It was without doubt the happiest of the 10 annual conventions held thus far by the CBS Radio Affiliates Association. It was also the biggest turnout of CBS radio affiliates in history — 296 representatives of 133 of the 222 affiliated stations. ■ Arthur Hull Hayes, president of the CBS Radio division, got the meeting off on a pleasing note by advising the affiliates that, thanks to a strong sales surge, their total payments from the network this year will be more than double what was estimated when the new payment plan was announced a year ago. ■ The stations were told that network time has been 80% sold out since March, on the average, and that in some weeks it has been more than 90% sold out. Officials said privately that sales — with three months to go — are 47% higher than total sales in 1962. The network, which has verged on black ink for the last couple of years, will definitely operate at a profit for 1963 (see page 33). ■ A new sales presentation, aimed at "dispelling outmoded concepts of radio as an advertising medium," was unveiled and appeared to generate unusually warm enthusiasm among the affiliates. ■ The affiliates were given an economic analysis to warm the cockles of any advertising salesman's heart: that a $2 billion, or 15%, increase in advertising expenditures may be needed in 1964-65 to push living standards up to where they ought to be, and that the 1963 advertising level of $13 billion may need to reach $29 billion a year by 1974. The convention, held Tuesday and Wednesday in New York, also was told by CBS President Frank Stanton that broadcasters must use — but not abuse — the right to editorialize (see ards. Even the most ardent critics of network commercial practices concede the resurgence has developed into one of broadcasting's biggest comeback stories. The current pace of business looks page 84), and heard CBS News President Richard S. Salant attack "checkbook journalism," or what he called the growing practice of buying exclusive rights to hard-news stories (page 84). "Today we look back on a year of unprecedented success and ahead to a future that seems very rosy," Mr. Hayes said in his keynote report. He attributed the gains in large measure to years of experimentation in the development of "a network product that does what network radio can do better than any other medium — move information to the public with unbeatable speed and accuracy and provide intimate, warm personality entertainment for the housewife in the morning hours." He said radio has been and still is underpriced, and that despite the CBS Radio network's recently announced general rate increase (Broadcasting, Sept. 9), "none of us are receiving a commensurate rate of return for what we offer." Mr. Hayes cautioned, however, that although the recent increase won't be the last, "as we raise our rates we must give full value, continually experiment with our programs, be open for new ideas." Stations, too, must continue to improve their local programing in order to continue expanding radio's values and its audiences, he asserted. Sales Surge ■ In his address, according to reports from the closed meeting, Mr. Hayes also stressed the continuing surge of network sales by noting that payments to the affiliates in the second half of this year will be 137% higher than originally estimated for this period. He anticipated questions about the effect that CBS Radio's increased lineup of affiliates might have on individual station payments. The network currently has 222 affiliates, as against 204 a year ago and 213 in 1960. Mr. Hayes assured the affiliates that the longer lineup would not impinge on payments, which are based on "CSU's" — commercial sponsor units — sold and carried. He also anticipated another ques doubly remarkable against the background of the middle and late 1950's. With TV's soaring rise, network radio business was sliding so fast, and had already slid so far, that there was open speculation over whether any network tion that reportedly was discussed further by affiliates in their private session, when no network officials were present: whether overcommercialization is involved in the use of three commercials on 10-minute newscasts. Mr. Hayes reportedly told the affiliates that, in the opinion of authorities, the commercial pattern does not exceed code limits. One network proposal that officials had hoped to bring to a decision by convention time was a suggestion that the affiliates clear an additional 95 minutes a week for network sale. The proposal, reportedly developed in cooperation with several affiliates, was submitted in a letter a few weeks ago. Not Enough Answers ■ But, Mr. Hayes reported, according to participants in the meeting, that only half of the affiliates had replied, and that although almost 80% of these approved the plan and less than 5% specifically opposed it, the network did not propose to act without more complete returns. He urged the stations to submit their answers, one way or the other. The plan would increase some five-minute newscasts to 10 minutes, add another 10 minutes of news Monday through Friday, add a review of the week's news on Saturday and reclassify the Alexander Kendrick news report as network time. The appeal to affiliates is that, if sold, the extra network time would increase their network compensation. The general economic analysis, coupled with an admonition to "stop underestimating your sales potentials," was presented by Arno H. Johnson, vice president and senior economist of J. Walter Thompson Co., New York. New Money ■ To utilize the increased productivity and growth of the labor force, Mr. Johnson said, "over $220 billion must be added to personal consumption in the United States in the next decade (from $370 billion in 1963 to over $590 billion by 1974, a 60% increase), and some $55 billion must be added to private investment for new plant and equip would survive. They still don't like to admit it, but it was widely believed that if one network would take the initiative and close down, at least some of the others would quickly— and gladly — follow suit, but 34 (BROADCAST ADVERTISING) BROADCASTING, October 7, 1963