Radio broadcast .. (1922-30)

The MARCH Why We Have Rumors of Mergers Recent Progress Made By Broadcasting What Is Right With Broadcasting WE INCLINE TO stress the unfortunate development of advertising halitosis in broadcast programs in the hope of encouraging a cure. Now and then, we should pause to admit the progress which is being made in the development of constructive broadcasting programs. We were especially pleased to observe the advertisement placed by B. J. Grigsby, of the Grigsby-Grunow Corporation, calling the attention of the general public to the growing hostility of sports promoters to radio broadcasting. Several prizefights, worthy of broadcasting, have been withheld from the air and it is understood that the last World's Series was the last to be broadcast by the leave of baseball magnates. The sporting world may continue to co- operate with broad- casting or not as it pleases. Failure to do so will only bring about a forcible dem- onstration that the public support gained by broadcasting has been of immense commercial value to sports. Sports promot- ers may, some day, be forced to seek the help of the micro- phone, now so freely presented to them. Then it will be the broadcast industry's opportunity to quote its usual rates. In the end, broadcasting will not be denied, even if broad- casting interests must stage their own contests for the benefit of the immense radio public. This idea may seem far fetched at the moment, but there is already precedent for such a suggestion. Five years ago, the motion picture world, the stage, and the phonograph industry were fighting radio. To-day, they have become an inextricable part of it through cooperation, merger, or outright purchase. Mr. Grigsby has performed a service in calling the emphatic attention of the public to the present situation but the fact remains, whether his plea to the sports industry is successful or not, that radio has progressed to the point that it cannot be denied. One of the bright spots in program progress is the more ambitious presentation of Damrosch's musical appreciation hours. They are a Friday morning feature, 11 to 12 Eastern Standard Time. Four courses are being conducted simultane- ously for students ranging from the third grade of public school to high school and college. A 68-page manual has been prepared for teachers which is a model of comprehensiveness and practical value, enabling instructors to conduct class work closely coordinated with Dr. Damrosch's presentations. Progressive dealers will sell substantial orders to their local Boards of Education on the basis of these programs. Another bright spot is the rapidly increasing roster of 50,000-watt broadcasting stations, of which WABC, WTAM, KNX, WLS, and KSTP are the latest additions, all of these having secured' construction permits from the Federal Radio Com- mission during recent weeks. To be classed as not such good news for broadcasting is the avowed purpose of WHNY, WGBS, and WCFL to upset the clear- channel principle by seeking assignments on channels as- signed exclusively to other zones. These cases are based upon the precedent established by WGY. We have gone into its ef- fect fully in previous issues and have been pleased that, so far, the WGY decision has not seriously disturbed the peace of the allocation situation. Despite the pressure in Congress for power limitations and the destruction of the clear-channel principle, we fail to see the logic of favoring 650 localities with local services, some of them with as many as twenty, covering in the aggregate only a small part of the United States, while every part of the country might be served with six or eight programs through a geographically equalized ser- vice of powerful broadcasting stations on exclusive frequency channels. Readjustments in the Industry ONE REASON that so much credence is given to rumors of mergers of leading radio manufacturers is because the merger is an inevitable evolution of the industry which must sooner or later take hold on a widespread scale. The general trend in all industrial and business organization is toward merger, consummated with the objective of increas- ing efficiency through combination of manufacturing facili- ties or of sales forces or of both. Other mergers are under- taken as a means of preserving uneconomic units individually unprofitable but valuable in combination with other success- ful units. The significance of mergers is best judged by the economies which they effect. Statistical analysis of mergers in all classes of industry indicates that more often than not the profits of thc c ° mbined units arc less than the tjCliV M sum °^ tne earn i n g s -sll of the individual units of which they are composed. In the long run, however, bigger and more efficient businesses are built up because such mergers gener- ally work out in practice to be the gradual discontinuance of inefficient and uneconomic units. The radio industry is full of such units. The number of set manufacturers is excessive. The concentration of business in the hands of a few leaders is becoming more and more marked, although numerous small units still function. In the long run, ten or twelve manufacturers will do the vast bulk of the business and it would not be surprising if, within five years, four manufacturers do eighty to ninety per cent, of the total radio business. At least one of these may well be a company not now an active or outstanding factor in the field. As the number of manufacturers narrows down, the value of the retail distribution franchise rises. Consequently, the dealer who concentrates on lines wliich will be a permanent factor in the industry, selected because of a long established record of leadership or because of outstanding engineering and sales ability manifested by an up and coming concern, is laying the basis for a permanent and valuable sales fran- chise. 90 • • DECEMBER 1929 •