Weekly television digest (Jan-Dec 1963)

NEW SERIES VOL. 3 No. 17 TELEVISION DIGEST-7 MANUFACTURING, DISTRIBUTION, FINANCE INDUSTRY GROPES WITH RADIO RIDDLE: What's happening to radio? Why is it happening? What's the cure? Industry's top marketing minds ore pondering this puzzle, with little agreement — and not even many opinions. In an industry usually given to glib answers & voluble explanations, many are now just saying "I don't know." , At present, there's more mystery than misery in radio's sudden decline at marketplace — TV is sell ing well; phono sales are excellent; even radio's drop is large only when compared with 1962 (sales are only 3% below first quarter 1961), Inventories have been cut sharply in line with sales dip. Here are facts to date about domestic-brand radios: For first 16 weeks of 1963 (through April 19), distributor-to-dealer sales are about 14% below last year's similar period. For first qucxrter, sales totaled about 1,902,000, some 13% below the 2,177,998 of first quarter 1962. Jan, sales were off 20%, Feb. 13%, March 9%, compared with 1962, and preliminary reports for April indicate fall-off has increased from March. Factory & distributor inventories as of April 1 were down 13% from year-ago levels. Transistor radios are leading the decline — but it extends almost across-the-board. One set of estimates for first quarter has miniature radio sales down only 10% from last year's same period, personal size sets down 45%, AM table models down 29% and FM & FM clock radios down 18%. Industry production has been trimmed by about 25% from last year's figures. At same time, imports of transistor radios are setting new records. ' Imports, radio saturation, lack of profit, bad weather — all get at least partial blame as industry lead ers try to figure out what's really going on. They're frank to admit they have no pat answers — but here are some appraisals of situation from top manufacturers: One large radio manufacturer, who requested anonymity, blamed "competitive circumstances, the volume of merchandise on the market and the Japanese increasing their shore of the market." However, I he said, "no big trends are discernible and we don't regard the situation as basically serious from the long-term point of view." j Imports come in for major share of blame by Emerson Pres. Benjamin Abrams and others. Says 1 Abrams: "There's nothing the matter that couldn't be cured if we stopped importing Japanese junk. If 5 you include imports, radio business isn't bad as a whole. It has reached saturation because of low prices f in the transistor field. Our table & clock radio sales ore ahead of last year. But remember — if a person buys • an imported set at $5.99, he's out of the market for a $20 set. I see no change in the foreseeable future. The > only answer is in better sets. For example, our 9-transistor radio is doing well, although pocket sets are slow." "We've just hit a breathing spell following 2 good years," says an Admiral spokesman. If you include imports, a lot of radios are being sold, he adds. Conceding he can see "no good reason" for sudden dip. Motorola consumer products marketing vp S. R. (Ted) Herkes speculates that this year's bad winter weather kept consumers from "shelf-shopping." He adds that radio's an impulse item, but people buy TV regardless of weather. Motorola's radio business has picked up somewhat, according to Herkes. GE isn't seriously concerned, spokesman said, noting that 1962 was excellent year, and therefore slump isn't great when compared with previous years. He offers theory that dip may be seasonal and that some people are delaying purchase of walk-in-&-buy items for other larger purchases. )^,j Even Zenith's Leonard C. Truesdell concedes he's "puzzled." The pres, of Zenith Sales Corp. adds: 1 "I've said for years we were reaching saturation on radios — every kid in America has one — but I didn't I expect it to be this sharp." But he feels that if there's any sign of buying strike, it may be by dealers