Broadcasting (July - Dec 1936)

c fars and the hew report retred to by the committee of emiit engineers gives the figure of j;2,000 as the cost of those items ;id'ental to the transmitting plant y without accounting for one ' my to cover studios or other essary investments." jr. Spearman, like the Clear lannel Group, drew heavily upon , financial statements filed by :tions with the FCC to cover isiness done by various station raps. He used these in building his argument that superpower .tions would be forced to go er the business of regional stains in order to increase their renue because of the heavy instment and operating expense. ! Asking what will be the result clear channel stations operating ith 500,000 watts, Mr. Spearman itinued : 'It will mean the financial ruin ; such stations or else it will ban that these stations must incase the amount of business done them to offset these losses. This ings up a practical question. Will sis necessary amount of additionbusiness done by them come om new business, from increased vertising budgets, or will it come Dm regional stations, and if from gional stations, what effect will ^je depletion of their revenues ve on them? *' "We have been unable, after dil|ent search, to find where the ftst amount of new business will fme from. This question is of ch momentous importance that j.e Commission should never au'.orize the operating of 500 kw. 'ear channel stations until it has ien satisfactorily answered and to tte no such satisfactory answer jis been made, nor is such satisS ry answer being attempted. The acts are that until this question definitely and conclusively angered, this Commission cannot ; ssume to say that such new busies will offset these extraordiary out of pocket losses and it 'iust necessarily conclude that if ach clear channel stations secure 'lough business to offset these 'teavy losses, it must come from ncreased rates, greater participalon in advertising budgets and KIRO S E ATTLE IOOO Watts 7IO KC kiro looie says: L 'Our figures please the eye and fit the budget' from regional stations. No facts have been pointed out and none have been found by us indicating that advertisers are going to increase their budgets by anything like the percentage necessary to leave their existing business on regional stations and add a sufficient sum to take care of the losses incident to the operating of 500 kw. stations and pay a reasonable return on the investment of the owners of these stations. Survival of Fittest IN THE final analysis the question of what to do about 500 kw. stations is to make a decision that such stations will not be permitted, or else to look for a fight to the death and finally for the survival of the fittest as between regional and clear channel stations. Such a fight will not help either. "This is especially true of national spot advertising. If 500 kw. stations are authorized, these stations are going to do their dead level best to sell the national spot advertiser on the theory that the covei'age which he will get from using these 500 kw. stations is so great that they can afford to pay the increased cost and they do not need regional stations now used by such national spot advertisers to reach the American public. "If 500 kw. stations continue in the future as they have in the past to carry chain or network programs, it follows as a matter of course that the rates for carrying . these by 500 kw. stations must be severely increased. Further, Mr. Spearman said that 500 kw. stations would go to the advertiser and agency to sell them on the idea that their coverage is so great that regional stations within their service areas will not be necessary to secure complete coverage. He cited the technical testimony in behalf of NARBS in connection with signal strength of 500 kw. stations. "If half the national spot business and half the chain business now carried by regional stations should move over to 500 kw. stations, and this percentage of movement and more would probably take place in short order, it is seriously doubted that it would offset the losses incident to the operation of 500 kw. stations. What is more important, our investigations disclose that if anything approaching this percentage of chain and spot broadcasting should move from regional stations to 500 kw. stations, it would destroy the economical status of regional stations and cause them to operate at a loss if their continued operation could be carried on at all in many places." "Life or Death" THE FACTS indicate that the stake of the regional stations in this question is great and that it may mean life or death economically to them, he said, adding that if the Commission authorizes 500 kw. stations the investment will have the practical effect of "freezing development along current lines and will act as a positive and im NATIONAL REPRESENTATIVES John Blair & Co. NEW YORK DETROIT CHICAGO SAN FRANCISCO You can tell 'em in English — They'll understand. 85% of the population of this section of Western Montana is American born. 1000 Watts HT £ Missoula 1260 Kc. Mlk^P W \W Montana Columbia Broadcasting System Affiliate portant impediment to future progress along such technical lines." Concluding with his argument on duplication of stations on clear channels, Mr. Spearman said that if duplicate operation is allowed that stations of such powers as have been operated successfully for many years be authorized. In other words, he recommended that the duplication should be with 5 to 50 kw. stations depending on the comparative need for stations in the key communities. "We submit that the operation of these stations on clear channels should be provided for in view of the facts that their operation would not limit or interfere with any worthwhile service now being rendered; would make for a greater use of facilities and less waste in their use; would tend to relieve interference to regional stations and generally expand and improve their service, and generally improve radio service by providing a greater number and greater variety of programs to a much larger population than could be done in any other way. The proposal is sound socially and economically and these are of primary importance. It is, of secondary importance, technically feasible." On Cross-Examination UNDER cross-examination, Mr. Spearman revealed that the regional group was not asking for a "horizontal increase" to 5 kw. on all regional channels as such. In response to a query by Mr. Craven, he said that his group favored revision of the rules so that the power limitation of 1 kw. at night would be removed and that applications thereafter should be considered on their merits. He said that if regionals go to 5 kw. there would be no marked effect on locals. He pointed out there was no complaint from locals when regionals were increased from 1 to 5 kw. during daytime. Responding to questions submitted by Louis G. Caldwell, counsel for the Clear Channel Group, Mr. Spearman said the associat.on was opposed to 500 kw. stations and that with respect to WLW he was not in position to say whether the association favored the reduction to 50 kw. status from its present 500 kw. since that matter had never been discussed. He said WLW is operating experimentally as a 500 kw. station. There were further questions from Mr. Caldwell regarding the operating costs of regional stations and the increase that would result from the proposed horizontal boost. Mr. Spearman, however, contended that the figures used were not comparable. To the question put through Mr. Caldwell as to what "specialization o f function" h e would assign as the function of clear channel stations, Mr. Spearman replied that the question was "unintelligible". Mr. Caldwell announced that he was satisfied with the answer. Mr. Spearman concluded with the statement that by virtue of his examination of the financial statements of clear channel stations filed with the Commission, there were several such stations which "couldn't make the grade" financially to cover the 500 kw. operation. The total of some of these stations, he said, would not be sufficient to pay for the technical cost of 500 kw. A GOOD Radio Station Geu BETTER Cherry & Webb Broadcasting Co. PROVIDENCE R. I. • Becomes a BASIC COLUMBIA station on January 1. • Now a Mutual and Inter-City affiliate. • FREQUENCY 630 KILOCYCLES. • Excellent coverage of the rich Rhode Island trading territory . . . most densely populated state on the continent . . . one of the wealthiest areas in all America. • Splendid studio equipment, organ and talent facilities. Bargains Available to Shreivd Buyers NOW! • Rate advances become operative January 1, 1937. • Contracts made now effective to August 31, 1937. • Schedules still flexible but filling rapidly. Wire or write for availabilities Station WPRO Representatives PAUL H. RAYMERC0. New York ■ Chicago • San Francisco r BROADCASTING • Broadcast Advertising October 15, 1936 • Page 75