Broadcasting (Jan - June 1941)

I iiiii ferent network programs, he pointed out, it would mean that each of the stations would have to pay the line charge from the Twin Cities, the terminal point. Whereas it is now possible for the stations to split the charge and therefore make it economically feasible, he said it was clear that the expense of separate rate hauls would be onerous. Mr. Caldwell, however, held that an eventual solution might be to have the several networks share the line costs. But Senator Gurney said it was his judgment the upshot would be that Bismarck would not get the program service. Bismarck couldn't pay it and the network wouldn't pay for that long a haul, he said. When Mr. Caldwell observed that he felt the rules would mean more commercial programs, Mr. Gurney said he thought the result would be that the "ante to the advertisers" would be raised. Returning to his recital of the MBS history, Mr. Caldwell said the network went through a major crisis in 1939 with the organization ti of the ill-fated Transcontinental. Because this operation attempted to tie up stations on MBS under exclusive contracts, he said MBS was forced into a similar move. Mr. Weber interposed that Transcontinental was organized largely at the instance of "an advertising agency" j and that Elliott Roosevelt was its nominal head. Prorating of Charges Suggested by Weber When Senator Wheeler reopened the line charge situation, to inquire whether costs would not be prohibitive with various stations on a particular route taking different network offerings, Mr. Weber declared there were two possible solutions. He said in many cases I:' MBS has used temporary lines to I outlying points and that if the business warranted, regular commercial lines were leased. Secondly, he said (that networks sell in groups and [Offer discounts which make it at, tractive for advertisers to buy the [groups. He thought that line charges readily could be prorated ! among the stations and the net; works. Senator Gurney, however, recited : that advertisers now must buy particular station groups on given networks as a whole or not at all, pariticularly where long hauls are involved. Senator Clark observed that ■ if all stations could share the line hauls and get additional network service, the prorated basis might work out acceptably. He said that several stations in Idaho are nonnetwork because the line charges are prohibitive. Resuming his testimony, Mr. Caldwell pointed out that because of the hold of NBC and CBS, many areas are blocked out and MBS is forced to operate on a "second mortgage basis" in a number of cities. Of the 170 stations of MBS, 104 are 250-watt locals, only one is a clear channel and one is a "semiclear channel". Total income of MBS, he said, amounts to less than the net profit of either NBC or CBS. Recent FCC figures [Broadcasting, June 9], he said, show MBS operating at a loss, but he said this was simply a bookkeeping deduction, since the network operates on a cooperative basis and the stations themselves make the profit. Buildup of Stations By ISetwork Service Denying that MBS in any way instigated the monopoly inquiry, he reviewed briefly the proceedings before the FCC. During oral arguments last December, he said, MBS suggested several proposed regulations, about half of which were reflected in the final result. But NBC and CBS, he contended, did not take the FCC's proposed regulations seriously and did not respond with alternative sets of proposals. Both the exclusivity and time option provisions of the rules, Mr. Caldwell recited, will affect MBS operations. But the other rules do not materially affect its service, he said. Reopening the exclusive affiliation provision. Senator Clark observed that if programs are placed on stations which have been regularly affiliated with the major networks over a period of years and which have been built up on sustaining programs, the new network would get the advantage of time made valuable by "your competitor". Senator Wheeler disputed the contention that the networks build up stations. He said that a station's status depends largely upon management and upon local programs. Stations which use spots every three or four minutes tend to cheapen themselves, he contended. Mr. Weber argued that stations actually "pay for that build-up". The other networks, he said, take a percentage of card rates for such promotional service. He argued that dual network service does not create confusion. Some 30 stations on MBS also take NBC-Blue, he stated. The World Series incident again was reopened when Senator McFarland (D-Ariz.) asked why stations in Phoenix did not carry the last World Series. Mr. Weber said he could produce a tremendous sheaf of requests from stations for the (Continued on page i.2) ^ Oclock News WITH Now available for sponsorship — a real opportunity for an astute advertiser. NEWS ! !— North — East — West — South — from all corners of the globe — the Associated Press, United Press, and International News Service gather the news — news of the important events the world over. From this kaleidoscopic array of history-making, civilizationwrecking, nation -destroying evidence, NORMAN BARRY, NBC star announcer, chooses the most vital items and presents them to the listeners of Station WENR. NORMAN BARRY has appeared on well-known programs sponsored by General Mills, Procter & Gamble, Quaker Oats, Manhappan Soap, Kraft Cheese Company, Beaumont Laboratories, Acme White Lead, Morris B. Sachs, Blackstone Products, Bath-a-Sweet, Look Magazine, and the Chicago Motor Club. He Must Be Good ! 10 O'CLOCK NEWS with NORMAN BARRY and Station WENR, with its excellent primary coverage in 185 counties in Illinois, Wisconsin, Indiana, and Michigan, will bring you greater sales and profits with less effort in America's second largest market — Chicago. Phone or write for detailed information about 10 O CLOCK NEWS with NORMAN BARRY and Station WENR with the assurance You Gef /More for Less on 50,000 WATTS 890 Kc. Chicago Key Station of the Famous NBC BLUE NETWORK Represented Nationally by NBC Spot Offices in NEW YORK BOSTON CHICAGO WASHINGTON OENVER SAN FRANCISCO HOLLYWOOD CLEVELAND BROADCASTING • Broadcast Advertising June 16, 1941 • Page 27