Broadcasting (July - Dec 1941)

IilR©AP€AiTDINIC CLTLcL Broadcast Advertising MARTIN CODEL, Publisher SOL TAISHOFF, Editor Published Weekly by BROADCASTING PUBLICATIONS, Inc. Executive, Editorial And Advertising Offices National Press BIdg. O Washington, D. C. Telephone — MEtropolitan 1022 NORMAN R. GOLDMAN, Business Manager • BERNARD PLATT, Circulation Manager J. FRANK BEATTY, Managing Editor • W. R. McANDREW. News Editor NEW YORK OFFICE: 250 Park Ave., Telephone PLaza 5-8355 BRUCE ROBERTSON, Associate Editor • MAURY LONG, Advertising Manager CHICAGO OFFICE: 360 N. Michigan Ave., Telephone CENtral 4115« s. j. paul HOLLYWOOD OFFICE: 1509 N. Vine Street, Telephone GLadstone 7353 • DAVID H. glickman Subscription Price: $5.00 per year — 15c a copy o Copyright, 1941, by Broadcasting Publications, Inc. Pincers — Radio Version TO THEIR CHAGRIN, broadcasters are learning that pincer movements are being deployed in radio regulation as well as on the battlefields of Europe. For what else is that multi-sided attack, striking at purported chain monopoly, newspaper ownership, multiple ownership and even discriminatory taxes? Oldtime defenses, designed to stave off recurrent waves of a frontal attack, are outmoded as against the pincers technique, which employs thrusts in one direction and another with spearheads ultimately converging on an objective. An entirely new defense technique, founded on mobility, has to be developed. Broadcasting is confronted with precisely that sort of opposition. Unless it develops an effective counter-offensive, it is going to give a little ground here and a little more there until finally a substantial chunk of its prerogatives has been surrendered. The present tax situation is typical. The broadcasting industry commendably aroused the support of all advertising media in the allout fight against the proposed Federal tax of 5 to 15% of radio's net time sales of $100,000 annually and over. Even FCC Chairman James Lawrence Fly hove onto the scene before the Senate Finance Committee, and urged elimination of the tax as it appeared in the House bill. But he countered with a proposal for a franchise tax on a "cost-of-regulation" basis which would nick the broadcasting industry for about $1,000,000 a year instead of an estimated $5,000,000 minimum in additional taxes. Sprung as it was, the idea for a franchise tax has developed considerable support in Congress, and perhaps some within the industry, because from the dollars standpoint it represents a substantial savings over the sales tax proposed. The opening wedge was used to promote the compromise tax plan. Without belaboring the pros and cons of a franchise tax, it nevertheless is interesting to appraise the procedure being employed in evolving the plan. Chairman Fly indicated the other day that he was planning to call in industry representatives for a roundtable discussion of the proposition, and that he thought something in the nature of a "cost-of-regulation" levy could be worked out. As we remember our elements of Government administration, the Constitution specifies that all tax or revenue-raising legislation originates in the House. Where then does the FCC ac quire the right to start the ball rolling on any sort of revenue measure? The tax situation is no different from the chain-monopoly inquiry or the newspaperdivorcement foray or a half-dozen other maneuvers initiated by the FCC under its present regime. All fall in the category of new legislative activity, a function specifically denied administrative agencies and exclusively reserved to Congress. The impact of war will result in increasing restraints and pressures upon all industry, radio included. But the intiative should come from those arms of Government to whom the responsibility is delegated, and not through improper assumption of power by subordinate agencies. Radio's Bottleneck A CRITICAL situation exists today in standard broadcasting because of the defense situation. The flow of raw materials for the manufacture of technical broadcast equipment, from microphone to transmitter, has virtually stopped. Even more serious is the fact that tubes and parts for maintenance purposes are not being produced in sufficient quantity to meet demand. For 1942 the outlook is practically a blackout. Priority rating is the core of this predicament. A telegraphic survey made by Broadcasting of the equipment field yields the same story — manufacturers cannot get materials and as a consequence men and machinery are being diverted to other defense pursuits favored with essential priority ratings. When present meager stocks are used up, broadcast operation will be in for a siege of gradual deterioration unless remedial steps are taken. Six months ago [Broadcasting, May 5] we undertook our first manufacturers' survey. The situation then was serious. The result was an improved priority rating (from B-7 to B-3) for broadcast equipment. But that hasn't meant a thing, because practically no materials have been allotted outside the Class A ratings reserved exclusively for defense pursuits. Almost every day there appears new evidence of the reliance placed upon broadcasting by the Government as an essential arm of defense. More and more time on the air is being used by Government agencies to further the defense program. The Defense Communications Board has evolved plans to use the entire structure for air-raid warnings, morale TO TAKE THEIR PLACE By HARRY BANNISTER Sales Manager WWJ, Detroit WITHIN the last fortnight we entered about $1,000 worth of weekly broadcasting on our books, all from two accounts. One is a newcomer to radio and the other covers an item never before advertised over WWJ. This incident is cited because in my judgment it is symptomatic of current developments on the business side of broadcasting which will affect every station, whatever its category. We in the broadcast advertising business are today faced with conditions reminiscent of the pioneer days in that we are compelled to tap new fields and explore markets hitherto untouched, if we are to prosper or even to hold our ground in the period ahead. For all those interested in the volume of advertising, the problem centers around the obvious fact that the country is prosperous as never before, but the exigencies of national defense necessarily are directing all this activity into channels that do not touch or affect advertising, except by indirection. After all, there is no need of advertising tanks or dive bombers, excepting maybe that the English would like to know where some could be procured— in a hurry. Furthermore, in order to properly mobilize our great productive facilities, manufacturers everywhere are concentrating on defense materials, with consequent curtailment or total abolishment of goods for ordinary consumer Use. And many of these curtailed or abolished items have been furnishing the backbone and sinews of commercial broadcasting. So, what's to take their place? The degree to which we seek and find a satis(CoJifmued on page 30) building, handling of communiques and announcements in the event of military emergency. Plans are under way for power increases to assure maximum coverage both day and night. The FCC is granting construction permits for new stations regularly, and power increases with other improved facilities no longer are rarities. Thus an anomolous situation exists. How can new stations or improved facilities requiring practically new installations be placed on the air if the equipment is not available? Looking a few months ahead, how can facilities be maintained at maximum efficiency at the time they are most essential if parts, replacements and tubes are not being produced? DCB, functioning closely with the FCC, has done an excellent job of planning mobilization of broadcasting for M-Day. But that portion of the job is utterly futile unless it is backstopped by production lines turning out the very equipment upon which the DCB's blueprints are patterned. The manufacturing industry is at wit's end in attempting to procure the essential priorities covering material, men and machines through regular OPM channels. If the Government is interested in perfecting i its radio defense plans, then it seems to be up to the DCB and the FCC, as well as the military establishment, to see to it that broadcast equipment production lines begin moving again at full pace. Page 30 • September 8, 1941 BROADCASTING • Broadcast Advertising