Broadcasting (Jan - Mar 1949)

TV COSTS Operations Analyzed in Study FLEXIBLE formula for calculation of annual operating costs of television stations is provided in Chapter 3 of the NAB's continuing study of TV. Titled "Basic Economics, Operating Costs," the chapter is part of a project titled "Television: A Report on the Visual Broadcasting Art" [Broadcasting, Nov. 1, 1948]. Charles A. Batson is in charge of the study, authorized by the NAB board. His first chapters were completed last summer and were reviewed at the series of NAB district meetings [Broadcasting, July 26, 1948]. Cost components for two types of transmitters and four program sources are detailed by Mr. Batson in Chapter 3, which carries forward the first two chapters on construction costs. Minimum Cost Average minimum operating costs are calculated for a mythical TV station. The costs total $356,000 a year for metropolitan stations using film, network, studio and remote program sources 31% hours a week plus test pattern transmissions, a total of 50 hours. A "two-by-four" formula, similar to formulas for construction costs, can be used to show annual operating costs slightly over $100, 000 but this is a highly restricted operation with a community class transmitter and no program source other than network. Maximum operating costs are calculated in detail as high as the individual broadcaster may wish. One major formula and a supplemental labor cost chart are provided by Mr. Batson for calculation of operating costs. The major formula, which can be extended by adding the time factor not present in construction tables, provides a detailed method of figuring in advance what any type of television will cost without reference to income. General, administrative and sales costs are prorated among departments and program sources. The specimen calculation of $356,000 a year is based on these items (average annual minima) : Transmitter (50 hours per week) $55,000 Studio-Transmitter Link 3,000 Program Nucleus 13,000 Network (14 hours per week)— 80,000 Film (7 hours per week) 65,000 Remote (7 hours per week) 60,000 Studio {3Vz hours per week) 80,000 Annual Total $356,000 Chapter 3 of the study consists of 22 pages of text. It points out that TV operating costs as high as $1,000 a day are not uncommon, WIOD led the field in coverage of the fabulous war time market... and, now it holds its leadership by literally saturating this, the greatest of all "normal" markets! National Representatives GEORGE P. HOLLINGBERY CO. Southeast Representative HARRY E. CUMMINGS JAMES M. leGATE, General Manager 5,000 WATTS . 610 KC All WIOD-AM programs are duplicated on WIOD-FM without extra cost to advertisers Page 58 January 17, 1949 with some twice that amount and even higher. Future chapters of the study will cover building stations, operating stations and programming, among other topics. This operation is a metropolitan class station employing all four program sources as indicated by this table, the 50-hour schedule comprising 31 hours programming and the rest test patterns. Specimen operating costs are listed herewith for the transmitting plant and the programming plant : OPERATING COSTS A Specimen of Annual Expenses TRANSMITTING PLANT COMMUNITY (500 W) Depreciation $12,500 Maintenance Supplies 3,500 Personnel 6,500 Power and Water 1,500 Miscellaneous 1,000 Total $25,000 50 Hours Per Week METROPOLITAN (5 KW) Depreciation -i $29,000 Maintenance Supplies 13,000 Personnel 8,000 Power and Water 3,000 Miscellaneous 2,000 Total $55,000 50 Hours Per Week STUDIO-TRANSMITTER LINK Depreciation $2,200 Maintenance 800 Total $3,000 PROGRAMMING PLANT And Prorated Expenses for General, Administrative and Sales Purposes NETWORK 14 Hours Per Week Woven into 28 Hour Schedule Connection Charge * $42,500 Sustaining Features 22,500 Program Total $65,000 PRORATED SHARE OF OVERHEAD t $15,000 Total $80,000 FILM 14 Hours Per Week Woven into 28 Hour Schedule Depreciation $6,000 Maintenance Supplies 1,500 Personnel 15,000 Film Rentals and Purchases 73,000 Rent and Power ^ 2,500 Miscellaneous 2,000 Program Total $100,000 PRORATED SHARE OF OVERHEAD t $15,000 Total $115,000 7 Hours Per Week $65,000 NUCLEUS Depreciation $2,000 Maintenance 500 Personnel 10,000 Miscellaneous 500 Total $13,000 STUDIO 7 Hours Per Week Depreciation $14,000 Maintenance Supplies 10,000 Personnel 40,000 Production (other than staff) — 55,000 Rent, Power & Miscellaneous— 6,000 Program Total $125,000 * Under the NBC Contract, on which these network computations are based, this is not a cash expense. The network is given thirty free hours of commercial time per month in Ueu thereof. However, since this practice is not necessarily followed by all networks, a sample figure, based upon an hourly rate of $300, is shown here for illustrative purposes. BROA PRORATED SHARE OF OVERHEAD t $15,000 Total $140,000 354 Hours Per Week $80,000 REMOTE 14 Hours Per Week Depreciation $12,000 Maintenance Supplies 10,000 Personnel 33,000 Telecasting Rights 36,000 Vehicle Operation, Maintenance & Storage 2,000 Program Total $93,000 PRORATED SHARE OF OVERHEAD t $15,000 Total $108,000 7 Hours Per Week $60,000 t Assumes joint operation with an existing aural station. WARREN SALE Approved by FCC ACQUISITION of WREN and WRRN-FM Warren, Ohio, by the Tribune Co., publisher of the Warren daily Tribune-Chronicle, at a purchase price of $300,000, was approved by FCC last Thursday. The stations were established and have been operated by Nied & Stevens Inc., owned in equal shares by Perry H. and Lucy S. Stevens, and Frank T. and Evelyn A. Nied. FCC was told that Mr. Nied, manager of the station, is ill and unable to continue the operation and that the other stockholders are not available to take over direct management. WRRN, founded in 1941, is on 1400 kc with 250 w but has a construction permit for 1440 kc with 5 kw fulltime. It is affiliated with Mutual. WRRN-FM is slated to take the air in June. The Commission had designated the transfer application for hearing to determine whether control had already been transferred without FCC approval [Broadcasting, Jan. 10]. On its own motion last Thursday, however, the Commission reconsidered and approved the transfer. WHEN Paul Dixon, WCPO Cincinnati disc m.c, became ill just before a broadcast of his 1230 Club Sammy Kaye, who was to be Mr. Dixon's guest, volunteered to do the program. Mr. Kaye went on the air and proceeded in true disc jockey style. r e cording? 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