Broadcasting (Jan - Mar 1949)

Vol. 36, No. 1 WASHINGTON, D. C, JANUARY 24, 1949 $7.00 A YEAR— 25c A COPY RADIO'S NET: $402 MILLION 1948 Up 7.7% Over 1947 By ROBERT LUCE RADIO'S NET REVENUES passed the $400 million mark in 1948, according to estimates published in the 15th Annual Broadcasting Yearbook, now in the mails to subscribers. Representing an annual dollar gain of more than $25 million, the index shows a 7.7% increase over 1947, reaching an estimated total of $402,826,000. Total net time sales were divided as follows : 40.5% local time sales 33.1% network time sales 24.7% spot sales 1.7% regional network sales Local time sales, which exceeded network time sales for the first time in 1947, continued to do so in 1948 gaining 10.5% in volume during the year. Spot sales showed an 8.6% gain from 1947, increasing the dollar total by about $8 million. Network sales, which gained only .8% in 1947, increased by about $6 million to show a gain of 4.6%. (See chart.) These are the principal conclusions of the 15th Annual Business Index, which is based upon an extensive sampling of all types of radio stations throughout the United States. The 1948 gain of 7.7% is not as impressive as the 1947 gain of 12% — but measures up favorably to the 1945 and 1946 increases. In 1947, net time sales increased an even $40 million. Since 1941, radio's net revenues have doubled, and the radio industry has taken on a tremendous physical growth. The outstanding characteristic of the postwar radio revenue picture is the tremendous increase in local time sales. In 1941, local sales were half as large THIS is a report on Broadcasting's 15th Annual Business Index, which appears in the 1949 Yearbook, now in the mails. The estimates of net time sales are derived from information supplied by several hundred AM, FM & TV stations throughout the United States. Broadcasting's formula has produced figures accurate to within .3% in past surveys. The method of compiling net time sales estimates was developed for Broadcasting by Dr. Herman S. Hettinger, noted radio economist. BROADCAST ADVERTISING 1935-48 MILLIONS OF DOLLARS 175 150 125 100 75 50 25 0 M Local CKB> Network am> Spot — ' — Regional — i— i— r-r 1 1 1 1935 1940 1945 1948 as network revenues from time sales — eight years later, local sales exceed network sales by about $30 million dollars (see Table I, page 58). Spot business has also continued its steady growth in 1948. It has doubled since 1941 in dollar volume, and has increased by onethird since the end of the war. Network time sales have gained, but less rapidly, since 1945. The gain in 1947 was .8%. The gain of 4.6% is the greatest of the post war years for the networks, though it does not approach the record wartime gains of 21.6% and 22.5% in 1943 and 1944. Regional networks showed another decline in 1948 — following a pattern established in 1946 — when the decline was 3.1%. This year's decrease is estimated to be $400,000. The total decline in revenues in this category is nearly $2 million since 1945. State of the Industry These figures show a continued healthiness in the overall radio revenue picture. To be sure, no sensational revenue gains were made in any category — but in each case, the gains are sufficient to cause satisfaction with radio's 1948 sales performance. Despite some signs of approaching downturn in business generally, the time has not yet come when radio's major sources of revenue have declined — or given indication of doing so. There is some indication of a slower growth than the average for the past decade. Unless there is an actual decrease in spot, network or local business, however, such a moderation in the rate of increase is nothing to cause alarm. The opinion of those in the radio (Continued on page 58) BING TO CBS Near Million for 25% of Crosby BING CROSBY, around whom ABC built its powerful Wednesday evening lineup, last week joined the parade to CBS. In an announcement issued in Hollywood, where its board chairman, William S. Paley, had gone to conduct final negotiations with Mr. Crosby, CBS said it had acquired the ★ crooner's services for both radio and television. In addition to an employment contract with Mr. Crosby, which presumably will run for the sevenyear maximum period permitted under the California statutes, CBS also is understood to have acquired approximately 25% of the stock in Crosby Enterprises Inc., which holds the star's personal service contracts for motion pictures, radio and other services, as well as other entertainment package operations. While there was no disclosure as to the amount of CBS' outlay to consummate the Crosby ti-ansaction, it is believed the acquisition of the quarter interest in Crosby Enterprises entailed less than $1 million. Widespread reports that CBS had paid in excess of $2 million for this interest and that Paramount had or would acquire the remaining three-fourths in Crosby Enterprises for $6 million could not be confirmed, and were regarded as pure Hollywood & Vine speculation. The present Crosby package on ABC under Philco sponsorship runs in the neighborhood of $30,000 weekly. The CBS contract, like that entered with the Jack Benny company, contains a minimum guarantee for Mr. Crosby — prob BROADCASTING • Telecasting ably in the area of $7,500 a week — for his personal services. Such factors as program rating and commercial sponsorship, it is believed, will have a bearing on the Crosby compensation for the contract's duration. While it is logically presumed that Philco will continue sponsorship of the Crosby show over CBS, these negotiations were not completed last week. A number of other prospective sponsors, according to reports, have also talked with CBS. Likewise it is not certain that the switch to CBS will have to await expiration of the present Philco contract. If Philco continues sponsorship, it was thought possible that the program might shift prior to next fall. Whether the Crosby program (Continued on page 54.) January 24, 1949 • Page 21