Broadcasting (Oct - Dec 1950)

IN A 1932 interview, H. V. Kaltenborn (2d I), dean of news analysts, talks with the man who soon was to lead the world into World War 11. The other correspondents at the interview were Karl von Weigand (I), chief correspondent, Hearst papers, and Louis Lochner, chief correspondent for AP in Berlin. * * * voiced by the company's president, Edward Plaut, that "this year the more established forms of advertising will not prove as effective as the unusual forms like radio." Recorded Show Ban Lifted by NBC Politics also contributed to radio's income during this Presidential election year. On the national level the Republicans spent something between $400,000 and $500,000 for the re-election of President Hoover, the Democrats about $300, 000 for his opponent. Franklin Delano Roosevelt, with perhaps $750,000 worth of radio time purchased by both parties in support of local and regional candidates. To encourage spot business for its owned stations, NBC lifted the ban on recorded programs during the daytime hours ouside of New York. CBS continued its policy of lea%ing the matter up to the managers of its individual stations. Pan American Broadcasting System was organized as a "wax network" with the aim of including 100 stations. Combined network gross time sales for the year totaled $39,106,776, according to National Advertising Records, a gain of 9.29c from the year before. Overall gross time sales for the industry, network, spot and local, wei'e estimated at $61,900,000, up 10.5 from 1931. Politics brought problems as well as profits to radio. The Nebraska Supreme Court ruled that broadcasters were accountable for libel "published" over their facilities just as newspapers are responsible for what they publish. This dictum was handed down in a suit brought by C. A. Sorenson, attorney general of Nebraska, against KFAB Lincoln and Richard A. Wood, an attorney of that city, for statements made by Mr. Wood over KFAB during the 1930 primary campaign. The jury in the lower court exonerated KFAB from responsibility after the station had explained that it had no advance script of Mr. Wood's talk, did not know it was going to be defamatory and in any event was prohibited from censoring the talk under the federal law. Mr. Sorenson had appealed and the appellate court had now ruled the station operator absolutely liable. The case was subsequently appealed to the Supreme Court of the United States, which declined to review it. Couzens-Dill Measure Passes in Senate In January the Senate passed the Couzens-Dill resolution asking the Radio Commission to sui^-ey advertising on the air, the educational use of radio and also to report on the feasibility of government operation. James W. Baldwin, Commission secretary, sent questionnaires to networks, stations, advertisers, agencies, radio educational groups, government agencies, foreign radio interests, etc. Shortly before the investigation started, Broadcasting had reported that the Commission's own records refuted arguments that more educational radio facilities were needed. Of the 44 educational stations, 17 sold time and about 30 of the 83 stations licensed to schools, churches, municipalities and charities also were operated as commercial stations. Overall, the educational stations actually devoted less time to education, under SCf, than the commercial stations, which on the average gave more than 10% of their operating time to educational programming. NBC and CBS ReportHoldings to Congress To set Congress straight about their holdings, NBC and CBS wrote to each Congressman, reporting that the 87 stations in the NBC networks included five owned outright, a half interest in WMAQ Chicago, two stations owned by General Electric Co. and operated by NBC and four West Coast stations in which the network had recently purchased majority interests; that CBS owned five stations, plus 51% of KMOX St. Louis, and was operating WPG, Atlantic City's municipal station, under lease. Both networks stated that their affiliated stations determined their own policies and that their affiliations with the networks did not deprive them of ample time for local programs, NBC adding that it had no written affiliation contracts. In March, William S. Paley and his associates bought the halfinterest in CBS which had been held by Paramount Pictures Inc. for a sum reported to be more than $6 million, giving this group complete o\\Tiership of the network (in 1950 a $50 million property), which had been purchased by Mr. Paley and a family group from Columbia Phonograph Co. in 1928. In the intervening time CBS had gro%\Ti from 16 outlets to 91. During 1931 the network had bought seven concert companies and merg ed them as Columbia Concerts Corp. to assure a supply of musical talent for network programs. A proposal to tax stations as a means of defraying the cost of governmental administration, with fees ranging from $120 a year for 100 w stations to $5,000 for 50 kw stations, was introduced in the Senate, but died in committee. A new revenue bill that became law in June, however, included a 59f tax on land lines and a o% tax on receivers. NAB protests finally secured a ruling exempting broadcasters from the land line tax on their interconnections. The tax on sets stuck, and broadcasters were told that they would have to pay 3% tax levied on all commercial users of electricity which the NAB had opposed as not applicable as broadcasters should be classed as industrial users, who were exempt. ASCAP continued as a major and unceasing problem throughout the year. The broadcasters all wanted a standard license arrangement but were divided as to how it should be calculated. NAB favored a rate card basis; the small stations, few of them NAB members, voted in a survey conducted by A. S. Clarke, WBTM Danville, Va., for a formula based on percentage of gross sales, with 2.5% set as about the right amount. Mills Becomes ASCAP Manager E. C. Mills left NBC's Radio Music Co. to become general manager of ASCAP. The NAB named Louis G. Caldwell, former Radio Commission general counsel, as special counsel on copyright. With four copyright bills before Congress and Sen. Dill preparing another one, the House Committee on Patents began holding copyright hearings. Gene Buck, ASCAP president, told the committee that of ASCAP's income of about $2 million a year, radio contributed some $900,000 and the movies about $700,000, with about $400, 000 coming from dance halls, caberets and other places of amusement. He charged radio with having killed the sale of phonograph records and sheet music. Appearing for the broadcasters, Mr. Caldwell asked Congress for protection against abuses of power by copyright owner combinations and against penalties for innocent infringement, such as that by a station broadcasting a network program or a hotel receiving a broadcast. The Copyright Act made no distinction and called for a minimum penalty of $250 per infringement. ASCAP in April offered stations new licenses to run from June 1, 1932, to Dec. 31, 1935, with commercial fees of 5% of the stations' gross income and a flat sustaining fee, ASCAP to have the right to examine station recoi'ds. When NAB rejected the proposal, estimated to increase ASCAP's take from radio to about $3.5 million a year, ASCAP agreed to put off the starting date for the new licenses until Sept. 1, while discussing a revision of the teimis with a special copyright committee of NAB with Paul Morency, WTIC Hartford, as chairman. Schuette Picked to Head Copyright Fight NAB circularized, all U.S. stations asking their ideas about the ASCAP proposed license, retained Oswald F. Schuette to head the copyright fight. Mr. Schuette in 1928 had organized the Independent Broadcasters Assn. to combat the Radio Commission's plan of deleting 164 stations and had succeeded in reducing the number of deletions to 30, none of them IBA members. Urging broadcasters to see that legislation checking ASCAP is passed immediately. Broadcasting editorialized: "It is well and good to negotiate and arbitrate with ASCAP. . . . Broadcasters do not desire to dodge the payment of any license fee to ASCAP. They simply want the rate to be equitable. With a legislative club over the head of that pool of the order proposed and which can be adopted, a reasonable rate could be assured. Without it the result is ob\aous." When broadcaster pressure on Congress showed signs of producing revised copyright legislation, ASCAP offered a new plan which would increase the present fees by 25%, making a total of $1,250,000 a year, to run through 1933 while negotiating for a permanent settlement, with the broadcasters meanwhile dropping their fight for new copyright legislation. NAB proposed instead to accept the 25% increase for two years while a joint NABASCAP committee worked out a per piece license system. ASCAP in turn rejected that offer and broke off negotiations, stating it would deal individually with stations on the 5% plan. Negotiations resumed, ASCAP made a final offer of a three-year license on a sliding scale, 3% for (Continued ou page 76) BROADCASTING • Telecasting October 16, 1950 • Page 73