Broadcasting Telecasting (Jan - Mar 1951)

NBC Affiliates ( Continued from page 15) reached cost. On this measurement AM can prove increased rates are more in order than any decreases." Here is a condensed version of the confidential booklet sent to affiliates in TV cities by NBC. The last page of each booklet was specially prepared to show impact of the rate reduction on the station to which the document was sent. The condensation follows : The NBC plan to cut evening radio rates (6-11 p.m.) in TV cities, to reflect TV's impact on radio vaUies, proposes no rate changes in other time classifications but present ratios between evening and other rates would no longer exist in the case of affected stations. NBC explained it had four basic principles in drafting the plan. First, NBC desired to calculate TV's effect on TV families included in the station's evening audience, rejecting the theory that all TV families should be subtracted from the radio audience. Continued Listening Second, NBC credits the station with continued listening by TV families and rejects the theory that a TV family does no evening listening. Third, a "reasonable limit" is placed on the amount of indicated rate reductions so radio stations in TV cities can survive economically and continue rendering valuable service. Fourth, NBC uses a prospective base for TV circulation to provide stability in the radio rate structure. Explaining why a rate reduction is needed now, the NBC statement cites these reasons: To maintain radio network operations on a sound economic basis; to hoM many important accounts in jeopardy under present rates; to break the log jam which is blocking new sales and to get sales momentum rolling. As to the advertiser's position, NBC claims that sponsors "know that TV has caused a sharp decline in listening in metropolitan markets" and some of its clients are asking for a radio network bypassing TV cities — "which we have refused to do." Besides, rate cuts 5946 Total Radio Radio Only are sought by sponsors to reflect diminished listening in TV cities. Sponsors are holding back on evening radio network buying, NBC warned, and unless rates are cut they will further curtail use of the medium. Radio-only as well as radio-TV users both feel this way, the network explains, because they don't want "to buy waste circulation in metropolitan markets." Radio advertisers also in television, NBC notes, are watching their TV rates go up as TV circulation grows and figure this contraction of the radio audience is not reflected by a radio rate cut. Taking up the decline in network sales, NBC argues that sponsor resistance to evening l'adio at present rates "is reaching the danger point and is threatening the economic stability of network radio." All networks are effected, and all have "substantial amounts of onen evening time," according to NBC. Furthermore, new evening time sales have virtually dried up, the network laments. This trend of several years is shown in charts. The first traces total evening homes listening to radio from 12,240,000 in 1946 to a peak of 14,384,000 in 1949 and down to 13,024,000 in 1950. Daytime listening rose from 6,766,000 homes in 1946 to 8,803,000 in 1949 and 8,506,000 in 1950. Evening listening is much below the 1947 level now, according to NBC. The downward trend is even sharper on the basis of evening SO IT'S IMPACT YOU WANT! See Centerspread This Issue ON THE AIR EVERYWHERE 24 HOURS A DAY WCKY CINCINNATI 10,000 WATTS OF SELLING POWER listening to all four networks, according to another chart, ranging from 10,894,000 homes in 1946 to 12,255,000 in 1949 and 10,771,000 in 1950. Major part of the decline in evening listening has occurred in metropolitan markets, dropping 9.2% for the country as a whole from the beginning of 1949 to the beginning of 1950 compared to an 18.2% decline in metropolitan markets. The trend in radio homes as compared with television homes is shown in another chart (see this page), revealing fewer radio-only homes than at the beginning of 1945. Another chart shows that sponsors bought 199:25 hours on the four networks in 1948, 177:40 hours in 1949 and 172:20 hours in 1950 (third week of October each year). It will be even worse in 1951, the network fears. Network 'Health' Seen Network radio can be restored to economic health by means of full advertising support if rates are adjusted, NBC argues in a chapter titled "A Rate Adjustment to Unfreeze Network Sales." Substantial investments in improving NBC's evening programs were made in 1950, it is stated, and sales efforts "have been intensified to the maximum" along with promotion activity. Sales will continue to drop unless evening network radio is again attractive to advertisers, in NBC's opinion. A decline would hit the quality of programming whereas a rate cut which stimulates sales will permit high-quality commercial program service "against which you can sell spots and chainbreaks," the NBC statement continues. Normally the strong program schedule would have been sold, NBC claims. "With sales unfrozen, the network and its affiliates can receive the maximum return from NBC's improved programming, its intensified sales activity and its enlarged promotion," it is stated. Full weight has been given to ways of avoiding a rate cut, such as curtailed TV expansion because of mobilization and the influence of excess profits taxes in enlarging advertising expenditure, NBC informed its stations. These aren't enough, NBC claims, to start the swing back to evening radio. NBC explains in detail its method of reducing rates, estimating TV circulation as of Oct. 1, 1951. The cut in total network evening rate is 11%, compared to 15% proposed by ANA and many advertisers, based on Jan. 1, 1951, TV circulation. NBC's Oct. 1, 1951, TV figure is 13,500,000 sets in markets affected by the radio rate reduction compared to the 8,600,000 figure used by advertisers. Advertiser-proposed cuts, in the case of certain station rates, would run as high as 35%, 45% and 55%, according to NBC, with a 25% limit on NBC's reductions. ANA's July 1950 study, says NBC, "calculates the effect of television by subtracting all TV families in the station's area from its radio audience. The resulting percentage reduction is rounded to the next lowest 5% and applied to the station's rate to obtain the reduced rate." NBC Illustration Illustrating, NBC cites a hypothetical case assuming 500,000 radio families in the nighttime coverage area of Station X, with 200,000 owning TV sets and 375,000 (757c of total) listening to the station and constituting its evening BMB audience. ANA assumes the 375,000 BMB families own all of the 200,000 TV sets and the other 125,000 own no sets, according to NBC. ANA subtracts all of the TV families from the station's BMB audience to get a percentage cut. In this case, ANA would delete 200,000 TV families from the 375,000 BMB families, getting a percentage reduction of 53.33%. On the other hand, says NBC, it would scatter the 200,000 TV sets among the 500,000 radio families. Under this formula, the 375,000 BMB families (75% of 500,000) own 150,000 TV sets (75% of 290,000). Before subtracting the 150,000 TV families from 375,000 BMB families, NBC credits the radio station with a 25% factor representing radio listening by TV ***** Constant service of Highest type will Net sponsors INCREASED SaLES IN HALIFAX NOVA SCOTIA JOS. WEED & CO. 350 Madison Ave., New York, (Rep.) 5000 WATTS-NOW! Page 64 • January 1, 1951 Telecasting • BROADCASTING