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The of paid circulation
The surest barometer of readeracceptance of any publication is its paid circulation. Special people read business and trade journals for hard news and for ideas — tools of their professions or trades. They get their entertainment elsewhere (mostly from radio and television).
A paid subscription immediately establishes a contractual relationship between the subscriber and the publisher. The subscriber pays his money because he needs the publication to keep pace with developments in his own business. He is too busy to read those publications which do not meet his requirements, even if they come to him gratis. Thus, if reader interest is not sustained, paid circulation is promptly affected.
B*T for the Jan.-June, 1956 audit period averaged a paid weekly circulation of 16,401. This is the largest paid circulation in the vertical radio-tv field. B*T in fact distributes more paid I circulation annually than the combined annual paid of all other vertical magazines in this field.
B»T is a member of the Audit Bureau of Circulations — the only paper in our field to enjoy this privilege. The symbol below is your guarantee of integrity in reporting circulation facts to buyers of space.
There is no blue sky or unverified claims in B»T. That is why B»T is the basic promotional medium in the radio-tv field, with 25 years of loyal readership and paid circulation to back it up.
1955's actual broadcast revenue, which was slightly under $455 million, [editor's note: Actual 1955 revenue was $453.4 million, the FCC stated last week (see page 66).]
Despite the sustained good health of the overall total radio industry during 1955 and 1956, individual station results have varied widely. In both years, specific stations have experienced substantial expansion in revenues but generally this has been at the expense of other stations in the respective market. Moreover, stations which attract relatively large amounts of national spot business tended to show a better percentage improvement than stations relying almost entirely, or entirely, on local business. These trends will likely continue during 1957.
For 1957, total radio broadcast revenue could reach $500 million, but the more likely level will be in the vicinity of $490 million. However, if a general business recession gets under way by late spring and carries through to the end of the year, radio broadcast revenues could aggregate between $475 and $480 million in 1957.
Broadcasters do not live in an isolated world which is detached from general business. Basic business trends, throughout the economy, determine the long term trend and cyclical changes in broadcasting.
Underlying broadcast revenues are total advertising expenditures of the American business enterprises. Since 1950, all media advertising outlays have risen from $5.7 billion to $9.9 billion in 1956 — an increase of 74%. Both radio and tv have benefited from this growth in all media advertising outlays, even though they have shifted relative positions. In 1950, radio obtained 78% of total broadcast expenditures but, in 1955, tv absorbed two-thirds of the advertising dollars going to broadcasting (radio and tv combined) .
During 1957, we judge that at least $10.5 billion will be spent in all media advertising and tv should obtain approximately 15% of this all-media budget. Radio's share of these expenditures will likely be at 5.3% to 5.5%.
Dissected Business Picture
Breaking total 1957 economy into its component parts, we are of the opinion that the next 12 months will produce the following results:
1. Automobile production will be between 6V* million and 6Yz million cars; the first quarter should be very strong in auto sales with growing resistance thereafter and, consequently, enhanced competitive conditions during the latter eight months of the year.
2. Retail sales to run at no more than 2% (overall for the year) above 1956, with a noticeable decline setting in after late spring; the first three to five months should be reasonably strong.
3. Total construction activity should be about 5% higher in 1957, with the major influence coming from highway, public building, school building and industrial plant construction. Home (residential) construction has already contracted by 16% (1956 vs. 1955) and is now at a 5-year low. A further decrease will likely continue throughout 1957.
4. Gross farm receipts for 1957 will be higher than in 1956, even though net farm
income (adjusted for cost of living change) will be about the same.
5. Cost of living for the American public will inch upward.
6. Wage rates will rise by at least 10% during 1957 with improvements in fringe benefits. One year ago, the average American worker received $74 per week. Currently, the average worker receives nearly $83 per week and by the end of 1957 this figure will be in the neighborhood of $90 per week. We have experienced continuous wage inflation over the past six years and 1957 will push this inflation further. This is one of the recession making forces in the economy.
7. Industrial plant and capital expenditures will slow down and decline during 1957. During the past three years, the capital equipment expansion of American industry has been a strong force for recovery. Before the spring of 1957 has passed, we should see definite signs of reduced new capital expenditures. This is one of the most likely recession breeding forces in the economy. Even during 1956, expanded industrial facilities flooded the market with appliances, electrical goods, tv sets and many other similar goods. Along with the long established Crosley line, several other appliance manufacturers went out of production in the face of fairly acute production surpluses. Incidentally, plant and equipment expansion is seriously burdened by tight money market conditions.
8. Tight money market conditions will continue until the fall of 1957. The Administration is committed to "tight money" as an anti-inflation policy. There are no indications that the next several months will experience a change in this national policy. Obviously, "tight money" is being used to curb inflationary forces. Nevertheless, the same tight money situation retards many areas of business expansion. If business softens later in the year, we may find that lower interest rates will be used to curb a business decline and stimulate recovery. This change of money market policy cannot be expected until late 1957.
9. 1957 retail sales will likely be higher in dollar volume but about the same or lower in unit volume. Adjusted for seasonality, 1956 retail sales slid off during the early part of the year and then staged enough recovery to end the year at a slightly better level than 1955. Thus, 1956 sales made a new historical high, but it is significant that the rate of upward progress slowed down during the last part of the year. It is not unlikely that, after seasonal correction, the early months of 1957 may show a slight down trend.
Local radio revenue will tend to move with the fluctuations in retail trade.
10. Foreign trade will be governed largely by our willingness to extend international credit. Because of the Suez and Middle East crisis, there is already an enlarged demand for American oil, metals and other products. However, England, France and other nations do not have the dollars of foreign exchange to buy added American products.
We can have enlarged foreign exports to the extent that we Americans will pay for our own exports through increased international loans.
Page 52 • December 31, 1956
Broadcasting • Telecasting