Broadcasting Telecasting (Apr-Jun 1957)

ACTION ON ANTITRUST ABC ALTERS MUST-BUY POLICY ABC-TV has quietly dropped its owned station must-buy requirement for advertisers, but network authorities said last week that the move was not related to any antitrust questions that have been raised before Congress or elsewhere. They said the action was taken solely because experience had shown that the requirement was not needed — that ABC-TV advertisers buy the five o&o stations anyway. Moreover, they said, they treat their o&o's "just like any other affiliates." ABC-TV has not had a must-buy group of stations such as the two other networks have, CBS-TV's currently totaling 56 stations and NBC-TV's 58. Rather, ABC-TV has required that advertisers buy "a minimum cleared gross for station time equivalent to $50,000 per Class A hour." In addition, the old rate card carried this other proviso: "Advertisers are required to order as part of the applicable minimum the five ABC owned stations in New York, Chicago, Detroit, Los Angeles and San Francisco and any other ABC owned stations added during the effectiveness of this rate card." The new card, No. 7 [B«T, April 1], drops this provision and also boosts the minimum purchase from $50,000 to $60,000 per Class A hour per telecast. In comparison, CBS-TV's must-buy group totals $75,825 gross per Class A hour while NBC-TV's comes to $77,975. In addition, the NBC-TV rate card provides for a lowering of discounts for advertisers who use fewer than 100 stations, including the must-buy group, in prime evening time. The must-buy concept has been roundly challenged by network critics in hearings before congressional committees investigating network operations and practices. It has also been referred to by Asst. Atty. Gen. Victor R. Hansen as one area of network operation now under antitrust investigation. quired licensing of blocks of 39 each, except in two instances. The government not only asked the court to enjoin these alleged practices, but also to order existing contracts to be renegotiated. Spokesmen for the cited companies issued statements last week denying the government's charges. The gist of their statements was that none had ever refused to sell their features on a picture-by-picture basis, and that the package deals were of as much benefit to stations buying them as they were to the distributors. The Justice Dept.'s complaints, all reading virtually alike, explained the importance of film to television in these words: "Film plays a very important part in the programming of all of the 471 commercial television stations in the United States. These stations need film for use in programming a large portion of the approximately 5,000 hours per year during which they broadcast. Commercial television stations that are affiliated with a network obtain more than half of their programs on film. Independent television stations, not affiliated with a network, obtain more than three-quarters of their programs on film. "All television stations use feature films. About half of all hours devoted to film is allotted to feature films. As in the case of film, the use of feature films by television stations also varies depending on whether the stations are affiliated with or independent of a network. Most of the commercial tv stations in the U. S. are affiliated with networks. Since affiliated networks are supplied by networks with live programming, they depend to a somewhat lesser degree on feature films than do non-affiliated stations. "Until recent years, despite great demand for them, there were few feature films available to television. Beginning in or about January 1956, backlogs of the major motion picture producers were made available to television. Over 2,500 feature films have been released to television from these sources." The purported offenses have had the following effects, the government said: "(a) Television stations have been forced to purchase large numbers of feature films not desired by them; "(b) The playing time of television stations has been arbitrarily pre-empted, thus preventing them from securing film from other producers and distributors; "(c) Television stations which are financially unable to take feature films in the large quantities required by the defendant have been prevented from obtaining any of SILVER LINING LOOK for the silver lining. The Dept. of Justice's antitrust actions against distributors of feature films to television stations, on charges that tv broadcasters are forced to buy whole packages, has won plaudits from one organization wholly unconnected with the broadcasting industry. It is the Japanese-American Citizens League. According to Asst. Attorney General Victor R. Hansen, the league has praised the antitrust suits as a move which will free tv stations from being forced to show anti-Japanese propaganda. Seems the League has been unsuccessful in persuading tv stations not to broadcast feature films produced during World War II "which besmirch the loyalty of Americans of Japanese ancestry." This is because, Mr. Hansen quoted the league as saying, the stations have no economic choice but to buy, pay for and hence to exhibit a whole package of pre1948 films. the feature films of defendant; "(d) Television stations have exhibited many feature films that are inferior in quality which, except for the offense herein alleged, they would not have exhibited." Acting Atty. Gen. William P. Rogers, in commenting on last week's suits, said: "The present actions are related cases following up our recent action against Loew's and are intended to eliminate compulsory block-booking in the television industry. As we stated when the Loew's case was filed, the purpose of these civil complaints is to obtain an injunction preventing the forcing of feature motion pictures in blocks upon television stations, and to require the distributors to offer them to television stations on a picture-by-picture basis. Such relief would not prevent television stations from licensing a large number of pictures at one time for administrative convenience; the only requirement would be that the distributors must permit the station to select the picture making up the group and permit negotiations picture-by-picture." Asst. Atty. Gen. Hansen stated: "The compulsory block-booking of copyrighted feature motion pictures was declared to be illegal in the well-known Paramount case which involved many aspects of the motion picture industry. We believe that the rule of that case as to block-booking is equally applicable to television. If we are successful in eradicating block-booking, nonnetwork television stations (many of which are uhf stations) in particular should be benefited since they do not have network programs and rely heavily on feature films [to compete] with network stations." The suit a<?ainst Loew's Inc.. also filed in New York Federal District Court, charged that since it began to sell its backlog of more than 700 pre1948 MGM features to tv stations last year it had refused to sell less than the entire package. The complaint also noted that in three instances the film company had taken a 25% interest in tv stations as payment for the MGM package. This referred to Loew's interests in KTTV (TV) Los Angeles KMGM-TV Minneapolis-St. Paul, and KTVR (TV) Denver. In his speech to the FCBA Thursday Mr. Hansen made one observation which could be understood to mean that the suits against the film distributors arose from complaints about these practices — although he did not identify the complaints. Mr. Hansen said: "We in the Antitrust Division don't pick targets for our investigations. We gather facts to ascertain whether allegations that come to us are or are not correct. Then we apply the antitrust laws to the facts of the industry and act against any violations and violators that we find." He added: "Our chief concern and responsibility in the television industry is to assure that television broadcasters are economically unrestrained in their efforts to provide the viewing public with the best program fare available." After a brief discussion of the 1948 Supreme Court decision in the Paramount case — resulting in the banning of block-booking and divestiture of theatre ownership from production — Mr. Hansen continued: "There is little need for me to tell vou. Page 28 • April 22, 1957 Broadcasting Telecasting