Broadcasting Telecasting (Apr-Jun 1957)

NETWORKS ABC-TV FUTURE ROSY: GOLDENSON • AB-PT head sees firm's biggest potential in tv • He opposes pay tv in report to stockholders AB-PT President Leonard H. Goldenson guided the annual American BroadcastingParamount Theatres Inc. meeting in New York through its two-hour course last Tuesday and by the time the meeting adjourned about 1 p.m., he had: • Gone on record against toll tv. • Held up ABC-TV as the AB-PT division with the "biggest potential for expansion" over the next "four or five years." • Bypassed a turbulence caused by a statement read on behalf of Robert E. Kintner, former ABC president and now an NBC-TV executive vice president (see facing page). Mr. Goldenson received overall stockholder approval for AB-PT's modus operandi, marred only by sporadic sniping at "high" executive salaries, the settlement fee being paid Mr. Kintner, the "too many" directors on the board, stock options (voted some years ago), "liberal" disbursement of earnings through dividend payments and "throwing money around." No objections were raised to a change in the bylaws reducing the number of directors from 17 to 15 and an amendment permitting dividends on 5% preferred stock to be paid on the 15th of the month on a quarterly basis beginning next year. Both of these formal proposals received swift approval. Other highlights of the session: • Mr. Goldenson's disclosure that ABCTV advance sales for the forthcoming 195758 season already exceed the volume of last October [B»T, May 13] when the current broadcast season began, and that by late fall, the network would be in an "extremely competitive" position with a predicted lineup of 80 basic affiliations representing an 85% direct live coverage of tv homes. • A remark by Mr. Goldenson that the "tone" of radio networks seems to be "better" and a prediction that ABC Radio has "great potential that will reveal itself over several years." • An opinion expressed by Mr. Goldenson to newsmen after the meeting that he does not expect the theatre division of ABPT in the future to show a "growth factor" comparable to that of the ABC-TV division. • Revelation of ABC-TV's next strong competitive move will be made in daytime programming. Mr. Goldenson indicated that on June 1 the network will reveal some of its plans for morning and afternoon periods. (It was learned that ABC-TV is looking into prototypes of six live audience participation shows, one or more of which would be scheduled for daytime exposure working back from the start of Mickey Mouse Club which now is slotted Monday-Friday at 5-6 p.m. Titles of the shows: What's the Name of That Song?, Win Your Way, Parlay, Guest of Honor, Glamor Girl, Lucky Lady and What Makes You Tick? The shows, it was stated, most likely will originate live in the East and be repeated on videotape to the West). • ABC-TV's growth portends an expansion in studio space on the West Coast to accommodate an increased number of live shows which are originated there. Mr. Goldenson estimated that eight studios alone would be needed on the West Coast for a regular schedule of live programming in the morning and afternoon hours. Thus far, facilities in New York are adequate to take care of needs for anticipated originations there, but with a "rapid rate" of expansion over the next few years it will be necessary to expand facilities also in New York. Mr. Goldenson charged that toll tv proponents originally had based their search for commercial channels on an expectation that "a national television service could not be economically maintained except through payment by viewers, and if one were established, it was bound to be a rather colorless medium offering only second rate programs." But, he said, "time has proved them wrong in practically all their early claims." As tv grew, related Mr. Goldenson, the pay tv proponents shifted ground and now offer the toll tv as an aid to uhf station operators and the "small vhf station operator and the stations which have no network affiliations," as an avenue for "cultural" programs to a minority of viewers and for a "quality and diversity" of shows not now available to everyone. Mr. Goldenson outlined tv's presentation of plays, of feature movies, of outstanding sports events, etc., asking, "Just what then is left for toll tv to supply?" He warned that it was obvious that the home viewer not only will have to continue to pay the purchase price for his set, maintenance cost and possibly conversion of the set to receive pay tv signals, but also "it seems inevitable that home viewers will be charged for everything now on free television which is attractive enough that people will pay for it in the home." He said he thought this would result in the withdrawal of all the top sports events, all the top comedy, drama and variety shows (now on tv) and of "news and public service programs" which will "vanish without the support of earnings from these commercial shows." The upshot for the home viewer, Mr. Goldenson predicted, would be a substantial MR. GOLDENSON payment each month for home entertainment that would consist of a "minute percentage that he did not receive before and a preponderant percentage of that which he now receives free." In detailing AB-PT's business climate, Mr. Goldenson noted that ABC-TV time sales made last spring and summer for the 1956 fall programming schedule "were not satisfactory" and that because of this, the current broadcast season has had results "lower than the previous year." Since last October, he said, AB-PT has been trying to improve current results with additional sales while tackling the sales status of the upcoming fall season. Though sales volume already is ahead of the current season, a problem still exists in selling half segments that remain from programs only half sold thus far in order to "recoup program costs and earn the full profit from the time sales." Results of this year's selling will be felt in the fourth quarter of 1957 and in the first three quarters of next year, he reminded. Among new national advertisers on ABCTV's roster, Mr. Goldenson reported AT&T, Reynolds Metals Co., Buick Motor Div. of General Motors, Sylvania Electric Products, Liggett & Myers and Revlon. Key to the theatre problem, Mr. Goldenson observed, would be conditions of highly appealing pictures shown in fewer but better theatres. He stressed the need of more quality pictures and said AB-PT is progressing in its own motion picture production with the first of several moderately budgeted movies scheduled for release in June. In answer to a stockholder, Mr. Goldenson spiked an expressed fear that AB-PT may be "split again" because of movie producing, noting that in signing the original agreement, AB-PT had an understanding that its consent was conditioned on a minimum flow of pictures from producers. Once producers reduced the number of new movies so as to jeopardize motion picture theatre business, AB-PT was obliged to engage in production itself, he said. Goldenson's $181,000 Was Top AB-PT Salary LEONARD H. GOLDENSON, president of American Broadcasting-Paramount Theatres (of which ABC-TV is a division and ABC Radio Network a subsidiary), was the highest paid officer last year among directors and officers exceeding $33,000 in aggregate remuneration from AB-PT and subsidiaries. He received $181,000, including $25,000 in expenses as AB-PT president. Robert E. Kintner, who resigned as an AB-PT vice president and ABC president last October, received $125,000, including expenses. Mr. Kintner also has payable to him $230,000 for the years 1957 through 1960 in a contract settlement. These figures were made available last week at the annual meeting of AB-PT stockholders in New York (see separate stories). Other executives' income listed: John Balaban. president of Balaban & Page 54 • May 27, 1957 Broadcasting • Telecasting